Policy Briefs - Purdue University

Policy Briefs by the Purdue Agricultural Economics Department aims to provide short insights, readable for the general public, on policy issues that are national in scope with an Indiana flare. We were initially motivated by the need to provide timely analysis in the lead up to 2018 Farm Bill discussions. However, the breadth of expertise in our department and the ongoing policy discussions related to farm, food, environment, trade, and development issues warrants a longer view and broader scope. The department hopes to enrich policy debates by providing data and context, quantifying impacts, and offering alternatives.

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Has the IRA made conservation a target in the Farm Bill debate?

Publication Date: May 2023

Roman Keeney, Associate Professor of Agricultural Economics

Summary: Last year’s inflation reduction act (IRA) added some $20 billion in conservation funds to farm bill programs for climate smart agriculture. Efforts to claw back those climate funds could complicate an already difficult farm bill process.

What should we expect from the Farm Bill’s SNAP debate?

Publication Date: April 2023

Roman Keeney, Associate Professor of Agricultural Economics

Summary: Passage of a Farm Bill in 2023 will depend critically on finding compromises on nutrition spending.

How will the farm bill be shaped by the federal budget?

Publication Date: March 2023

Roman Keeney, Associate Professor of Agricultural Economics

Summary: CBO’s February outlook identified federal deficit projections well above fifty year norms. Mounting concerns about economic growth and the size of the deficit indicate that new farm legislation in 2023 will likely need to be reduced from its estimated $140 bn/year cost to gain broad legislative support.

How has the Thrifty Food Plan increased the cost of the farm bill?

Publication Date: March 2023

Roman Keeney, Associate Professor of Agricultural Economics

Summary: USDA’s changes to the Thrifty Food Plan (TFP) in 2021 have increased spending estimates by more than a quarter trillion dollars over ten years. The TFP and other factors used in calculating SNAP benefits will be prime targets for introducing cost reductions into the 2023 Farm Bill.

How is the budget for Farm Bill 2023 determined?

Publication Date: February 2023

Roman Keeney, Associate Professor of Agricultural Economics

Summary: In this policy brief, we examine nutrition and commodity program spending since 2018 and conclude that the success of general economic policies typically determine farm bill spending. While the CBOs baseline represents important information it should not be treated as an automatic signal that farm bill programs must be cut.

What are the basic priorities and big ideas in the 2023 Farm Bill debate?

Publication Date: February 2023

Roman Keeney, Associate Professor of Agricultural Economics

Summary: The projected cost for farm and nutrition programs over the next ten years makes the farm bill a significant target for federal spending cuts. Successfully passing a farm bill in 2023 depends critically on insulating the farm bill from broader partisan debate over the size of government

How effective is the 2018 Farm Bill’s PLC program in today’s price environment?

Publication Date: February 2023

Roman Keeney, Associate Professor of Agricultural Economics

Summary: A key consideration for 2023’s Farm Bill will focus on legislated effective prices in the PLC program. In this brief, we examine why the PLC effective price calculation offers limited adjustment to increasing prices and input costs.

What is the “language” of the farm bill?

Publication Date: January 2023

Roman Keeney, Associate Professor of Agricultural Economics

Summary: The 2023 Farm Bill process is sure to produce significant debate, analysis, and opinion. This primer covers some basic “language skills” for tracking farm bill discourse in 2023.

How does the farm bill get made?

Publication Date: January 2023

Roman Keeney, Associate Professor of Agricultural Economics

Summary: With current farm legislation expiring in September, we take this opportunity to review the process of writing a new Farm Bill for 2023 against the current timeline and political landscape.

Trade and Trade Policy Outlook 2023

Publication Date: January 2023

Russell Hillberry, Professor of Agricultural Economics

Summary: A look at the factors that could impact trade and trade policy in 2023.

What factors will shape a 2023 Farm Bill

Publication Date: January 2023

Roman Keeney, Associate Professor

Summary: At the end of September 2023, the most recent omnibus “Farm Bill” (passed in 2018) will expire. This deadline for reauthorization is one of a number of factors that promise an interesting 2023 for farm policy watchers.

