Santa Clara University - Leavey School of Business and Administration

Institute of Agribusiness

SPRING 1997 AGRI/ECON 101 GREGORY A. BAKER

COURSE SYLLABUS

Class Meetings: Monday, Wednesday, and Friday, 10:30 a.m. to 11:35 a.m. in Kenna 306.

Office Hours: Monsday and Wednesday from 3:00 p.m. to 4:00 p.m., or by appointment. You may reach me at - voice: 408-554-5172, fax: 408-554-5167, or e-mail: gbaker@mailer.scu.edu.

Course Description: The primary objective of this course is to study the food system and the relationship among food production, resource use and the environment. To provide a basis for study we will trace the development of agricultural systems to modern times. We will then focus on the social, political and economic structures which characterize the modern food and fiber system. We will also examine the biological and economic impact of technology on the environment and the long-run sustainability of the current system.

Readings: Most of readings are on reserve in the library. Supplemental readings will be handed out in class.

Homework Assignments: There will be three homework assignments. Two assignments are case studies which will be passed out prior to the class in which they will be discussed. You are required to turn in a written analysis for each case. The guidelines for analyzing and writing up the cases are included in a separate handout. You will also be given specific questions to answer for each case. The remaining homework assignment will focus on agricultural policy.

Issue Analysis: Issue Analysis Students will be assigned to one of four groups. Each group will be responsible for analyzing one perspective of a current issue important to the food industry and/or the environment. The results of the analysis will be submitted in a written report and presented to the class, jointly with a group representing an opposing viewpoint. Additional details concerning this project are included in a separate handout.

Term Project: Each student or group of students will conduct and in-depth analysis of an environmental issue related to the food system, resources, agricultural development or the environmental assessment at Santa Clara University. Each student or group is expected to present a written report as well as make an oral presentation to the class. The term project is described in detail in a separate handout.

Examinations: The midterm and final examinations will include material covered in the lectures and required readings, and build on the material included in the homework assignments, case discussions, and research projects. The final will be comprehensive.

Grading: Homework Assignments  30%

Issue Analysis 15%

Term Project  15%

Midterm Examination  20%

Final Examination  20%

Class participation   "5%

100%

My general approach to grading is holistic; that is I evaluate the entire work rather than grading the various components separately. For group projects, the implication of this, in plain English, is that every student is responsible for the entire report and not just the section or sections that he or she is on which he is working. For individual projects this means that your recommendations or findings must be sound and supported by your research and analysis. Lastly, it is important to communicate your work clearly, concisely, and in a well-organized fashion. This holds true for both the written and oral presentations. Where both a written report and oral presentation are required, they will comprise 90% and 10% of your project grade, respectively.

Santa Clara University - Leavey School of Business

Institute of Agribusiness

SPRING 1997 AGRI/ECON 101 GREGORY A. BAKER

COURSE OUTLINE

DATE TOPIC READING/ASSIGNMENT

4/2 Introduction/Course Overview

4/4 U.S. Food System and

Environmental Forecasting

4/7 Food Safety and the Regulatory Investigating Food Safety Readings

Environment (on reserve)

4/9 Food Safety and the Regulatory Term Project Outline Due

Environment

4/11 Food Safety, Consumerism and Pesticide Residues in Food; Too Much

the Public Interest Fuss About Pesticides (on reserve)

4/14 Food Safety Case Study: Case: The Alar Controversy

Written Case Analysis Due

4/16 Ethics, Agriculture and Business

4/18 Compensatory Time for Evening

Guest Lecture

4/21 Ethics, Agriculture and Business Case: Iroquois Brands

4/23 Agricultural Policy: The Farm The Farm Problem (on reserve)

Problem and Domestic Agricultural

Policy

4/25 Domestic Agricultural Policy Domestic Farm Policy (on reserve)

4/28 Domestic Agricultural Policy

4/30 International Agricultural Policy

5/2 Agricultural Policy: Marketing Marketing Agreements and Orders

Orders and Cooperatives (on reserve)

Agricultural Policy Homework Due

5/5 Guest Lecturer, Biotechnology:

