University ∙ Department of Agricultural
656 Krannert Bldg.
688 Krannert Bldg.
T Th noon-1:15 in KRAN G007
MWF noon-1:15 in my office; drop-ins welcome at other times
In this course we analyze how the agricultural sector changes over time, interacting with government policies in both the farm and nonfarm sectors. Our goal is to explain and predict major trends and differences across countries, using economic theory to explain and predict what governments will do and how agents operating in the food and farm sectors are likely to respond. Lectures and homework assignments are used to provide insights into economic aspects of a wide range of issues affecting the agricultural sector.
Note that I am generally available during the times listed above, and more generally on class days. I maintain an "open door" policy regarding office hours. However, I have a number of commitments other than AGEC 640, so I strongly recommend that you make an appointment to see me to guarantee that I will be available when you come to my office. Use of email for questions and scheduling of appointments is strongly encouraged. To schedule an appointment, contact my secretary, Carmen Turner (phone: 494-5794, email firstname.lastname@example.org).
The course is designed for first-year graduate students. There are no specific prerequisites, but more advanced students with stronger backgrounds in economics will be able to apply that knowledge in the context of this course. Readings are intended to be accessible for all graduate students, and can be interpreted at various levels of depth.
1. Provide students with an understanding of the
agricultural sector, its evolution, and the role of policy in shaping the
2. Provide students with analytical tools
relevant to the study of the agricultural sector.
3. Provide students with a classroom environment that is conducive to learning and skill development, which is supportive of student expression of ideas and opinions.
This course follows a lecture format with homework assignments and exams used to reinforce understanding of class material. Student participation in class discussion is expected. All information regarding the course, including assignments and the class schedule is available via the course home page at: http://www.agecon.purdue.edu/academic/agec640/
The course begins with a brief overview of the major policy issues and drivers of change in the food and agricultural sector around the world. We then spend the bulk of the semester building up the analytical methods and results developed by economists to explain and predict household choices, market outcomes and government policies, starting with farm households’ decisions over production, consumption and trade. We consider the role of biological constraints, first for nutrition and health, and then for farm productivity, and ask how those constraints can be overcome through technology and specialization. We ask how market prices are formed, how market outcomes respond to various kinds of changes, and what (if anything) we can infer from those outcomes about changes in the well-being of market participants. We then examine the evidence on what governments actually do across countries and over time, and try to explain those interventions in economic terms. The focus of the course is on these modern “political economy” explanations of policy choices, in which government actions are explained as the result of equilibrium among optimizing people in both the public and private sectors. The course concludes with presentation and discussion of student projects.
A complete course packet is available for purchase at BoilerCopy, in the Purdue Union; some readings are also on-line, with links provided from this syllabus and the course website. Others will be distributed, as needed, in class.
Links to the three homework exercises are included in the electronic version of this syllabus; opening those documents online offers you live links to the data sources need to complete the assignment.
Your semester-long project is expected to be an analytical review of the literature on a researchable question. This will help you get started on a thesis or other research paper, offering the chance to conduct a deeper analysis of the existing literature than might otherwise be possible. Some students may already have access to interesting data and an appropriate method, in which case it might be possible to use the project as a vehicle to produce an original research paper instead of a literature review.
I can advise you on what topics are likely to prove most fruitful. Often I will encourage you to do this course project on the same topic as other work you are pursuing so as to specialize and achieve a deeper level of analysis, but sometimes it is preferable to diversify and start research on something new. Please read (and re-read) carefully the guidelines for the course project as you work on it.
The final result of the project is a written report. The report has a length limit of 20 double-spaced pages, inclusive of all charts, tables and references. You will also present your report in class, using a maximum of five slides. For the class presentation the five-slide limit will be strictly enforced, to help you practice distilling results into a very brief message that can be communicated visually and in person.
