We are pleased to launch Policy Briefs by the Purdue Agricultural Economics Department.  We aim to provide short insights, readable for the general public, on policy issues that are national in scope with an Indiana flair. 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. We hope to enrich policy debates by providing data and context, quantifying impacts, and offering alternatives.  
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Policy Briefs by date:

Authors: Farzad Taheripour, Steffen Mueller, Hoyoung Kwon, Madhu Khanna, Isaac Emery, Ken Copenhaver, and Michael Wang
Date: March 2022
Summary: Lark et al. (2022) recently published “Environmental Outcomes of the US Renewable Fuel Standard” and addressed domestic land use change (LUC) of corn ethanol and associated greenhouse gas (GHG) emissions that are potentially caused by the U.S. Renewable Fuel Standard (RFS). Lark et al. applied a few loosely connected empirical methods to examine the impact of the RFS on domestic LUC emissions. They concluded that the GHG emissions (commonly called carbon intensity) of ethanol are at least 24% higher than those of gasoline. After a detailed technical review of the modeling practices and data used by Lark et al., we conclude that the results and conclusions provided by the authors are based on several questionable assumptions and a simple modeling approach that has resulted in overestimation of the GHG emissions of corn ethanol.

Authors: Megan N. Hughes, Olivia Wyrick, Carson J. Reeling, and Meilin Ma
Issue Number: PAER-2022-10
Date: February 2, 2022
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.
Authors: Aaron J. Staples, Carson Reeling, Nicole Olynk-Widmar, and Jayson L. Lusk 
Issue Number: PAEPB-2020_15 
Date: September 24, 2020 
Summary: Brewing beer is an environmentally intensive process, and technology to reduce a brewer's footprint can be costly. However, we find 75% of beer drinkers are willing to pay a premium for sustainably brewed beer and incorporating eco-labels or environmental graphics onto beer labels could serve as a low-cost way for brewers to communicate a commitment to sustainability. 

Date: March 20, 2019
Abstract: Indiana school districts have proposed 188 property tax referenda since November 2008, and 118 have passed. Referenda have probably slowed the growth of property taxes for capital projects, but have increased taxes for operating costs. Wealthier urban and suburban districts are more likely than less wealthy rural districts to propose and pass referenda. The trend toward more frequent passage may be due to added experience by school districts.

Agricultural export impacts of USMCA vs NAFTA plus other tariff changes

Authors: Maksym Chepeliev, Wally Tyner and Dominique van der Mensbrugghe 
Issue Number: PAEPB-2019_13
Date: January 23, 2019
Abstract: This policy brief estimates the impacts on U.S. agricultural exports of 1) the new United States-Mexico-Canada Agreement (USMCA or the new-NAFTA) vs. the current NAFTA; 2) USMCA plus U.S. steel and aluminum tariffs on Mexico and Canada, and the retaliatory tariffs they implemented; 3) the USMCA plus all new U.S. tariffs globally and the retaliatory tariffs other nations imposed; and 4) what could happen if the USMCA is not approved and NAFTA is abandoned. The study finds that there are small gains in U.S. agricultural exports from the new USMCA, which are more than offset by losses in the second case. There are large losses for U.S. agriculture from the third and fourth cases.

Economic and Policy Analysis of Potential Deployment of Rural Broadband in Indiana

Authors: Alison Grant, Wally Tyner, and Larry DeBoer
Issue Number: PAEPB-2018_12
Date: November 29, 2018
Tags: Rural broadband, rural electrification, benefit-cost analysis
Abstract: This policy brief projects the statewide net benefits that could be obtained from installation of rural broadband in all of the areas served by Rural Electric Member Cooperatives (REMC) in the State of Indiana. It also explains why despite the large projected net benefits, some form of policy intervention likely will be needed to achieve widespread rural broadband deployment.