Mr. John Callahan, Agriquest

5/7 Agricultural Policy: The Proper

Role of Government

5/9 Midterm Examination

5/12 Agriculture and Environmental Problems in U.S. Agriculture (on reserve)

Degradation

5/14 Issue Analysis Presentation and Report Due: Groups I and II

5/16 Issue Analysis Presentation and Report Due: Groups III and IV

5/19 Alternative Agriculture

5/21 Agriculture and the Environment Case: Methyl Bromide

Case Written Case Analysis Due

5/23 Guest Lecturer, Biotechnology:

Mr. Mike Harwood, Gargiulo, Inc.

5/26 Memorial Day Holiday

5/28 Barriers to Agricultural Difficulties in Agricultural Development

Development (on reserve)

5/30 Models of Agricultural The Why, What, and How of Agricultural

Development Development (on reserve)

6/2 Synthesis and Review

6/4 Term Projects Term Project Presentations

6/6 Term Projects Term Project Presentations

Written Term Papers Due

Santa Clara University - Leavey School of Business

Institute of Agribusiness

SPRING 1997 AGRI/ECON 101 GREGORY A. BAKER

ISSUE ANALYSES GUIDELINES

Below, I have described some interesting topics which are the subject of current debate. The class will choose the two topics which are of the greatest interest. Two groups will then be assigned to each topic and will choose opposing positions. Each group should prepare a written report and an oral presentation, in which the group will debate the group representing the opposing position for their respective topic.

The written report should briefly describe the problem, present your analysis, and summarize the group's findings. Information sources should be documented. The report is limited to 15 pages, inclusive of bibliography, appendices, etc. The report is due the day of your presentation. For both the presentation and the report, the group will be graded based on the analysis it performs and the persuasiveness of it arguments. Individual group members will also be graded on their presentation.

The following guidelines will govern the issue analysis presentations:

- Each group will initially be given 20 minutes to present the findings of its analysis, and argue its position.

- Each group will then be given 5 minutes to respond to the other group's presentation;

- This will be followed by questions from members of the class not involved in the presentations.

Endangered Species Act

In recent years the protection of endangered species has been the topic of much debate. Environmentalists contend that when species are endangered, the primary concern should be the protection of the species. In the case of the northern spotted owl, protection means safeguarding the owls= habitat, which is primarily old growth forest. The timber industry has argued that environmental concerns should be secondary to economic concerns, such as employment in the logging industry.

Delaney Clause

Congress recently approved legislation overhauling the country=s laws pertaining to the use of pesticides and food additives. However, this has not ended the debate over what level of carcinogens in the food supply should be considered "safe." Many consumer and environmental groups supported a zero risk standard, formerly embodied in the Delaney Clause of the FD&C Act, which would have prohibited the use of any chemical suspected of being a carcinogen as either a pesticide or food additive. For the most part the food industry supported the version of the bill which passed, which allows the use of a chemical at levels which will cause no more than one additional cancer per million people from all uses of a chemical.

Irradiation

The FDA has approved the use of irradiation to eliminate many of the micro-organisms which cause harm to humans and speed up the deterioration of foods. The major benefits of irradiation are the control of harmful pathogens which can cause illness and death in humans, as well as providing a longer shelf life for many fruits and vegetables. Critics question the safety of using radiation to treat products intended for human consumption.

BST

Bovine somatotropin (bST) is a natural protein produced in the pituitary gland of all cattle. It is a bovine growth hormone, which can now be produced very cheaply using recombinant DNA technology (biotechnology). When administered to lactating dairy cows bST stimulates increased milk production. Feed consumption also increases, but at a rate less than the increase in milk production. Therefore, less feed is used per pound of milk and production costs fall. No difference has been detected in milk quality as a result of this new technology, although some studies have shown a small detrimental impact on the cows which are given bST. Although the FDA has approved the use of bST, its use has been criticized by many groups.

