Author: ecogrow

Despite the emergence of tariffs throughout the world before World War I, the degree of agricultural protection in European countries was in the modest range of 20 percent to 30 percent. These tariff duties did not prevent the expansion of agricultural trade. At the end of World War I, a substantial international division of labor continued in the production of agricultural goods. The second wave of expansion of government intervention in agriculture took place during the economic crisis of the 1920s and 1930s. The pattern of a particular nation’s response to the crises followed lines associated with its net position in international trade.For example, in France,Germany, and Italy rates of protection on foodstuffs more than doubled between 1927 and 1931. Even Britain converted to protectionism in 1931, although the free entry of produce from its empire meant that tariff protection was of limited importance to domestic agriculture. In more recent U. S. history, the recession of the early 1980s, the associated high real rates of interest, high exchange values of the dollar, and slow world economic growth put enormous pressure on agriculture. The macroeconomic environment combined with intervention designed in the 1981 Farm Bill to create embarrassing surpluses and unacceptable levels of resource misallocation. The 1981 U. S. Farm Bill set support and target prices at levels designed for a strong export and price performance in the grain sectors. Due to macroeconomic conditions, however, this scenario failed to materialize. More importantly, the 1981 Bill did not allow for flexibility and, as a result,blackberry container programs sustained high production which led to accUmulations of government owned stocks and agricultural expenditures of crisis proportions.

This mess can be referred to as a ‘~olicy disequilibrium.” Response to this specific policy disequilibrium was the Payment-In-Kind Program of 1983. PIK led to even greater expenditures and failed to alleviate the serious problem of surplus stocks. The path followed by agricultural commodity markets over much of the last two decades closely resembles other markets for freely traded commodities such as gold, silver, platinum, copper, and lumber. Stocks also accumulated for these commodities during the 1970s and early 1980s, suggesting that sectoral conditions and government policies are only a part of the explanation for the behavior of agricultural commodity markets. The search for a complete explanation leads to a multi-market perspective and an investigation of external linkages with other markets. Since 1972, conventional wisdom has placed increasingly less emphasis on the inherent instability in commodity markets and more emphasis on external linkages with other markets. Deregulated credit and banking has resulted in greater exposure of agriculture to conditions in the domestic money markets. Also, the shift from fixed exchange rates to flexible rates, in much of the Western world, exposed commodity markets to international money and real trade flows. The emergence of well-integrated, international capital markets meant that agriculture, through domestic money and exchange rate markets, became more dependent on capital flows among countries. The linkages between commodity and money markets are indeed pervasive. In the United States, farming is extremely capital intensive and debt-to-asset ratios have risen dramatically over the last 10 years. As a result, movements in real interest rates have a significant effect on the cost structure facing agricultural production. Storage and breeding stocks especially are sensitive to interest rates. On the other hand, the influence of interest rates on the value of the dollar affects the demand side for farm goods. The close connection between agriculture’s health and interest rates suggests that this sector is vulnerable to monetary and fiscal policy changes.

It has been argued, with much justification particularly since 1980, that the instability in monetary and fiscal policy has contributed greatly to the instability of agriculture markets.Unstable macroeconomic policies are thought to impose sizable shocks on commodity markets. This would be especially true if agricultural commodity markets have flexible prices while other markets have stickier prices. And, indeed, without governmental price supports, agricultural prices are generally more flexible than non-agricultural prices. This is true in part because contracts for agricultural commodities tend to be written for shorter duration and because biological lags tend to cause agricultural supply to be unresponsive to price changes in the short run. This fixed/flex price model of markets is necessary, but not a sufficient condition, for money non-neutrality to imply overshooting agricultural prices . Overshooting in this context is defined as a price path which exceeds the new eventual price equilibrium. Flex-price commodity markets and fixed-price non-agricultural output markets combined with “small” output responses mean that overshooting in agricultural sector markets will occur even if expectations are formed rationally. Such overshooting results from the spillover effects of monetary and fiscal policy on commodity markets. Given a world of fixed- and flex-price markets, the driving force behind overshooting is the real rate of interest and the ability to arbitrage across markets. When in the short run real interest rates rise above long-run equilibrium rates, immediate pressure arises to drive flexible commodity prices downward . In much of the 1970s, real interest rates were below their long-run equilibrium levels and, for some periods in the 1980s, real interest rates were above. Overshooting combined with ‘myopic” expectations means that ”macro externalities” will be imposed upon the agricultural sector .

In the case of interest rates facing U. S. agriculture, interest rate disequilibrium was even more pronounced due primarily to the relative importance of the Farm Credit System. The System’s organizational structure amplifies the disequilibrium and generates more overshooting than would otherwise result. Within the Farm Credit System, borrowers are, in fact, owners and no dividends are paid to stockholders. As a result, during favorable economic periods, the only way owners might extract benefits generated by the system is by increasing borrowing levels at interest rates below those for the rest of the economy. Indeed, through much of the 1970s, interest rates to farmers were dramatically below general market rates while, during the 1980s, the opposite result was true.Empirical evidence supports the view that agricultural output responses are not sufficiently flexible to counter the tendency for prices to overshoot, and that expectations are, at best, only ”myopicany” rational. Bordo has shown empirically that prices of raw goods respo~d more quickly to changes in money supply than do prices of manufactured goods. Andrews and Rausser have shown that, during the large cyclical downturns of the early 1930s and the early 1980s, prices fell more and quantities less in the agricultural sector than in any of nine other sectors of the U. S. economy. In the case of interest rates, numerous studies have shown that real rates vary significantly across countries,planting blueberries in a pot refuting the old view that they remain constant. These results also suggest that the purchasing power parity assumption does not hold, even approximately. In other words, exchange rate changes do not offset changes in relative price levels across nations. Frankel and Hardouvelis’ study on monetary surprises rejects the flex/flex specification in favor of the fixed/flex specification. Their empirical results show that, when announced money supply turns out to be greater than the public expected, nominal interest rates tend to rise and the prices of basic commodities tend to fall. If the flex/flex specification were correct, then interest rates and commodity markets would either both rise or both fall . The only hypothesis that explains the reactions in both interest rate and commodity markets is that increases in nominal interest rates are also increases in real rates. The public anticipates that the Federal Reserve will reverse any recent fluctuation in money stock, thus increasing interest rates and depressing the real prices of commodities. The aggregate effects of money supply on raw agricultural product prices, retail prices of food products, and the nonfood Consumer Price Index also support empirically the idea of overshooting. Consistent with money nonneutrality and raw agricultural prices being generated by flex-price markets, Stamoulis et al. found the money supply to be a more important determinant in explaining raw product prices than in explaining the nonfood CPI or the index of retail food prices.The linkages discussed above run from the macroeconomic sector to the agricultural food sector. These causal influences may be defined as forward linkages. The most important forward linkages include those observed in the cost structure of production , in general economic conditions and food demand, in inventory behavior and the demand for storage,and in animal breeding stocks.