How U.S. Agriculture Will Fare Under the USMCA and Retaliatory Tariffs

Authors: Maksym Chepeliev, Wally Tyner and Dominique van der Mensbrugghe 
Date: October 31, 2018
Abstract: A hallmark of the Trump Administration has been to reverse the post-World War II consensus on lowering of trade barriers and a commitment towards multilateral free trade, towards a more protectionist and perhaps mercantilist position vis-à-vis trade policy. One of the Administration’s first actions in this regard was the decision to leave the Trans-Pacific Partnership (TPP) agreement, followed thereafter by raising tariffs on steel and aluminum imports. President Trump left no doubt where he stood on the North American Free Trade Agreement (NAFTA), which he often stated was the “worst trade deal maybe ever signed anywhere.” The administration’s actions on trade are likely to have significant implications for U.S. farmers as these actions target three of the largest markets for U.S. agricultural exports—Canada, China and Mexico—accounting for some 44% of U.S. agricultural exports representing an average of $63 billion from 2013 to 2015. 
Date: September 17, 2018
Project/Briefs Overview: The goal of this project was to leverage existing knowledge, models and data to understand and communicate the interplay between global change and local sustainability of US agriculture in the context of alternative national, state and local policies affecting agricultural productivity and environmental quality. In particular, the team examined the tradeoffs between: 1) crop production, prices and food consumption, 2) nitrogen losses, and 3) groundwater depletion. Special attention was paid to the role of current policies and institutions in governing these tradeoffs, as well as the impacts of prospective policies targeting land use, nitrogen applications and the allocation of groundwater.

      1. Global Drivers of Land and Water Sustainability Stresses at Mid-century
      2. Productivity Growth is Key to Achieving Long Run Agricultural Sustainability
      3. Evaluating Alternative Options for Managing Nitrogen Losses from Corn Production

Authors: Katare Bhagyashree, Dmytro Serebrennikov, H. Holly Wang, and Michael Wetzstein
Issue Number: PAEPB-2018_11
Date: September 5, 2018
Tags: External Costs, Food Insecurity, Food Waste, Social Welfare, Sustainability
Abstract: In 2010, U.S. households wasted 21% of the total food available for consumption. In response to this waste, a number of U.S. localities have considered policies (disposal taxes) directed toward reducing this waste. Currently there is no federal food-waste disposal tax.  Determining the preferred government policies toward food waste requires an understanding of the household response to policies.  This unravels the interrelation between social food insecurity and external environmental costs, which households do not generally consider when they waste food.  Such an unraveling will only yield zero food waste if there is certainly in future food consumption, no governmental costs associated with waste mitigation and households are very responsive toward reducing their food waste to zero in response to government policies. Otherwise, some positive level of food waste is socially preferred.

Author: Michael Wetzstein
Issue Number: PAEPB-2018_10
Date: June 20, 2018
Tags: Motivational Crowding, Optimal Subsidy, Prosocial Evaluation, Solar Photovoltaic
Abstract: In determining a government solar subsidy level, it is important to integrate the technical with the social science. Such a framework integrates the technical environment, health, employment, and electricity accessibility benefits with consumers’ prosocial behavior. Prosocial consumers may adopt solar power without any subsidy because it increases their reputation as environmentalists. A solar subsidy may reduce this prosocial behavior resulting in lower than expected adoption, called a rebound effect. Considering this effect reduces the optimal subsidy based on external costs. Estimates of the optimal solar subsidy is approximately $0.02 per kilowatt-hour when not considering prosocial behavior. This optimal subsidy is in line with many current state subsidies, which may represent the upper bound when not considering social science in policy analysis.

Author: Roman Keeney
Issue Number: PAEPB-2018_9
Date: May 22, 2018
Tags: Farm Bill, Farm Policy, Budget, House Agriculture Committee
Abstract: In this brief, we examine the rules that control federal spending legislation and the potential impacts on replacing the 2014 Farm Bill. Congress (via the House Agriculture Committee) has released a draft 2018 Farm Bill that provides some insight into the limits that budgetary rules place on changing the system of farm and food programs in the U.S.