To make the project as productive as possible, we will proceed in stages. First, you must send as an email to me a title and brief (maximum one-paragraph) description of your chosen topic. You must do this by the start of class on Thursday October 11th, so I can provide feedback in a timely manner. This feedback will allow you to modify your goals accordingly. The second stage is to submit a rough first draft to me for comments. A printed copy of this rough draft will be due in class on Tuesday, November 13th). This is well before you will be scheduled to present the results in class (on November 29th, December 4th and December 6th). The final report will be due in my office by 5pm on the Friday before finals week (December 7th). You will be required to submit your final paper in both hard copy (printed) and electronic (pdf) formats.
Two exams will be given. A mid-term exam will be held in class following October break. A final exam will be given during the regular final exam period. These exams are designed to test understanding of concepts and course material. Each exam will have equal point value. The two exams will cover material from both the readings and the lectures, for which slides will be posted online on the day of each lecture. The final exam will be comprehensive, covering both halves of the course.
final course grade will be computed from points earned from homework
assignments, examinations and a course project, as follows:
Homework assignments (3@ 10% each)
Exams (2 @ 20% each)
Please note that my primary out-of-class method of communication will be via email to your Purdue email address. I will not generally attempt to contact you at email addresses other than your Purdue email address. It is your responsibility to check for mail on a regular basis. I recommend checking your Purdue email account at least once every 24 hours.
If you have a disability that requires academic adjustments, please make an appointment to meet with me during the first week of classes to discuss your needs. Please note that university policy requires all students with disabilities to be registered with Adaptive Programs in the Office of the Dean of Students before classroom accommodations can be provided.
University policy on academic dishonesty is clear: academic dishonesty in any form is strictly prohibited. Anyone found to be cheating or helping someone else cheat will be referred directly to the Dean of Students for disciplinary action. Penalties are severe and may include dismissal from the University. The risks associated with cheating far outweigh the perceived benefits. Academic dishonesty includes citing someone else's work as your own, using "cheat sheets" or sharing your answers with someone else. If you are unsure whether your planned action constitutes academic dishonesty, seek clarification from your instructor. Other information regarding your rights and responsibilities as a student is contained in the Purdue University Code of Conduct. Writing assignments for this course will be checked for originality using the iThenticate software.
In the unusual event of a major campus emergency, course requirements, deadlines and grading percentages are subject to changes that may be necessitated by a revised semester calendar or other circumstances. To get information about changes in this course visit the course home page, contact me by email at email@example.com, or call me at my office (494-4218) or at home (743-6439).
CLASS TOPICS AND READINGS
Week 1. No class meetings
8/21 No class
8/23 No class
Optional review of Background Material (not in readings packet; available online)
World Bank, World Development Report 2008: Agriculture for Development. Washington, DC: World Bank.
New background reading (added 8/28) – hot off the press:
Otsuka, K. (2012) “Food Insecurity, Income Inequality, and the Changing Comparative Advantage in World Agriculture.” Presidential Address at the 27th International Conference of Agricultural Economists, Foz do Iguaçu, Brazil. (hyperlinked here).
Week 2. Introduction and background
Abbott, Philip C., “Development Dimensions of High Food
Prices.” Paris: OECD, May 2009 (95 pages).
Masters, W. 2008. “Beyond the Food Crisis in Africa.” African Technology Development Forum, 5(1-2): 3-13.
Week 3. Introduction to agricultural policy
Norton, G.W., J. Alwang and W.A. Masters (2006), “Economic Transformation and Growth”, chapter 6 in Economics of Agricultural Development (Abingdon: Routledge), 20 pp.
Tomich, Thomas P., Peter Kilby and Bruce F. Johnston (1995), "Poverty and the Rural Economy" and "Structural Transformation" (excerpts), in Transforming Agrarian Economies (Ithaca, NY: Cornell University Press), pp. 9-19 and 35-48.
Montgomery, Keith (2000), “Notes on the Demographic Transition.” Also available online, http://www.uwmc.uwc.edu/geography/Demotrans/demtran.htm.
Week 4. Farm households, the “industrialization” of agriculture, and technology
Allen, D.W. and D. Lueck, The Nature of the Farm: Contracts, Risk and Organization in Agriculture (Cambridge: MIT Press, 2002), excerpts: “Farming in North America” (pages 17-26), “Farm Organization and Vertical Control: Historical and Current Case Studies” (pages 181-191).