The macroeconomic variables included in these linkages are interest ratest personal income t and nonfood and general inflation rates. There are effects that run from agriculture to the general economy. These linkages may be defined as backward linkages. There are three main influences on macroeconomy reflected backward from agriculture: on the general inflation rate t on governmental deficits or surplusest and on the balance of trade. These three components cant in turn t have dramatic effects on employment real interest rates, investment t economic growth t and so on. Food prices are a major component of any general price index, and this linkage is important everywhere that the general rate of inflation influences macroeconomic conditions. This is true not only in the demand for money balances, and the willingness of individuals to hold productive and speculative assetst but also in the determination of real wagest real income t and the demand for exports. The linkage through government deficit arises because the outcome for prices, production, private storage, and other variables endogenous to agriculture t determine in part the level of federal spending. As government deficits and expenditures rise, there is a positive effect on consumption and investment. Over the short runt there are multiplier effects leading to further increases in economic activity and in tax revenues, which are a positive function of economic growth. InterestinglYt the operation of government storage and deficiency payments are examples of expenditures that are endogenously determined. This feature is in contrast to much of the non-farm components of the federal budget that are fixed in dollar terms.In addition to these more direct forward and backward linkages within the domestic economy, there are important inter dependencies between the monetary policies of different countries. These also represent indirect linkages between a domestic macroeconomy and agriculture. Monetary linkages between nations have important implications for exchange rates and worldwide recessions. For example, as U. S. monetary policy change? responses in the rest of the world affect to some degree foreign economies, exchange rates, and prices which, in turn, translate into shifts in the export demand facing domestic farmers. Under fixed exchange rate regimes, such as the monetary system set up by the Bretton Woods agreement, central banks are compelled to intervene to maintain a fixed value of their domestic currency vis-a-vis foreign currencies. With flexible rates, no such intervention is necessary. fuile monetary authorities may still intervene from time to time in foreign exchange markets, such actions have become discretionary. Under fixed exchange rates, expansionary monetary policies in one country cause similar expansionary policies in others as they observe their currencies appreciating. The country beginning the expansionary process is said to have “exported” its inflation. When exchange rates are flexible, no obligation exists to maintain exchange rates by domestic inflation. Only if nations keep rates within a certain range in a ”managed float” can inflation be exported. MCKinnon and others have emphasized in recent years that the argument for monetary independence between nations under flexible exchange rates involves an untested assumption about the portfolios of money holders. A monetarily independent country must be an “insular” economy, at least as far as money demand is concerned. Money holders must not substitute for foreign currency holdings’ when the domestic currency becomes less desirable, nor vice versa. If this is not true, currency substitution implies that the effects of domestic monetary policy are exported even under perfectly flexible rates. This exporting of monetary policy and the resulting loss of independence can occur in two ways. First, when there is substitution between currencies, money growth rates are conditional on expected money’ growth abroad. For example, suppose the United States engages in some unanticipated monetary policy, say, expansion. There will be an increase in the demand for the foreign currency, if domestic expansionary policies are expected to depreciate the value of the dollar.

There are several methodologies developed in the last few years that can provide more accurate estimates of GHG emissions in California . These methods incorporate the impact of diet, accounting for, as an example, the fact that fiber content is positively associated with methane emissions while lipid content is negatively correlated. About half of California’s livestock GHG emissions comes from enteric fermentation and half from manure in concentrated beef cattle and dairy operations. The largest opportunities for changes in livestock practices center on feed and manure management. California offers a uniquely diverse range of crop byproducts for use as dairy cow feeds, and research has improved our understanding of the impacts of different feeds on productivity, economics and GHG emissions . For example, grape pomace, a byproduct of the wine industry, has been shown to reduce methane emissions when fed to dairy cattle in pelleted form without reducing milk production . A shift towards solid manure management practices may result in reduced GHG emissions by reducing the anaerobic digestion that occurs when water is used to flush manure into storage lagoons. However, Owen and Silver indicated solid manure management can produce substantial GHG emissions; thus, minimizing manure storage time is important to mitigating emissions. One caution: there is a risk that focusing on one climate pollutant, such as methane,large plastic pots for plants could lead to practices that have negative trade-offs, such as increased N2O emissions , and nutrient loading in soil and water .

A recent report submitted to the California Air Resources Board suggests it may be technically feasible for California to achieve a 50% reduction in methane emissions from dairy manure management by 2030 if supportive policies are created . This would require capturing or avoiding methane generated from manure storage on dairies from an estimated 60% of dairy cows in California, particularly the largest dairy operations where cost-benefit considerations are most favorable . If successful, a gallon of California milk may be the least GHG intensive in the world. The report outlines several alternative manure management practices and technologies. A diversity of practices is needed to reflect the range of dairy sizes and layouts in California. For example, lagoon storage systems, which can emit large amounts of methane, lend themselves to the use of covers or engineered anaerobic digestion systems for bio-methane collection. Potential trade-offs of these practices with respect to air quality, crop management, nutrient use efficiency and cost, however, require further analysis. Pasture systems are used in coastal areas where farms have less crop land available than in the Central Valley; pasture requires significantly more land and water for feed production compared to current dairy systems that rely on corn silage, grass silage and alfalfa . Comprising more than two-thirds of California’s agricultural acreage , these working lands provide ecosystem services in addition to supporting production of livestock. Grasslands have higher levels of total soil carbon compared to cultivated lands , and similar amounts to California forests. There are numerous options for increasing carbon storage in rangelands. Modeling analyses project that restoration of native oaks could increase carbon storage in wood biomass and litter . In a study of riparian revegetation in Marin, Sonoma and Napa counties, modeled soil carbon sequestration rates averaged 0.8 tons C per acre per year, while modeled results of restored woody riparian areas demonstrated ecosystem carbon storage potential of 16.4 tons C per acre per year over a 45-year period . Cultivation and re-seeding to restore native perennial grasses also shows promise.

