WASHINGTON, April 16, 2014 - A new technological epoch for U.S. agriculture, driven by information technology, has enormous promise but faces threats from a political system that is slow to adapt, Deere & Co. Chief Economist J.B. Penn told a Purdue University audience last week.

“Data-directed” innovations “can greatly improve productivity [and] product quality . . . while also helping to reduce agriculture’s environmental footprint,” Penn said in remarks prepared for the 40th annual James C. Snyder Memorial Lecture sponsored by Purdue’s Department of Agricultural Economics.

Penn believes that agriculture today is “at the laboratory stage for entirely autonomous machines” that enhance managerial ability but also raise concerns about the use and security of data collected by the new technology. Its adoption also “could even hasten change in the already-evolving, traditional owner-operator farm model,” he says. The change may not be rapid but “will likely lead to the end of the dominance of the owner-operator-entrepreneur and possibly the future disappearance of the traditional farmer-owner model,” he adds.

Like previous eras in agriculture – those marked by mechanization, development of hybrid seeds and chemical pest control and plant nutrients and adoption of biotechnology, he says the new era will face obstacles. “The possibilities and the dislocations of this era are not well appreciated by the public, by opinion leaders and policymakers or even by many in the industry itself,” he says. “Many new and unfamiliar challenges will emerge from this setting to confront us. Successfully addressing them will require fresh mindsets and new analytical approaches.”

Penn, a former undersecretary for farm and foreign agricultural services at USDA, says the advent of the biofuels market and rapidly developing protein demand worldwide “produced perhaps the greatest economic boom in history for U.S. farmers.” That in turn creates “a much different business backdrop for the global farm sector going forward than was experienced for decades in the past century.” The challenge is “to constantly update our paradigms, mindsets, and not get trapped in the strictures of the past,” he adds.

Among several roadblocks to fulfillment of agriculture’s potential in the years ahead, he says, is lagging investment in productivity growth and in the infrastructure needed to move products to market. As other major food-producing countries invest in farm-to-market roads, railways and ports, they are increasingly competitive in global markets. Where the United States once had 54 percent of the world grain market, its share has declined to 23 percent today, he points out.

Other potential barriers he sees grow from “a curious strain of skepticism being exhibited across some large segments of society today” that is shown in European refusal to accept biotechnology and U.S. reluctance to acknowledge climate science. “The antagonism to modern production agriculture in the U.S. and Europe is another – as evidenced by the organic, local food, GMO labeling, vegetarianism and other anti-modern agriculture movements,” Penn adds. “Further slowing the process – and politicizing it – affects the future rate of productivity growth and figures prominently in meeting the challenge of feeding the global population.”

Despite political squabbling over global warming, he says, “evidence continues to mount that global climate patterns are indeed changing.” Studies “increasingly suggest that this change will be a net negative for agriculture and food production,” he notes. “The impact of climate change on our ability to meet the challenge of feeding the world sustainably by 2050 remains to be determined but surely cannot be ignored.”

These and other challenges suggest that existing U.S. agricultural policy needs reevaluation. “Some argue,” he says, “that a more forward-looking, more visionary, more anticipatory policy is needed.” Such a policy would address climate change and water needs, “big data,” science-based research and regulation and infrastructure – areas “far more important than expending political capital on protecting specific commodity programs that are geared to a former time.”

While expanding trade in food and agriculture is critical to U.S. agricultural interests and is essential to meeting global food security goals, “instead of more unfettered trade, the pendulum actually is swinging in the opposite direction,” Penn argues. “With the Doha multilateral negotiations largely unsuccessful, protectionism is on the rise worldwide,” he says, and critics threaten new agreements that could open trade with Europe and the Pacific Rim. While the U.S. “already can produce well beyond domestic food needs, productivity advances almost certainly will far exceed the consumption growth, so the excess capacity will only grow,” he adds.


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