Alston, J.M, M.C. Marra, P.G. Pardey and T.J. Wyatt, "Research returns redux: a meta-analysis of the returns to agricultural R&D." Australian Journal of Agricultural and Resource Economics, 44 (2, June 2000): 185-215.
Week 5. Nutrition and food markets
Haddad, L. et al., “Nutrition Trends and Implications,” chapter 2 in The Fifth Report on the World Nutrition Situation: Nutrition for Improved Development Outcomes. UN Standing Committee on Nutrition, March 2004.
#2: Food prices, nutrients and the least-cost diet (due Thursday
9/27 at start of class)
Week 6. Market equilibrium and social welfare
9/25 Market equilibrium
with trade and policy (slides 1-21)
9/27 Policy incidence and social welfare: value and limitations of economic surplus (slides 22-40)
Schmitz, A., H. Furtan and K. Baylis, “Theoretical Considerations” and “Trade and Macroeconomic Effects”, chapters 4 and 5 in Agricultural Policy, Agribusiness and Rent-Seeking Behavior. Toronto: University of Toronto Press, 2002), pages 83-118 and 119-153.
Hines, James R., Jr., "Three Sides of Harberger Triangles." Journal of Economic Perspectives 13(2, Spring, 1999): 167-88.
Week 7. Policies and their impacts
Week 8. Protection, concluded
10/09 Oct. break -- no class
10/11 Aggregate measures of support (slides 44-71)
Tsakok, I. (1990)
“Single-Market Analysis: Calculating the Impact of Price Policy,” chapter 6 in Agricultural
Price Policy (Ithaca: Cornell University Press), pages 158-182.
OECD (2008) “Agricultural Policies in OECD Countries at a Glance 2008” (Paris: OECD), pages 33-58.
Reminder: mid-term exam to be given Tuesday 10/16 in class
Week 9. Mid-term exam
10/16 Mid-term exam (an example of a previous exam is linked here).
10/18 Feedback: midterm exam results and review
Week 10. Measuring Impacts using Household Survey Data
Week 11. Measuring Impacts using Household Survey Data
10/30 project planning and
notes on effective writing
11/01 No class meeting; individual work on course projects
Week 12. Explaining policies: economics of the public sector
Hillman, A., “Private Solutions for Externalities” and “Public
Policy for Externalities,” ch. 4.1 and 4.2 in Public
Finance and Public Policy: Responsibilities and Limitations of Government (New
York: Cambridge University Press, 2003), pages 228-294.
Week 13. Rent-seeking and political economy
Hillman, A. (2003) “Political Behavior and Public Policy” and “Public Policy and Rent-Seeking Behavior,” ch. 6.2 and 6.3 in Public Finance and Public Policy: Responsibilities and Limitations of Government (New York: Cambridge University Press), pages 416-460.
Masters, W.A. and A. Garcia (2010) “Price Distortion and Stabilization: Stylized Facts and Hypothesis Tests,” in K. Anderson, ed., The Political Economy of Agricultural Price Distortions. Washington, DC: The World Bank.
Anderson, K. (1995) "Lobbying Incentives and the Pattern of Protection in Rich and Poor Countries." Economic Development and Cultural Change 43(2): 401-424.
Cadot, et al. (2004) “Lobbying, Counterlobbying and the Structure of Tariff Protection in Poor and Rich Countries.” World Bank Economic Review 18(3): 345-366.
Yao, Yang (2011) “From production-oriented to welfare-oriented government.” East Asia Forum Quarterly 3(2): 6-7. (not in packet, linked here and distributed in class).
Week 14. Political economy of agricultural policy (continued)
Political economy theories and
11/22 Thanksgiving (no class)
Week 15. Wrapping up and project presentations
on drafts and revisiting the World Food Crisis of 2007-08
11/29 Student presentations: Group A
Project assignment #3: in-class presentation with slides (coming
Week 16. Project presentations
12/04 Student presentations: Group B
12/06 Student presentations: Group C
12/07 Final paper due in KRAN 656 by 5:00 pm
12/10 Final exam, 1:00-3:00pm, KRAN G007