Native grasses may sequester carbon in slightly deeper soil levels due to perennial root systems . Rangelands with native grasses and oaks have lower soil carbon losses and higher nitrogen cycling rates . Approaches to verifying carbon sequestration on rangelands requires a long-term approach. Soil carbon can take decades to build to a measurable level: rangelands rarely receive intensive management and these systems are much more exposed than irrigated agriculture to annual variations in moisture. On average, California’s grasslands lose carbon, but the net C gain or loss depends on precipitation, with net losses of carbon in years when the timing of precipitation causes a short growing season, and gains when the timing of rains lead to a longer growing season . The use of composted materials in rangelands may reduce N2O emissions in comparison to those materials entering waste streams and being subject to the standard manure and green waste management practices . One study on California’s coastal and valley grasslands showed that use of compost above standard application rates could boost net ecosystem carbon by 25% to 70%, sequestering carbon at a rate of 0.2063 tons C to 0.2104 tons C per acre over the 3-year study or a rate of 0.0688 tons C to 0.0701 tons C per acre per year, largely by decreasing the amount of C that is being lost from these grasslands . Researchers using the DAYCENT model to look at different compost amendments and project over longer time frames found that the net climate mitigation potential ranges from 0.5261 to 0.6394 tons CO2 equivalent per acre per year in the first 10 years , and declines by approximately half of that by year 30. Applying organic materials to rangelands in Southern California demonstrated co-benefits: stabilizing soil nitrogen stocks, improved plant community resilience and productivity, and increased soil organic matter after 1 year of application . However, due to the very limited number of studies and the need to demonstrate sustained carbon sequestration, long-term studies that span California rangelands are needed to validate these results and provide long term policy recommendations. Climatic variation across the state may enhance or diminish observable carbon sequestration benefits.

Further, it will be important to ensure that rangeland compost application practices do not lead to undesired plant species shifts and do not create negative trade-offs for water quality through nutrient run-off or leaching; it will also be important to track emissions associated with fossil fuel use for transportation and distribution of compost across rangeland sites. Additional practices that have shown benefit elsewhere and should be examined in California include planting of legumes, fertilization, irrigation and grazing management. In particular, grazing management may significantly impact rangeland carbon sequestration. While heavy grazing that leads to erosion can degrade carbon storage, there is conflicting evidence in California and elsewhere on specific grazing practices that can benefit soil carbon . Most studies in California that have assessed the effects of grazing on soil carbon compared only grazed versus ungrazed , without assessing the effects of grazing duration, intensity, frequency and rest periods. The USDA Natural Resources Conservation Service provides cost-share programs for range managers to split the cost of implementing improved management techniques. Currently, only 30% to 40% of California ranchers participate in these programs . The research above points to the magnitude of opportunity from alternative rangeland practices and the need to identify socioeconomic opportunities and barriers to greater participation in range management incentive programs.The most recent assessment of biomass in California details the availability of resources, including agricultural biomass, among others,plant pots with drainage that could support generation of three to four times the current biomass-based renewable energy being produced, depending on policies and regulations affecting biomass use . Biomass use for energy, however, has declined in recent years, as it is generally more expensive than alternative fuels. In addition, interconnection issues between biomass facilities, such as anaerobic digesters, and utilities complicate and increase the cost of new facilities. Research and policy actions to reduce barriers and incentivize co-benefits from the use of biomass for power and fuel will be required to expand this sector sustainably. Current biomass energy production from agricultural residues in California is largely based on combustion of nut shells and woody biomass from orchards and vineyards. While one grower has installed a successful on-farm small-scale gasification systems for nut shells and wood chips, larger scale facilities that convert woody biomass to electricity are typically more than 40 years old, and the power produced is more expensive than other forms of alternative energy. Many plants are now idle or closed, leaving tree and vine producers with few or more expensive options for disposal of biomass. Other underutilized agricultural biomass includes rice straw and livestock manures suitable for anaerobic digestion technology . Manure alone is not a high biogas-yielding feed stock.

Supplementing manure with fermentable feed stocks such as crop or food processing residues can improve the energy and economic return from anaerobic digesters , but this practice currently faces regulatory and practical obstacles, like managing an additional source of organic materials and additional nutrients and salts. Nonetheless, there is limited, but real potential for some crop-based bio-fuels and bio-energy in California based on locally optimal feed stocks and bio-refineries .Twenty-five years after the publication of the first IPCC Assessment Report, it is instructive to step back and ask what we have learned about the economic impacts of climate change to the agricultural sector, not just from a technical standpoint, but from a conceptual one. California is an ideal focus for such an analysis both because of its strong agricultural sector and proactive climate policy. After passing the 2006 Global Warming Solutions Act, the state has sponsored research to complete three climate change assessments, with the fourth assessment report in progress at the time of submitting this paper. This effort to study adaptation appears to be relatively more prolific than in many other global sub-regions, particularly over the past decade . Assessing adaptation potential — the institutional, technological, and management instruments for adjusting to actual or expected climatic change and its effects — represents an important turning point in the climate impacts literature. The important role of responsive decision-making by farmers and institutions is recognized for the first time as the key ingredient to dampening the effects of climate change . Adaptation was simply mentioned as an optimistic afterthought in earlier studies, which suggested that agriculture would fully or mostly adjust in the long term — although there was sparse detail on how it would do so . When adaptation was directly included in the modeling framework, economists found that the estimated welfare damages from climate change documented in previous studies declined . In colloquial terms, this is a shift from modeling the “dumb” farmer to modeling one with reasonable economic agency. There are four key concepts linked to the idea of adaptation: vulnerability, adaptive capacity, economic welfare, and economic efficiency. In the IPCC literature, adaptation is connected to the foundational concept of vulnerability, defined as the propensity for agricultural systems to be affected by future climatic changes . Vulnerability can also be defined endogenously as the ability of farmers and institutions to respond and adapt to, and recover from such changes . This latter definition is synonymous with the concept of adaptive capacity, or the ability of a system to moderate potential damages and take advantage of adaptation and mitigation opportunities to reduce vulnerability of the system to climatic changes .Adaptation dampens welfare losses caused by climate change. The relationship of adaptation with vulnerability is more complex, and better represented as that of trade-offs. For example, changing the crop mix in favor of high value crops may reduce vulnerability to water scarcity, but it may increase vulnerability to heat tolerance. Finally, the concept of efficient adaptation has been defined as a situation where the costs of effort to reduce climate-induced damages is less than the resulting benefits from adapting . Given the central role of farmer and institutional responsiveness, how do recent agro-economic assessments suggest that specific adaptations may improve economic welfare and reduce vulnerability? What is economically efficient adaptation in the short and long-run? What are the limits to the agricultural sector’s adaptive capacity? This is certainly not the first review of climate impact assessments to California agriculture. Smith and Mendelsohn highlighted the importance of regional climatic impacts to several economic sectors in California , integrating across range of modeling approaches . The agricultural impacts are calculated by the Statewide Agricultural Production model under wet and dry scenarios. The results echo those of more recent SWAP studies, suggesting that field crop usage will decline by the end of the century under a dry scenario, though the decline in revenues will be partially offset by increased production of high-value crops.