Author: Michael Langemeier
Issue Number: PAEPB-2018_8
Date: May 17, 2018
Tags: Crop Insurance; Farm Safety Net
Abstract: This brief provides a brief discussion of crop insurance products available in 2018. Crop insurance products differ by whether they protect against low yields or low revenue, whether they pertain to farm or county yields, and by coverage level.

Author: Michael Langemeier
Issue Number: PAEPB-2018_7
Date: May 17, 2018
Tags: Crop Insurance; Farm Safety Net
Abstract: Crop insurance can be an effective tool to mitigate downside risk on crop farms. As with last year’s crops, in 2018 there are several crop insurance products to choose from in the Corn Belt. This brief provides an illustration of insurance guarantees and potential insurance payments for various yield and price scenarios.

Author: Otto C. Doering
Issue Number: PAEPB-2018_6
Date: May 1, 2018
Tags: Conservation Title, Farm Bill Draft, Conservation Budget
Abstract: On April 12th, the Republican majority of the House Agriculture Committee reported out a draft Agriculture and Nutrition Act of 2018. Title II, the Conservation Title, includes substantial changes to several existing programs. The Conservation Reserve Program acreage cap is lifted from 24 to 29 million acres and contract rents are reduced to 80% of county averages. Reduced rental rates may make this land retirement program less attractive to farmers, especially if commodity prices increase. Reduced rental rents may also keep high quality productive land from going into the reserve. For the working lands programs, the Conservation Security Program (CSP) is eliminated and some of its components put under the Environmental Quality Incentive Program (EQIP). Whole farm comprehensive program options that were available in the CSP are reduced without commensurate increases in the practice specific EQIP programs. The combined program budget is cut by 20%.

Author: H. Holly Wang
Issue Number: PAEPB-2018_5
Date: April 17, 2018
Tags: Export to China, Pork, Soybeans
Abstract: Over the past two weeks, U.S. and Chinese governments announced a series of tariffs against each other’s export.  These tariff threats, if materialized, may cause multi-billion dollars of export loss for the U.S. farmers because pork and soybeans, the two largely exported agricultural commodities are included on the list of products being heavily tariffed.  

Author: Larry DeBoer and John Sanders
Issue Number: PAEPB-2018_4
Date: April 17, 2018
Tags: tariffs, trade deficit, budget deficit, exchange rates, interest rates, china, soybeans, steel
Abstract: The U.S. is considering tariffs on imports of steel and aluminum.  This brief analyzes the effects of tariffs on our production of goods and services, and on employment, inflation, interest rates and exchange rates.

Author: Jayson L. Lusk
Issue Number: PAEPB-2018_3
Date: March 27, 2018
Tags: Farm Bill, Food Stamps, Nutrition, School Lunch, SNAP, WIC
Abstract: This brief describes federal food assistance programs administered through the U.S. Department of Agriculture.  These programs represent the over 70% of the USDA budget and affect millions of U.S. citizens.

Author: Roman Keeney 
Issue Number: PAEPB-2018_2
Date: March 8, 2018
Tags: Farm Bill; Nutrition; Commodity Support; Federal Budget
Abstract: This brief uses the occasion of President Trump’s fiscal 2019 budget to review the role of presidential administrations in Farm Bill deliberations. We look at specific proposals offered in the new budget document and identify how those might be interpreted in comparison to previous published budget documents.

Author: Roman Keeney 
Issue Number: PAEPB-2018_1
Date: March 8, 2018
Tags: Farm Bill; Nutrition; Commodity Support; Federal Budget
Abstract: This brief is intended to provide an overview of the Farm Bill process including the key issues of scope and timing. Growth in the federal deficit along with the broad scope and time sensitive nature of Farm Bill expiration make for an uncertain future for farm programs and other included measures.

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