Santa Clara University - Leavey School of Business

Institute of Agribusiness

SPRING 1997 AGRI/ECON 101 GREGORY A. BAKER

AGRICULTURAL POLICY HOMEWORK

This homework assignment is due on Friday, May 2, 1997.

1. For the US non-recourse loan program:

a) Explain or graphically show the impact of the program on the US market.

b) Describe the impact of the program on the following groups.

- US producers (quantity and price)

- US consumers (quantity and price)

- government expenditures

- competitiveness of US exports

c) Are producers in the rest of the world for or against the program? Why?

2. For the US target price program:

a) Explain or graphically show the impact of the program on the US market.

b) Describe the impact of the program on the following groups.

- US producers (quantity and price)

- US consumers (quantity and price)

- government expenditures

- competitiveness of US exports

c) Are producers in the rest of the world for or against the program? Why?

d) Why is the target price program called "market oriented?" Evaluate whether the program is "market oriented."

3. For the US export subsidy program:

a) Explain or graphically show the impact of the program on the US market and foreign markets.

b) Describe the impact of the program on the following groups.

- US producers (quantity and price)

- US consumers (quantity and price)

- foreign producers (quantity and price)

- foreign consumers (quantity and price)

- government expenditures

- competitiveness of US exports

c) Are producers in the rest of the world for or against the program? Why?

Santa Clara University - Leavey School of Business

Institute of Agribusiness

SPRING 1997 AGRI/ECON 101 GREGORY A. BAKER

TERM PROJECT

Procedure

1) You may do either an individual or group project. Group size is not limited, however, each group and topic must be approved by me.

2) Select either an environmental issue related to the food industry, agricultural development, or resource use for which you will conduct your analysis. You may also choose as a project a topic identified for the Santa Clara University environmental assessment. See me for a copy of possible projects.

3) A proposal, including the topic, your primary data sources and a detailed outline is due April 9, 1997.

4) There is no page minimum or maximum for the written report. However, as a general guideline an individual report should be about 10 pages long, double-spaced; a report for a group of two should be about 15 pages, double-spaced. In general the work reflected in the report should be commensurate with the number of people in the group.

5) Presentations are scheduled for June 4 and 6, 1997.

6) The final written report is due June 6,1997

Because there are several possible topics, there is no standard content or format which is required. For this reason, the project proposal is extremely important to ensure that you have selected a viable, researchable topic, consistent with the number of people working on the project.

The report will be graded based on its comprehensiveness, the thoroughness of the analysis, and the effectiveness with which the analysis is communicated.

Individuals (and individual group members) will be graded on their presentations based on their ability to convey the relevant aspects of the project analysis and the effectiveness in communicating the results of its study.

Santa Clara University - Leavey School of Business

SPRING 1997 AGRI/ECON 101 GREGORY A. BAKER

CASE STUDY GUIDELINES

1) A set of focus questions will be passed out for each case. You should use these questions as a guide in preparing your written case analysis.

2) In preparing the case study, you should use only the information presented in the case, although the use of "common knowledge" is acceptable in supporting your arguments. (For example, it is common knowledge that consumers are increasingly demanding more convenience in the foods they purchase). Do not use information that would not have been available at the time the case was written.

3) Each write-up is limited to three, typed, double-spaced pages (approximately 27 lines per pate and 12 characters per inch).

4) The written analysis is due at the start of class, on the day the case is scheduled to be discussed.

Santa Clara University - Leavey School of Business

Institute of Agribusiness

SPRING 1997 AGRI/ECON 101 GREGORY A. BAKER

ISSUE ANALYSIS: AGRICULTURAL WATER RIGHTS

In recent years environmental groups have challenged the right of California farmers to use water at the expense of the environment. They assert that the large diversion of water for agricultural purposes, particularly during the recent drought years, has left very little water in areas such as the Delta and that some species are threatened. Environmentalists argue that a minimum amount of water should be set aside for the environment. Agriculturalists call this the "fish first" argument and contend that economic concerns, such as employment, should come first.

Group Assignments

GROUP V

Your report and presentation should support the argument for strict regulations protecting environmental water rights.

GROUP VI

Your report and presentation should support the position that agriculture should have first priority over water rights.