A subset selection strategy was unable to consistently improve on the regular NNGA-DYCORS performance by focusing the coordinate search on the most sensitive sets of parameters. This may be because the RBF does not adequately model a given test function, so it does not correctly identify the most important parameters in the database, or the coordinate search method does not properly exploit the narrowed parameter space. Generically, it may be useful to reduce the dimensionality of the parameter space, but the strategy of doing so using model adherence ‘drop-out’ experiments was not uniformly successful. This article demonstrates that the NNGA-DYCORS hybrid learning algorithm outperforms its constituent algorithms in the important criteria of robustness and generalizability to different kinds of problems. Thus, this algorithm can be applied to a wide variety of physical and biological design optimization problems with a degree of assurance that parameter estimates will be optimal while minimizing necessary resources. In addition, as this hybrid is both robust and highly generalizable to many types of design problems, it should be useful for practitioners who are not experts in surrogate optimization methods, and work on a variety of problems of diverse complexity. Optimizing media for biological processes, such as those used in tissue engineering and cultivated meat production, is difficult due to the extensive experimentation required, number of media components,grow raspberries in pots nonlinear and interactive responses, and the number of conflicting design objectives.

Here we demonstrate the capacity of a nonlinear design- of-experiments method to predict optimal media conditions in fewer experiments than a traditional DOE. The approach is based on a hybridization of a coordinate search for local optimization with dynamically adjusted search spaces and a global search method utilizing a truncated genetic algorithm using radial basis functions to store and model prior knowledge. Using this method, we were able to reduce the cost of muscle cell proliferation media while maintaining cell growth 48 h after seeding using 30 common components of typical commercial growth medium in fewer experiments than a traditional DOE . While we clearly demonstrated that the experimental optimization algorithm significantly outperforms conventional DOE, due to the choice of a 48 h growth assay weighted by medium cost as an objective function, these findings were limited to performance at a single passage, and did not generalize to growth over multiple passages. This underscores the importance of choosing objective functions that align well with process goals. Cell culture media is a critical component of bio-processes such as pharmaceutical manufacturing and the emerging field of cultivated meat products. Optimizing culture media is a difficult task due to the extensive experiments required, number of media components, nonlinear and interactive responses from each component, and conflicting design objectives. Additionally, for cultured meat products, media needs to be less expensive than those currently deployed for other cell culture processes , food-grade, consider safety, component stability, and effects on sensory characteristics of final products. Without much in the way of first principles models for these objectives, especially for adherent mammalian muscle cells used for cultivated meat production , media optimization must be done experimentally with constraints on inputs, outputs, and number of experiments.

Optimizing one factor at a time or with random experiments is still the most common way of exploring design space. This strategy is very inefficient for large systems and is unable to consider interactions among media components. Design-of-Experiments methods are better able to manage large numbers of components in fewer experiments using Factorial, Fractional Factorial, Plackett-Burman, and Central Composite Designs where linear and polynomial models can correlate first order and interactive effects of media components. In general, DOE methods are able to optimize < 10 variables and with the help of screening designs can solve problems > 25 variables , though at the expense of ignoring interactions, screened variables, and easily costing > 100 experiments . Experimental optimization of media has also been done using stochastic methods such as genetic algorithms and this approach is generally suited to optimizing systems of dimensionality > 15 where DOE methods can become experimentally cumbersome, but also take ∼ 200 experiments. Because the size of the design space increases exponentially with the number of design variables, a natural advance was to use response surface models to capture information about interactions and nonlinearity. These techniques can then be used to sequentially identify optimal culture conditions while simultaneously improving modeling accuracy. Oftentimes experimenters will employ polynomial models to find optimal culture conditions but only after extensive DOE to reduce the dimensionality of the problem space to < 5. More advanced modeling techniques are neural networks, decision trees and Gaussian processes which are often better at generalizing noisy, nonlinear, and multi-modal data. When combined with global optimization methods.

Zhang and Block demonstrated that these response surface methods can optimize problems with > 20 variables in less than half the number of experiments as traditional DOE. In the previous chapter, this author further improved the robustness of this algorithm by using a hybrid optimization scheme validated on simulated design problems . Here we employ this novel nonlinear experimental design algorithm to optimize the proliferation of C2C12 cells while simultaneously reducing media cost by modeling the response surface of culture conditions using an RBF with a hybridized global/local optimization scheme. We then compare this approach to a more traditional DOE method. The organization of this article is as follows: Section 3.2 includes an outline of the experimental and computational methods use in media optimization, Section 3.3 goes over the results and Section 3.4 details a discussion of the results and current challenges.Using the trained RBF model, the two arms of our algorithm, TGA and DYCORS, each suggest five experimental conditions for a total of 10 experiments per batch within the design space [×1/2, ×2] of the GM that optimize α. Because the model is based on a small amount of noisy data, the genetic algorithm is stopped before it can converge to implicitly consider model and experimental uncertainty. The DYCORS arm of the algorithm searches in the region around the best design and picks the best predicted set of designs in that region,plant pot with drainage which expands and contracts based on the quality of previous experiments. The new experiments are conducted and the resulting data is used to correct and retrain the RBF model. To allow the RBF model to generalize better during early periods of optimization, 30 randomly selected experimental conditions were taken initially. The optimization loop was stopped when the α quality of the media showed a lack of improvement. The general framework for the HND is shown in Figure 3.1. As a control method, a traditional DOE was used to optimize the same media design problem in three steps. 

