Research Brief: Soybean Network Diffusion

-

Once again, I'm going to discuss a recent publication of mine (potentially the last one for a while). This time is different. Rather than try to give a high-level overview that abstracts away from all the math and statistics and coding - though some would argue that is the interesting part - I'm going to put the research almost into story form.

It all started with my paper with Tanner McCarty about hemp pollen drifting from one farm to another and messing things up. We had no data but had to act quickly, so I took part in a paper that was precisely what I thought I swore off of: economic theory. After the KY Department of Agriculture provided us with some key farm-level data on hemp production, we wrote and published another paper in the AJAE.

In the midst of that publishing process, it was brought to our attention by a fellow ag economist that this sort of problem was going on in the soybean sector. Needless to say, Tanner and I were eager to branch out of an area as niche as hemp and into something more mainstream (and with a larger economic footprint) like soybeans.

The context: farmer A plants soybeans with Enlist genetics (resistant to 2,4-D, glyphosate, etc.) while farmer B plants soybeans with Xtend technology (resistant too all of the above plus one more: dicamba). This is fine, as long as the non-resistant soybeans don't get a whiff of any dicamba. But that's not a problem unless dicamba drifts, right? Well, that's exactly what has earned dicamba its notoriety these last few years. Bear in mind, planting decisions are annual and fixed. If a farmer plants Enlist soybeans and their neighbor plants Xtend and sprays dicamba, then they're opened up to risk of significant yield loss --- no backsies.

What's to be done? Well, in the short run, sometimes the best offense is a good defense. In other words, maybe the farmer who got their soybeans damaged by dicamba this year decides to plant Xtend soybeans next year as a defensive maneuver. May as well go all out and spray dicamba now that your new choice of seed is resistant to it, right? But now that farmer risks harming another non-adopting neighbor's soybeans, and if they do then that neighbor will switch the next year, and so on until there will be large pockets of acreage where it's no longer safe to be a holdout and grow the non-resistant variety of soybeans. Note that all of this excludes anything about the effects on social capital between neighbors who farm together and may have known each other for most of their lives.

So Tanner and I teamed up with some coauthors who study more of the scientific side of dicamba damage to non-resistant crops, and we went to work. We used a modified version of our method we developed in the AJAE paper, since soybeans are more conventionally produced than hemp. At long last, all our work paid off and we got the paper across the finish line at the JAAE right at the beginning of summer.

We mentioned in the discussion that at the time of the paper, Minnesota was weighing two pilot solutions that intrigued us. The first is a simple higher taxation on gross sales of dicamba, and the second is a Coase-type bargaining framework where Xtend and Enlist growers reach an agreement together concerning potential damages.

I can't help but think that overly stringent taxation would lead to (1) black market buying & selling of dicamba between states as it has in the past, and (2) a problematic resurgence of weeds that are resistant to all other herbicides (e.g. palmer amaranth or "pigweed"). The second solution seems, for lack of a better word, quite clever to me. In part that's because Coasian bargaining fascinates me, as does game theory in general. Indeed, "The Problem of Social Cost" by the late Ronald Coase in 1960 analyzes a hypothetical problem between a crop farmer and a cattle rancher that is not only easy to understand, but still very interesting and applicable today. Give it a read when you get 5-10 minutes.

Whatever the case may be, we're beyond excited to see what's next for this track of research. I'm hopeful our findings now and those still to come will benefit all the players in this intricate ecosystem of production agriculture, but especially --- speaking as one of them --- the farmers.

Popular posts from this blog

Specialty Crop Hobby Update: Pawpaws

-
Image
I'm generally not a fan of the Fall season. Everything that was once green is now turning brown; what was once blooming and full of life now looks...well, not that. Also, it's getting colder, but at least the bugs are on a shortened timer --- especially mosquitos. Make no mistake: I love that apples are in season, and it's pretty hard to beat a drink of in-season cider. Not to mention, we typically associate Fall with crop harvest, which means (hopefully lots of) grain being stored ready to market (hopefully profitably). But there's one thing that is unique not just to North America, but this part of the US for many thousands of years, and that is the largest tree-borne fruit native to the continent. I'm talking about the pawpaw. Other names include "The Poor Man's Banana", "The Indiana/Hoosier Banana", and "The Mississippi Banana". Quite the pattern in the alternative names, no? Anywhere from mid-September to early-October, the paw...
Read more

Will Farmer's Markets Benefit from the Food Tariffs? ---PART 1---

-
Image
 There's something special about farmer's markets. My family and I love farmer's markets. In grad school at Purdue, we hit up all available, and rarely missed any. Saturday mornings across the river in Lafayette; Wednesday evenings just down the street in West Lafayette; and outside the school year, Thursday mornings on Purdue's campus (side note: why don't more college campuses host farmer's markets?)  Before we had any kids, in 2016 my wife and I went to Boston for the AAEA annual meeting (ag economics conference). In Copley Square beside Trinity Church was the largest farmer's market I've ever been to in my life, even to present day. Blueberries brought down from Maine, locally baked goods, just about anything you could think of was available in massive quantity. (source: https://www.newenglandopenmarkets.com/boston-open-market)  We're rather partial to our small, local market in Downtown Murray. It's a fraction of a fraction of the size of th...
Read more

Will Farmer's Markets Benefit from the Food Tariffs? ---PART 2---

-
 In my last installment, I opined that farmer's markets are a unique outlet in the food supply chain, in part because we see so many elementary economic lessons at play. With the new tariffs on imported foods coming on the scene (except for when they're not, but usually are on again, but sometimes off again, though there are exceptions, except when there aren't, etc.) grocery prices have started to rise.  A student in my supply chain management class gave a presentation last week about his uncle's BBQ restaurant and said they've quit offering certain types of fish on their menu: their suppliers stopped carrying it so as not to have to suffer the tariff, while the alternative for the uncle was to pay >2x the price at Sam's Club or Costco for the same fish.  If consumers (and restauranteurs alike) are about to face higher food prices no matter where they shop, does this mean that people now have an additional incentive to just go to farmer's markets? Potent...
Read more