Santa Clara University - Leavey School of Business

Institute of Agribusiness

SPRING 1997 AGRI/ECON 101 GREGORY A. BAKER

ISSUE ANALYSIS: PESTICIDE REGULATIONS

Recently the 9th District U.S. Court of Appeals ruled that the Delaney Clause, which had previously only been applied to food additives used in processed foods, also applies to pesticides residues in processed foods. This will likely lead to the elimination of many pesticides which are suspected of being carcinogens. Many groups are requesting that Congress overhaul the food safety laws and establish a uniform standard for carcinogens in both raw and processed foods. The two major proposals for such a law are the zero risk standard, currently embodied in the Delaney Clause of the FD&C Act and the negligible risk or de minimis standard of the FIFRA. The zero risk standard would prohibit the use of any chemical suspected of being a carcinogen. The de minimis standard would allow the establishment of a tolerance for suspected carcinogens such that the chemical would cause no more than one additional cancer per one million people.

Group Assignments

GROUP I

Your report and presentation should support the argument for adopting the de minimis standard (one in one million) for carcinogens applied to raw and processed products.

GROUP II

Your report and presentation should support the position that all carcinogens should be banned from raw and processed products.

1 Introduction

2 Environmental Scanning

3 Industry Analysis/Info Sources/Group Project --- ES Supermarket homework

4 Food Safety Regulations

5 Food Safety/Consumerism/Communications

6 Graphical Techniques for Policy Analysis

7 US Ag Policy - Farm Problem, Farm Bill, MOs, Coops

8 Presentation Big Green Debate

9 Ag Policy - The Impact on Int'l Trade

10 Presentation MO Debate

11 Int'l Trade Policy --- Policy homework

12 Midterm

13 Societal Attitudes and Values

14 Guest Speaker - Jennifer Curtis - Alternative Agriculture

15 Presentation - Mexican/American FTA Debate

16 Societal Attitudes and Values

17 Presentation - Truth in Advertising Debate

18 Guest Speaker - Environment

19 Group Project Presentations

20 Group Project Presentations

Santa Clara University - Leavey School of Business

Institute of Agribusiness

SPRING 1997 AGRI/ECON 101 GREGORY A. BAKER

ISSUE ANALYSIS: ENDANGERED SPECIES ACT

In recent years the protection of endangered species has been the topic of much debate. Environmentalists contend that when species are endangered, the primary concern should be their protection. In the case of the northern spotted owl, their protection means safeguarding their habitat, which is primarily old growth forests. The timber industry has argued that environmental concerns must be balanced with economic concerns, such as employment in the logging industry.

Group Assignments

GROUP I

Your report and presentation should support the argument for strict regulations protecting the habitat of endangered species, specifically the northern spotted owl.

GROUP II

Your report and presentation should support the position that economic considerations take precedence, or at least deserve equal consideration, relative to environmental concerns, in this case the northern spotted owl.

Santa Clara University - Leavey School of Business

Institute of Agribusiness

SPRING 1997 AGRI/ECON 101 GREGORY A. BAKER

ISSUE ANALYSIS: BST

Bovine somatotropin (bST) is a natural protein produced in the pituitary gland of all cattle. It is a bovine growth hormone, which can now be produced very cheaply using recombinant DNA technology (biotechnology). When administered to lactating dairy cows bST stimulates increased milk production. Feed consumption also increases, but at a rate less than the increase in milk production. Therefore, less feed is used per pound of milk and production costs fall. No difference has been detected in milk quality as a result of this new technology, although some studies have shown a small detrimental impact on the cows which are given bST. The use of bST would increase milk production unless the number of cows were reduced. The milk price is currently supported by the government and there is a large surplus of milk and milk products. Companies such as Monsanto worked very hard for regulatory approval of bST. Some consumer activists groups lobbied strongly against its approval, arguing that it is not needed and not worth any risk, however small.

Group Assignments

GROUP III

Your report and presentation should support the argument for continued use of bST.

GROUP IV

Your report and presentation should support the position that bST be banned.