Evaluating USDA’s Farm Debt Forecast

Publication Date: April 2022

Pedro Antonio Diaz Cachay, Masters Student; Dr. Todd Kuethe, Associate Professor and Schrader Endowed Chair in Farmland Economics

Summary: We find that ERS forecasts for farm debt are unbiased, as the forecasts do not systematically differ from realized values. However, ERS forecasts are inefficient, as they over-react to new information.

Informativeness of USDA’s agricultural export projections

Publication Date: April 2022

Hari P. Regmi, Ph.D. Student; and Todd H. Kuethe, Associate Professor and Schrader Endowed Chair in Farmland Economics

Summary: USDA baseline export projections exhibits downward bias. Projections of total exports and high value commodities are informative up to year four while bulk commodities export projections are informative up to year three.

Do Government Farm Support Programs affect the Adoption of Farm Technology and Sustainable Production Practices?

Publication Date: April 2022

Haden Comstock, M.S. Student; Nathan DeLay, Assistant Professor

Summary: This paper finds that there may be a positive correlation between participation in the Federal Crop Insurance Program (FCIP) and time to adoption of certain Precision Agriculture Technologies (PATs).

Key Takeaways from “Commitment Behaviour in the World Trade Organization’s Trade Facilitation Agreement” by Hillberry and Zurita (2022)

Publication Date: April 2022

Carlos Zurita, Doctoral Candidate

Summary: The Trade Facilitation Agreement (TFA) is a novel á-la-carte agreement negotiated among members of the World Trade Organization. The TFA allows country member governments to choose only those provisions that they feel capable to be held responsible for. Hillberry and Zurita (2022) study the TFA’s cross-country commitment behavior and provide three main takeaways. Some TFA measures are perceived to be more difficult to implement than others. Countries with higher income levels are prepared to implement more measures. The content of commitments made is mostly explained by the number of commitments made. Although aid for trade facilitation helps, it may take decades for developing countries to fully implement the TFA.

Understanding the Growing Climate Solutions Act

Publication Date: February 2022

Megan N. Hughes, Ph.D. Student Agricultural Economics; Olivia Wyrick, Student Natural Resources and Environmental Sciences; Carson J. Reeling, Associate Professor; and Meilin Ma, Assistant Professor

Summary: A lack of regulation has led to variance in the quality of carbon offsets generated in carbon markets. Improved verification standards may help to improve the long-term sustainability of these programs.

General Economic Outlook – COVID calls the shots again

Publication Date: January 2022

Larry DeBoer, Agricultural Economics Professor Emeritus

Summary: Uncertainty over the course of the pandemic and the response by workers and businesses to inflationary pressures are expected to be the determining factors in what is likely to be slower GDP growth in 2022.

Trade and trade policy outlook, 2022

Publication Date: January 2022

Author: Russell Hillberry, Professor of Agricultural Economics

Summary: While trade policy does not appear to be a major priority of the Biden Administration, it does affect many key objectives. One example is the supply chain problem, which may not be fully resolved in 2022.

How might the past four years of economic shocks inform the next Farm Bill agenda?

Publication Date: January 2022

Author: Roman Keeney, Associate Professor of Agricultural Economics

Summary: Payments to farmers have spiked the past four years from trade war and COVID assistance. Should the next Farm Bill expand its criteria for emergency assistance to wider economy shocks?

U.S. Climate Policy Revisited: Macroeconomic and Distributional Impacts of the Paris Agreement

Publication Date: March 2021

Authors: Maksym Chepeliev, Research Economist; and Dominique van der Mensbrugghe, Director and Research Professor

Summary: With the U.S. re-entering the Paris Agreement on Climate, Purdue researchers consider the economic consequences for the US economy. Their findings show economic costs can be moderated (and inequality reduced) under a cooperative approach to meeting carbon reduction targets.