As America nears the year 2000, two major issues warrant attention. Will the availability of natural resources seriously constrain U.S. agriculture? And how will agriculture affect the quality of the environment? Neither is novel, but each poses critical choices.
Availability of natural resources
In speculating on the future abundance of natural resources, we must consider the demand for them in both agricultural and nonagricultural uses, their future supply, and what new technologies could complement or substitute for them in agricultural production.
Increased demand for agricultural products
Consensus is strong—even among economists—that the prospective expansion in domestic demand for food well into the twenty-first century poses no major threat to the U.S. resource base. Increases in U.S. population and economic growth suggest that growth in aggregate demand for food will amount to slightly less than 1 percent annually by the year 2000. Of course, a heavily subsidized program to produce alcohol fuel (ethanol) could add to domestic agricultural demand for resources. However, barring precipitous increases in petroleum prices, and assuming that current U.S. energy policy will continue relatively unchanged, it is reasonable to predict only marginal growth—at least to the turn of the century—in U.S. commercial demand for agricultural commodities.
But if consensus exists regarding domestic demand, the same cannot be said for exports. Based on the relatively high export levels of the 1970s, some project that annual growth rates up to 2000 would range between 2.3 and 6.5 percent. Others argue that the high growth rates achieved in the 1970s cannot be sustained for another sixteen years, in part because the price increases attending such growth in all likelihood would dampen foreign demand and encourage production outside the United States. Moreover, some of the events of the seventies that triggered rapid expansion of U.S. exports were cyclical or transitory, not long-term, shifts in export demand. And there is cautious, but growing, optimism that the developing countries—where much of the potential growth in food demand resides—will continue to enhance their own productive capacity through appropriate mixes of capital investments, research and development, and farsighted public policies.
Resource demand for nonagricultural uses
Over the past decades, U.S. agriculture has become increasingly interdependent—economically, socially, and politically—both domestically and internationally. This trend probably will grow in the twenty-first century, and with it will come increased competition for natural resources. On the margin, the value of water and, generally, the value of land in nonagricultural uses, will continue to exceed their value in agriculture. Thus, where markets operate freely and efficiently, agriculture will compete just as weakly for those resources in the next century as it does now. But by that time, the agricultural sector will find it increasingly difficult to obtain or even to maintain "special-interest" policies for water, other resources, or, for that matter, agricultural commodities themselves.
Transfers of resources from agriculture clearly will continue in the next two decades and beyond. Indeed, water transfers could be much larger than those of the sixties and seventies because of the expanding market for groundwater rights and institutional interbasin transfers. However, the rate of converting agricultural land to nonagricultural purposes may decline as a result of several factors: national population growth rates are slowing; the dramatic migration from metropolitan to nonmetro areas seen in the seventies will diminish; and the rate of household formation probably will decline in the late 1980s.
Construction rates for new airports, water and highway transport systems, dams and reservoirs—all significant claimants on cropland in the past—already have slowed, and rescission or deferral of plans for continuation of several major synfuels plants have lowered projections for conversion of coal- and shale-endowed agricultural and in the next decade or two.
Thus, competition and demand for resources will continue to increase into the twenty-first century even if the "demand-pull" thesis, which suggested the more extreme food- and resource-scarcity scenarios of the 1970s, now seems overstated. Still, perhaps as much as 20 to 25 million acres of agricultural land (8 to 10 million acres in cropland) will be converted to nonagricultural uses by 2000. Considering demand and the infrastructure needed to accommodate domestic and export demand for agricultural commodities, a plausible guess is that total additional demand for cropland from the current cropland reserves (about 127 million acres) might reach 35 to 50 million acres in the next century.
Does this mean that real cost for both food and resources will continue to rise in the twenty-first century? It is tempting to say yes. After all, land and water are finite. But resource fixity is meaningful only in a physical context. Resources are determined by human choice and influenced greatly by socioeconomic criteria. As a given resource becomes more scarce and consequently more socially valuable, users conserve it by substituting other resources and by adopting resource-saving technologies and management practices. This principle of substitution has been dramatically evident in the performance of U.S. agriculture during the past century.
