Agricultural economics in context

We talked about agriculture and economics in Module one and you did some work already to explain how the two fit together.  We will add another perspective that I think goes a long way to explain how economics is relevant for all students in the College of Agriculture and Bioresources.

There are many different ways to approach academic inquiry and they rely on different ways of thinking and use different “tools” to solve problems that arise.  In this college, we use all of them to address problems and opportunities. The methods can be divided into three groups: disciplines, problem areas, and applied science.

Economics fits under the first heading.  Disciplines are specific branches of knowledge that typically have unique laws, rules and norms regarding inquiry.  For example, physics is a discipline with Newton’s law, the second law of thermodynamics, and of course gravity.  These laws are defined by precise mathematical functions that can largely not be disputed.  Similarly, mathematics is a discipline with laws that you have likely used and remembered from your math courses: distributed, commutative and associative laws regarding the swapping, ordering, and interpretation of numbers and equations.  In pretty much all cases, disciplines are rigorous and formal.  Many fall into the sciences.

Economics fits into this category with the law of demand and supply and the notion of diminishing returns.  They are facts that cannot be disputed and enable us to make educated predictions about events.  In your other classes, you will undoubtedly study other disciplines such as chemistry, physics, mathematics, etc.  And you can use each one to help shed light on different aspects of agriculture.

So where does agriculture fit?  We would say it is a problem area. That means you need many different tools to solve problems and answer questions.  If you study agricultural soils, you will certainly need soil chemistry.  If you want to study agriculture markets, then of course economics will help.  What about if you are in animal and plant science?  You might rely more on biology and ecology.  The interesting thing about problem areas is that unique problems and opportunities arise that require a mix of approaches to best develop solutions.

Here’s a specific example:  you are a soil chemist and I’m an economist. The problem is to increase yield.  You discover that the nutrient content in the soil is too low and develop a strategy to boost yield.  I, as an economist, can then estimate the costs of your solution and the outcome in terms of added growth that can provide the farmer more money for higher yields.  We might also want to consult a hydrologist to determine if the crop is getting the optimal amount of moisture.  Problem areas are fun to work in because you get opportunities to work with people in other disciplines to develop innovative outcomes.  Other areas of study that fall in the problem area include business and certainly ag-business, policy, medicine, forestry, etc.

What if I am operating a dairy facility?  Who might be able to help me with problems designing milking mechanisms and comfy stalls with waterbeds for my dairy cows?  Well, a mathematician and physicist might help, but I might also consult an engineer or a computer scientist.   Agricultural engineers work in the area of applied sciences and use many different disciplines such as math and physics to develop real solutions to real problems rather than just theoretical problems (not that they aren’t important too).

So what does all this mean?  It means that for this class we will be using economic thinking as applied to agriculture.  The great thing about economics as a discipline is that you can take the laws and theories and apply them to just about anything.  If you are interested in dairy, then you could evaluate the dairy industry using economics.  Ditto if you were interested in beef cattle, regulations of GMOs, research and development, horticulture, forestry, nutrition, etc.  The list is endless!

Take a moment to think of all the areas of agriculture and how disciplines and applied sciences fit together to create solutions. Post one example on the whiteboard.

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