A ’Leave-One-Out’ experiment was conducted where a media composed of all components at their GM concentrations, excluding each individual component,were tested for their proliferation capacity using the %AB metric , similar to what was done in previous work. The lowest performing components had their concentrations fixed at their respective GM concentrations. Next a Folded/Un-Folded Plackett-Burman design was implemented with the remaining components at the upper and lower bounds of the design problem. This was done to determine the first order linear effects of each component on the objective function α. A linear model to predict α was used in conjunction with a LASSO algorithm to rank the most important first order effects, and all but the highest impact components were kept at their GM concentrations. Finally, the remaining components were used to design a Central Composite Design where experiments are spread out across the design space to more thoroughly explore potential optimal designs.The best α design from this DOE method was considered the optimal DOE design. The DOE-LOO step identified Ferric Nitrate, MgSO4, Glycine, L-Isoleucine, Choline Chloride, Riboflavin, and Thiamine HCl as components that, when left out of GM, had no statistical effect on %AB after 48 hr post-seeding . These components were set to their respective GM concentration for all subsequent DOE experiments. Next, the DOE-PB with LASSO identified the six most α-important components of the remaining 23 components . To reduce the number of experiments for the DOE-CCD design, LCystine and L-Serine were kept constant at × 1/2 normalized units above and below their GM midpoint concentrations respectively based on the sign of their coefficients . The remaining four components in the CCD had their upper/lower bounds changed to × 1/2 normalized units above and below their GM midpoints. The remaining components were varied in a CCD design, with the best medium being 200 mg/L KCl, 388 mg/L L-Glutamine, 9000 mg/L Glucose, 5% FBS shown in detail in Table 3.1. An 80% increase in α at 48 hr post-seeding over GM was measured using 50% less FBS than GM. For the HND optimization loop, α was used as the objective function and calculated using %AB measured at 48 hr post-seeding at 96 well plate scale . The RBF was initially trained with 30 randomly selected experiments. Figure 3.2 shows that the average HND designs improved in both α and %AB metric over time quickly overcoming standard GM and achieving similar results to the best DOE design with 70 experiments. We have included the proliferation metric in Figure 3.2 for completeness even though it was not used as the objective function α in this work. The HND was stopped at 70 experiments because both %AB and α stopped improving. The best medium found had an α measured to be 56% better than GM during the optimization loop using 32.5% less FBS than GM. Figure 3.3 shows the differences between the optimal media. For the most part the HND identified optimal concentrations that were slightly elevated compared to DOE, except for KCl, FBS, and Glucose. It is also notable that both HND and DOE determined that Glucose and FBS should be elevated and reduced in relative to GM. Figure 3.4 shows the media efficiency metric α plotted against the component concentrations for all experiments, demonstrating the nonlinear, interactive, and ultimately non-trivial nature of this experimental design optimization problem. These α-optimal HND and DOE designs were then tested against GM using %AB at 24, 48, and 72 h post-seeding , where the designed media have high %AB relative to GM but that advantage is reduced over time. As a further check, α was calculated using raw cell number normalized by the volume of FBS in each experiment where it was found HND and DOE again outperformed GM in terms of the objective function α due to their lower cost. However, both HND and DOE produced 8% and 9% fewer cells respectively, using 70 and 103 total experiments respectively. It is notable that, despite 30 components used, the HND was able to design a similar media to DOE with a similar degree of proliferation %AB and α in fewer experiments. Additionally, this DOE was more efficient than any single DOE, suggesting that the HND is much more efficient and simpler to use than the typical approach to high dimensional optimization. This is valuable in optimizing media due to the difficulty in collecting large amounts of data with many components. The reasons for the success of this method are likely the balance between global and local optimization, and the ability of the HBD to accumulate information using the RBF, which can regress on nonlinear, noisy, and interaction-heavy problems, reducing the need for cumbersome dimensionality-reduction experiments used in the traditional DOE. For the most part HND suggested higher concentrations of most media components than GM or DOE, except for KCl, FBS, and Glucose. This is likely because the DOE method utilized dimensionality reduction. That is, factors that demonstrated insignificant effects were fixed at their GM level and no longer included in the optimization. On the other hand, HND could vary components throughout the optimization process, including increasing component concentrations when they had even a small positive effect. Inclusion of a per component cost might dampen this effect. While the RBF can model nonlinear and interactive processes, the effect of each component on α is unclear without further experiments or model validation, a disadvantage of the HND approach. Nonetheless, sensitivity analysis using VARS was conducted and indicates FBS, Glucose, and MgSO4 likely have a significant effect on α, while other effects are more difficult to determine with the limited data available.

Although new facility construction or repurposing/ re-qualification may not immediately help with the current pandemic, given that only existing and qualified facilities will be used in the near term, it will position the industry for the rapid scale-up of countermeasures that may be applied over the next several years. An example is the April 2020 announcement by the Bill & Melinda Gates Foundation of its intention to fund “at-risk” development of vaccine manufacturing facilities to accommodate pandemic-relevant volumes of vaccines, before knowing which vaccines will succeed in clinical trials. Manufacturing at-risk with existing facilities is also being implemented on a global scale. The Serum Institute of India, the world’s largest vaccine manufacturer, is producing at-risk hundreds of millions of doses of the Oxford University COVID-19 vaccine, while the product is still undergoing clinical studies.12 Operation Warp Speed 13 in the United States is also an at-risk multi-agency program that aims to expand resources to deliver 300 million doses of safe and effective but “yet-to be-identified” vaccines for COVID-19 by January 2021, as part of a broader strategy to accelerate the development, manufacturing,pot with drainage holes and distribution of COVID-19 countermeasures, including vaccines, therapeutics, and diagnostics. The program had access to US$10 billion initially and can be readily expanded. As of August 2020, OWS had invested more than US$8 billion in various companies to accelerate manufacturing, clinical evaluation, and enhanced distribution channels for critical products.

For example, over a period of approximately 6 months, OWS helped to accelerate development, clinical evaluation , and at-risk manufacturing of two mRNA based COVID-19 vaccines, with at least three more vaccines heading into advanced clinical development and large-scale manufacturing by September/October 2020.At the time of writing, no PMP companies had received support from OWS. However, in March 2020, Medicago received CAD$7 million from the Government of Quebec and part of the Government of Canada CAD$192 million investment in expansion programs , both of which were applied to PMP vaccine and antibody programs within the company.15Once manufactured, PMP products must pass quality criteria meeting a defined specification before they reach the clinic. These criteria apply to properties such as identity, uniformity, batch-to-batch consistency, potency, purity, stability , residual DNA, absence of vector, low levels of plant metabolites such as pyridine alkaloids, and other criteria as specified in guidance documents . Host and process-related impurities in PMPs, such as residual HCP, residual vector, pyridine alkaloids from solanaceous hosts , phenolics, heavy metals , and other impurities that could introduce a health risk to consumers, have been successfully managed by upstream process controls and/or state-of-the-art purification methods and have not impeded the development of PMP products . The theoretical risk posed by non-mammalian glycans, once seen as the Achilles heel of PMPs, has not materialized in practice. Plant-derived vaccine antigens carrying plant-type glycans have not induced adverse events in clinical studies, where immune responses were directed primarily to the polypeptide portion of glycoproteins . One solution for products intended for systemic administration, where glycan differences could introduce a pharmacokinetic and/or safety risk , is the engineering of plant hosts to express glycoproteins with mammalian-compatible glycan structures .