Water—How much? How expensive?
The availability and price of water, not land, appear to be the more critical variables for agriculture through the remainder of the century, particularly in the West. In the absence of subsidized, large inter-basin water transfers it seems clear that water will be increasingly costly in the southern Great Plains, and this could force conversion of substantial amounts of land from irrigated to dryland farming systems. Transferring water from agriculture to meet demands in growing urban centers in the West and Southwest almost surely will induce major adjustments in agriculture in those areas. Native American and federal claims to the waters of the Colorado River and other sources in the West raise potentially unsettling issues for agriculture. And it seems evident that in the next few decades the federal government will be unwilling to invest in large-scale water-development projects. Today, western water policy emphasizes efficient management of this increasingly valuable resource rather than developing additional supplies.
What seems likely to ensue over the next several decades is a series of marginal agricultural adjustments to higher-priced water—more efficient water application, reduced rates of application, shifts from lower- to higher-valued crops, and shifts in resource use and production patterns throughout the country. Such adjustments have the potential to conserve substantial amounts of water; for example, estimates are that current water application efficiencies of about 50 percent could be boosted to 85 percent by changing application techniques—a 70 percent gain. In the context of the West as a whole, the physical requirements for water to meet projected urban and other nonagricultural uses up to 2000 are small relative to the total quantities now being used in agriculture. Nevertheless, the water issue will generate many difficult, controversial choices in the decades ahead. The task is to develop more effective institutions for reducing the distortions caused by policies that assume an abundant, low-priced natural resource.
Adjusting to higher energy prices
Agricultural adjustments to the higher energy prices of the 1970s have been substantial—conservation in use of energy-based products through such technologies as minimum till, integrated pest management, and others. RFF's Pierre Crosson predicts that by 2010 as much as 50 to 60 percent of the nation's cropland might be farmed by means of conservation tillage. Although agriculture is vulnerable to any major interruption of energy supplies, moderate, gradual increases in energy prices apparently can be accommodated without major impacts on the nation's food supply by 2000.
When the so-called cropland crisis of the 1970s is viewed in light of the principle of resource substitution it presents a less foreboding prospect than the popular press reported at the time. Although the annual net conversion to nonagricultural uses of 875,000 acres of cropland during 1967-75 has been highly dramatized (and possibly overstated), it constituted only slightly more than one-tenth of 1 percent of the 540-million-acre cropland base. Even if conversions were to continue at that rate—which seems highly unlikely—the cumulative losses by 2000 would be only 3 to 4 percent of the 540 million acres. Nevertheless, cropland is a valuable national asset, and its future use deserves careful attention.
But all land is not created equal! Soil characteristics differ and, when combined with climate and management variables, offer unique opportunities for the production of high-value crops. Thus, the fact that the cropland base probably will not physically or economically limit the expansion of U.S. aggregate food production does not suggest that actions to conserve and maintain its quality or to regulate its rational, economic use at the local level are either irrelevant or unnecessary. Indeed, the issues and choices of land use planning to serve multiple demands are likely to have great local importance as this century gives way to the next.
Resource-saving technologies
Scientists suggest that yields for major crops probably could be increased 40 to 50 percent by 2000, by using either current technologies or those available "on the shelf." Impressive gains in livestock productivity also are possible within the next ten to twenty years. And many suggest that additional investment in basic research could produce major breakthroughs to enhance both crop and live-stock yields, perhaps even before 2000.
The effect of agriculture on environmental quality
Agriculture's relationship to the quality of the natural environment poses another set of controversial issues and crucial choices.
Some critics argue that the current "high-tech" agricultural production system is a major source of environmental degradation in the United States. In this view, the system simply is not sustainable in the long run because it impairs the quality of the natural resources on which it depends. But the system's defenders emphasize that current technology and improved management regimes (and others can be developed) can ameliorate, if not eliminate, the worst of the environmental abuses attributed to such a high-tech agriculture. Contending that no practical alternative is possible unless Americans are prepared to pay much higher prices for food, they point out that life consists of a series of tradeoffs between the optimum and the attainable.