For example, ZMapp was manufactured using the transgenic N. benthamiana line ΔXT/FT, expressing RNA interference constructs to knock down the expression of the enzymes XylT and FucT responsible for plant-specific glycans, as a chassis for transient expression of the mAbs . In addition to meeting molecular identity and physicochemical quality attributes, PMP products must also be safe for use at the doses intended and efficacious in model systems in vitro, in vivo, and ex vivo, following the guidance documents listed above. Once proven efficacious and safe in clinical studies, successful biologic candidates can be approved via a BLA in the United States and a new marketing authorization in the EU.In emergency situations, diagnostic reagents, vaccine antigens, and prophylactic and therapeutic proteins may be deployed prior to normal marketing authorization via fast-track procedures such as the FDA’s emergency use authorization .16 This applies to products approved for marketing in other indications that may be effective in a new emergency indication , and new products that may have preclinical data but little or no clinical safety and efficacy data. Such pathways enable controlled emergency administration of a novel product to patients simultaneously with traditional regulatory procedures required for subsequent marketing approval. In the United States, the FDA has granted EUAs for several diagnostic devices, personal protective devices, and certain other medical devices, and continuously monitors EUAs for drugs. For example, the EUA for chloroquine and hydroxychloroquine to treat COVID-19 patients was short-lived, whereas remdesivir remains under EUA evaluation for severe COVID-19 cases. The mRNA-based SARS-CoV-2 vaccines currently undergoing Phase III clinical evaluation by Pfizer/BioNTech and Moderna/ NIAID, and other vaccines reaching advanced stages of development, are prime candidates for rapid deployment via the EUA process. No PMPs have yet been granted EUA, but plant-made antibodies and other prophylactic and therapeutic APIs may be evaluated and deployed via this route. One example of such a PMP candidate is griffithsin, a broad-spectrum antiviral lectin that could be administered as a prophylactic and/or therapeutic for viral infections, as discussed later.

The FDA’s EUA is a temporary authorization subject to constant review and can be rescinded or extended at any time based on empirical results and the overall emergency environment. Similarly, the EU has granted conditional marketing authorisation to rapidly deploy drugs such as remdesivir for COVID-19 in parallel with the standard marketing approval process for the new indication.The regulations commonly known as the animal rule 17 allow for the approval of drugs and licensure of biologic products when human efficacy studies are not ethical and field trials to study the effectiveness of drugs or biologic products are not feasible. The animal rule is intended for drugs and biologics developed to reduce or prevent serious or life-threatening conditions caused by exposure to lethal or permanently disabling toxic chemical, biological, radiological, or nuclear substances. Under the animal rule, efficacy is established based on adequate and well-controlled studies in animal models of the human disease or condition of interest,large pot with drainage and safety is evaluated under the pre-existing requirements for drugs and biologic products.As an example, the plant-derived mAb cocktail ZMapp for Ebola virus disease, manufactured by Kentucky Bioprocessing for Mapp Biopharmaceutical 18 and other partners, and deployed during the Ebola outbreak in West Africa in 2014, was evaluated only in primates infected with the Congolese variant of the virus , with no randomized controlled clinical trial before administration to infected patients under a compassionate use protocol . Although the fast-track and streamlined review and authorization procedures described above can reduce time-to-deployment and time-to-approval for new or repurposed products, current clinical studies to demonstrate safety and efficacy generally follow traditional sequential designs. Products are licensed or approved for marketing based on statistically significant performance differences compared to controls, including placebo or standards of care, typically generated in large Phase III pivotal trials. One controversial proposal, described in a draft WHO report , is to accelerate the assessment of safety and efficacy for emergency vaccines by administering the medical intervention with deliberate exposure of subjects to the threat agent in a challenge study.

Although the focus of the WHO draft report was on vaccines, the concept could conceivably be extended to non-vaccine prophylactics and therapeutics. Results could be generated quickly as the proportion of treated and control subjects would be known, as would the times of infection and challenge. Challenge studies in humans, also known as controlled human infection models or controlled human infection studies , are fraught with ethical challenges but have already been used to assess vaccines for cholera, malaria, and typhoid . The dilemma for a pathogen like SARS-CoV-2 is that there is no rescue medication yet available for those who might contract the disease during the challenge, as there was for the other diseases, putting either study participants or emergency staff at risk .In the EU, the current regulatory environment is a substantial barrier to the rapid expansion of PMP resources to accelerate the approval and deployment of products and reagents at relevant scales in emergency situations. A recent survey of the opinions of key stakeholders in two EU Horizon 2020 programs , discussing the barriers and facilitators of PMPs and new plant breeding techniques in Europe, indicated that the current regulatory environment was seen as one of the main barriers to the further development and scale-up of PMP programs . In contrast, regulations have not presented a major barrier to PMP development in the United States or Canada, other than the lengthy timescales required for regulatory review and product approval in normal times. Realizing current national and global needs, regulatory agencies in the United States, Canada, the EU, and the United Kingdom have drastically reduced the timelines for product review, conditional approval, and deployment. In turn, the multiple unmet needs for rapidly available medical interventions have created opportunities for PMP companies to address such needs with gene expression tools and manufacturing resources that they already possess. This has enabled the ultra-rapid translation of product concepts to clinical development in record times – weeks to months instead of months to years – in keeping with other high-performance bio-manufacturing platforms. The current pandemic situation, plus the tangible possibility of global recurrences of similar threats, may provide an impetus for new investments in PMPs for the development and deployment of products that are urgently needed.An effective vaccine is the best long-term solution to COVID-19 and other pandemics. Worldwide, governments are trying to expedite the process of vaccine development by investing in research, testing, production, and distribution programs, and streamlining regulatory requirements to facilitate product approval and deployment and are doing so with highly aggressive timelines . A key question that has societal implications beyond vaccine development is whether the antibody response to SARS-CoV-2 will confer immunity against re-infection and, if so, for how long? Will humans who recover from this infection be protected against a future exposure to the same virus months or years later? Knowing the duration of the antibody response to SARS-CoV-2 vaccines will also help to determine whether, and how often, booster immunizations will be needed if the initial response exceeds the protection threshold . It is clear that some candidate vaccines will have low efficacy , some vaccines will have high efficacy , and some will decline over time and will need booster doses. An updated list of the vaccines in development can be found in the WHO draft landscape of COVID-19 candidate vaccines.As of August 2020, among the ~25 COVID vaccines in advanced development, five had entered Phase III clinical studies, led by Moderna/NIAID, Oxford University/Astra Zeneca, Pfizer/ BioNTech, Sinopharm, and Sinova Biotech.20 Most of these candidates are intended to induce antibody responses that neutralize SARS-CoV-2, thereby preventing the virus from entering target cells and infecting the host. In some cases, the vaccines may also induce antibody and/or cellular immune responses that eliminate infected cells, thereby limiting the replication of the virus within the infected host . The induction of neutralizing antibodies directed against the SARS-CoV-2 spike glycoprotein is considered a priority. The immunogens used to elicit neutralizing antibodies are various forms of the S protein, including the isolated receptor-binding domain . The S protein variants can be expressed in vivo from DNA or mRNA constructs or recombinant adenovirus or vaccinia virus vectors, among others. Alternatively, they can be delivered directly as recombinant proteins with or without an adjuvant or as a constituent of a killed virus vaccine . Many of these approaches are included among the hundreds of vaccine candidates now at the pre-clinical and animal model stages of development. Antibody responses in COVID-19 patients vary greatly. Nearly all infected people develop IgM, IgG, and IgA antibodies against the SARS-CoV-2 nucleocapsid and S proteins 1–2 weeks after symptoms become apparent, and the antibody titers remain elevated for at least several weeks after the virus is no longer detected in the convalescent patient . The nature and longevity of the antibody response to coronaviruses are relevant to the potency and duration of vaccine-induced immunity. By far the most immunogenic vaccine candidates for antibody responses are recombinant proteins .

Trenberth et al. indicate that annual precipitation has decreased in the southwestern United States for the period 1901–2005. Consistent with scientific theory, empirical research suggests that warmer climates, such as those projected for the Southwest, will lead to more extreme precipitation intensity and frequency , particularly during the winter season . Since annual precipitation is projected to decline , more extreme events do not translate into higher total rainfall for a given year. Instead, it is projected that light precipitation — an important source for soil moisture and groundwater recharge — will concomitantly decline. Between 1901 and 2010, the areal extent of drought increased in the southwestern United State . Some have attributed the increasing expanse of drought, particularly in the previous decade, to warmer temperatures . Others have suggested that it is due to changes in atmospheric circulation . In addition to temperature and precipitation, CO2 fertilization is another climate change pathway affecting agriculture. Increased atmospheric carbon dioxide stimulates photosynthesis, leading to increased plant productivity and decreased water and nutrient use . Benefits from elevated CO2 concentrations depend upon plant type and irrigation level. C3 photosynthetic plants will benefit more than C4 plants , and dry land cropping systems will benefit more than irrigated systems . The extent to which CO2 fertilization mitigates climate-induced water scarcity in the field still lacks scientific consensus,round plastic plant pot and there is debate on the extent to which simulating CO2 effects actually reproduces the results in free air carbon dioxide enrichment experiments .

Assessments of crop impacts due to climatic change fall under two, broad categories: process-based and statistical models. Process-based models simulate physiological development, growth and yield of a crop on the basis of interaction between environmental variables and plant physiological processes . Statistical crop models impute a relationship between historic crop yield and climate variables, often in order to project the impact on yield under future climate scenarios. Process-based models remain the gold standard in crop modeling as one is able to study the relationship between weather and all phases of crop growth in a range of weather possibilities, even those lying outside the historical record . California field crops have been modeled using DAYCENT . Both studies highlight resilience of alfalfa yield under A2 scenario by end of the century, whereas 5 other crops exhibit a decline. Jackson et al. also find alfalfa yield to be particularly resilient to early and repeated heat waves during May–July. Lee et al. also run climate projections with and without a CO2 fertilization effect on seven field crops in the Central Valley of California. They assume a CO2 increase of 350 ppmv from 1990 levels enhances net primary production by 10% for all crops except alfalfa and maize. They find that CO2 fertilization increases crop yields 2–16% above the model without CO2 effects under the high-emissions scenario by the end of the 21st century. There is a much smaller yield increase under the low-emissions scenario. Lobell and Field use two estimation methods in studying the effects of temperature and precipitation on perennial crop yields. Their model includes 72 potential weather predictor variables for each crop, such as monthly averages for max and min temperature and their corresponding squares. They find that cherries and almonds are harmed by future warming out of a set of 20 perennial crops in their analysis. Crop-level adaptations — such as adjusting the planting and harvesting date , and substituting between different crop varieties — have been included to a limited extent in crop models. However, these cannot account for the broad range of decision making at the farm-level under which many of the negative effects of climate change could be partially offset with input and output substitutions, improving information, and effective water institutions. Thus, economic models are necessary to capture a broader range of responsive decision-making as the climate changes.

Recently, adaptations specific to California agriculture have been studied using three economic programming models: the Statewide Agricultural Production model, Central Valley Production Model , and the US Agricultural Resources Model . Capturing the decision-making process is an important part of modeling. In programming models, the farmer’s decision is captured by the objective function. The main decision variable in these models is acres of land allocated to a region-specific crop mix. The farmer responds to reductions in water availability and yield by adjusting crop acreage. Exogenous adaptations include institutional , socioeconomic , and technological change . Calibration through positive mathematical programming also captures decision-making by preserving observed crop mix allocation decisions . SWAP employs a PMP cost function to the capture the decision of bringing an additional unit of land into production . Both CVPM and USARM have also been calibrated using PMP . CVPM studies have also generated synthetic crop share data from Monte Carlo runs using a base water supply and groundwater depth with random perturbations. Crop adaptation equations are then derived from a multi-nomial logit regression of this CVPM-generated synthetic crop share data . In order to represent climate-induced changes in water supply, many mathematical programming models are linked to hydrological management models, such as the California Value Integrated Network , Water Evaluation and Planning , CalSim-II, and C2VSim. CALVIN is a generalized network flow-based optimization model that minimizes economic operating and scarcity costs of water supply, subject to water balance, capacity, and environmental constraints for a range of operational and hydrologic conditions . CALVIN has the potential to incorporate several basin-level adaptations to water allocation rules such as contract changes, markets and exchanges, water rights, pricing, and water scarcity levels.

However, it has limited ability to represent important physical phenomena, such as stream-aquifer interactions and groundwater flow dynamics under different climate and water management scenarios . WEAP has many of the same water management features as CALVIN and CalSim-II. WEAP includes demand priorities and supply preferences in a linear programming framework to solve the water allocation problem as an alternative to multi-criteria weighting or rule-based logic. It is different because analysis in the WEAP framework comes directly from the future climate scenarios and not from a perturbation of historical hydrology as with the other models. Unlike CALVIN and CalSim-II, WEAP only has a simplified representation of the rules guiding the State Water Project and Central Valley Project systems . CalSim-II is also very similar to CALVIN and WEAP . C2VSim is a multi-layer,25 liter round pot distributed integrated hydrologic model that could represent pumping from multiple aquifer layers, effects on groundwater flow dynamics, and stream-aquifer interaction . Recent programming studies focus on how certain adaptations may affect costs under relatively extreme cases of water scarcity. These studies thus assess how these adaptations may offset costs under worst-case-scenarios of water supply reductions. Given that reduction in statewide agricultural water use due to the current drought is estimated at 6% , studies on 40–70% flow reduction should be interpreted with caution. The subsequent studies are organized according to magnitude of water supply/flow reduction. Studies on 5–6% reduction in water supply reveal the heavy fallowing and groundwater use . Howitt et al. find that a 6.6 maf deficit in surface water caused by the current drought is largely substituted by 5.1 maf of additional groundwater. This is estimated to cost an additional $454 million in pumping. In addition to over-pumping groundwater, farmers adjust by fallowing crop land. The overwhelming majority of the 428,000 acres estimated fallowed in 2014 are in the Central Valley, where the majority of fallowed acres belong to field crops. However, they project that fallowing will decrease by 43% by 2016, suggesting a trend toward stabilization. Frisvold and Konyar use USARM to examine the effects of a 5% reduction in irrigation water supply from the Colorado River on agricultural production in southern California. In particular, they are able to compare the potential value-added of additional adaptations that includechanging the crop mix, deficit irrigation, and input substitution to a “fallowing only” model. They find that these additional adaptations have the potential to reduce costs of water shortages to producers by 66% compared to the “fallowing only” model.1 Medellin-Azuara et al. examine the extent to which more flexible2 versions of California water markets could reduce water scarcity costs under a 27% statewide reduction in annual stream flow. They compare agricultural water scarcity in the year 2050 under two scenarios: 1. Baseline: population growth and resulting levels of agriculture to urban land transfer.