Uncertainty prevails
Resolving these issues is complicated by the lack of scientific evidence on the basic relationships involved in the controversy. For example, no one knows with much precision what happens to pesticides when they leave the farmer's field. Also, it is difficult to value the social cost of the environmental externalities—soil erosion, sedimentation, and salinity—deriving from agricultural production. Indeed, existing institutional mechanisms are incapable of internalizing the social costs of environmental degradation.
Pierre Crosson and Sterling Brubaker have speculated on the resource and environmental effects of U.S. agriculture to 2010. Among the troublesome environmental problems associated with agricultural production—pesticide, insecticide, and herbicide pollution, soil erosion, eutrophication, salinity of soils and water—they conclude that soil erosion is the most important, both through its effects on water quality and because of potential productivity losses on cropland.
Air pollution, which is generated mostly by nonagricultural sources, is of growing concern not only because of its immediate effects on agricultural production in highly urbanized areas, but also because of its potential longer-run effects on global climate and life-support systems. Acid deposition and increasing temperatures because of the greenhouse effect are two prime examples. Reliable assessments of the impacts of such phenomena depend on more scientific research but, looking far into the next century, such issues readily could provoke sharp social concern and require difficult public choices in the United States and around the world.
The questions surrounding agriculture and the quality of the natural environment are neither transitory or ephemeral, nor are their solutions simple or absolute. Perhaps the only certainty is that it is impossible to reduce the environmental risks of high-tech agriculture to zero: tradeoffs between food production and the quality of the environment are inevitable. And just as clearly, the choices by the twenty-first century will be even more complex, difficult, and far-reaching.
Predicting the future
My scenario of U.S. agriculture in the year 2000 is based on a cautiously optimistic view of the sector's capacity to adjust to what is clearly an uncertain and potentially highly unstable economic and political environment—one in which any forecast is subject to a wide range of error. It may be that the best strategy is to hope for the best and to be prepared for something less.
Nothing I see suggests an approaching crisis in U.S. agriculture or in the availability of natural resources for future agriculture development. But no crisis does not imply no cause for concern. To the contrary: the concerns are many and the individual and collective choices involved are critical. One such is the development of institutions to encourage more efficient use and the socially desirable allocation of water. Others concern policies and institutions to guide rational, more orderly, and farsighted use of land, based on long-term needs to serve multiple uses and to protect the quality of an evermore valuable resource. Some of the most difficult and critical choices will turn not on the quantity of natural resources per se, but on their quality and their relationship to agriculture. Common property resources—those such as clean air and water that lie outside the operation of commercial markets—increasingly will be central topics of concern in this regard. The nation is ill-prepared to address scientifically or quantitatively the tradeoff between environmental quality and food and fiber production.
And choices also must be made about public and private investments in research to maintain or broaden options in the use and conservation of natural resources and the environment. In the past, society made substantial investments in agricultural research based on the premise that they were a form of social insurance against long-term food and resource shortages and on the merits of rising productivity. This was so even when current technology was contributing to an economic surplus. Will we choose to do so again? If so, what strategies will be most appropriate?
For all our scientific advances, expanding knowledge of nature and the environment, and larger, more sophisticated models of technological, economic, and social systems, the future remains uncertain and enigmatic.
Author Kenneth R. Farrell is director of RFFs Food and Agricultural Policy Program. This article is based on a speech he presented at the April 1983 symposium on Agriculture in the Twenty-First Century) sponsored by the Colgate Darden Graduate School of Business Administration, University of Virginia, funded by Philip Morris, Incorporated. A proceedings volume, Agriculture in the Twenty-First Century, edited by John W. Rosenblum, ,was published by John Wiley & Sons, Inc. in 1983.
A version of this article appeared in print in the January 1984 issue of Resources magazine.