Warm-dry: includes population pressure and climatic changes under GFDL CM2.1 A2). Under the warm-dry scenario, even with optimized operations, water scarcity and total operational costs increase by $490 million/year, and statewide agricultural water scarcity increases by 22%. If water markets are restricted to operate only within the four CALVIN sub-regions, statewide water scarcity costs increase by 45% and 70% for the baseline and warm-dry scenarios, respectively. Marginal opportunity costs of environmental flows increase under the warm-dry scenario, with particularly large percentage increases for the Delta Outflow and American River. Medellin-Azuara et al. conduct a similar analysis, adding the comparison with a warm-only 2050 scenario. The agricultural sector water scarcity costs rise by 3% from the baseline to warm-only scenario, versus an increase of 302% from the baseline to the warm-dry scenario.3 Indeed the greater hydrological impact of the warm-dry scenario results in significantly greater scarcity costs than the warm-only scenario. Using the CALVIN model runs from Medellin-Azuara et al. , MedellinAzuara et al. analyze adaptations at the farm-level, including adjustments in crop acreage , and to a more limited extent, yield-enhancing technology . Similar to the 2008 paper, the model compares economic losses between a baseline scenario and a warm-dry scenario . Results reveal an anticipated decline in acreage of low-value crops , which is particularly severe due to the large reduction in water availability. For example, pasture acreage is reduced by 90% across 3 out of 4 agricultural regions. The results also suggest that statewide agricultural revenues decline at a proportionately lower level than the reduction in water availability . Their model also captures the complexity between crop demand and climate-induced supply reduction. Although the demand for high-valued orchard crop increases, production decreases due to the negative impact on yield from temperature increases.The resulting price increase cannot compensate for the decrease in supply, and gross revenue still declines. Two studies examine the impacts of more extreme reductions in water supply . Harou et al. construct a synthetic drought in 2020 based on the paleo-record, rather than GCM projections. Their results regarding agricultural water scarcity and environmental flows are consistent with other CALVIN-SWAP studies. Environmental flows are also extremely restricted. Marginal opportunity costs of environmental flows rise by one or more orders of magnitude with extreme drought as compared to the historic baseline, with the Trinity, Clear Creek, and Sacramento Rivers experiencing the highest increase. Average agricultural water scarcity increases 3900% across the entire state under extreme drought even under well-functioning water markets, which seems somewhat implausible and may result from an overly restrictive model. Although Dale et al. do not calculate scarcity costs, they find that a 60-year drought with 70% reduction in surface flows only moderately impacts the total amount of irrigated acreage in the Central Valley, which declines from 2.4 million hectares to 2.1 million. This suggests that Central Valley farmers tend to have a relatively inelastic groundwater demand, compensating for the loss in surface water with groundwater rather than fallowing. Within the Valley, they find that Tulare Basin has a greater increase in fallowing than the San Joaquin Basin since the former is historically more dependent on groundwater. Dale et al. are also able to capture the increase in aquifer subsidence due to increased withdrawals during the prolonged drought, suggesting that the quality of the aquifer will decline through time with excessive pumping. Joyce et al. use WEAP-CVPM to model climatic changes with 6 GCMs under B1 and A2 scenarios for 2006–2099. Unlike the CALVIN-SWAP studies, they model irrigation efficiency by assuming that vegetable and fruit and nut crops in the Central Valley will be entirely converted to drip irrigation, and half of field crops will be converted by mid-century. They find that these adaptations tend to offset increasing water demands caused by increasing temperatures and periods of drought.

Essentially, a direct income payment from the government could weaken, if not break, the relationship between farmers and the JA because farmers would be paid independent of production and would thus be less dependent on JA services. Finally, and perhaps most importantly, the DPJ could not overcome the opposition of the farmers, and the JA more broadly, to the DPJ’s position in support of the Trans-Pacific Partnership, aiming to reduce trade barriers. Farmers, protected by high tariff barriers, feared that an influx of low-priced agricultural goods would follow the adoption of the TPP. The JA stated an official position of opposition to the TPP and those who supported it, no matter their party affiliation. In the 2012 election, the JA published a list of the 177 candidates it endorsed, 162 of which were from the LDP. Of the 177 officially endorsed, 173 were elected . As these examples demonstrate, my framework for studying agricultural policy making and reform can provide help provide a fuller understanding of decision making in domains outside of Europe. Japanese farmers have repeatedly shown the ability to defend preferred policies, defeat unwanted reforms, and even silence those who advocate economic liberalization, whether a powerful political party or a major industry. As in Europe, it is difficult if not impossible to take support away from farmers or even to challenge their policy preferences.This third and final mini case tests the applicability of my argument to cases that involve agricultural interests but are not agricultural policy proper. Additionally, this mini case tests my argument beyond the European/EU context.

Decision making occurs at the supranational level, and, beginning with the 1986 Uruguay Round,25 liter plant pot agricultural interests are just one set of voices within a much broader set of voices. Essentially, in the case of world trade after 1986, agriculture cannot simply sort out its own situation in isolation, excluding all other interests. Because these negotiations are supranational, like CAP negotiations, farmer organizations and their influence are predominantly mediated through national representatives to the GATT meetings. Essentially, the task of this mini-case is to demonstrate that the major claims of my argument still hold under the conditions outlined above. When GATT was created in 1948, agriculture received special treatment. It was thought that agricultural interests were so powerful and agriculture such a touchy national subject that its inclusion would render any negotiations dead in the water. So unlike manufacturing sectors, agriculture was exempted from the prohibition on the use of both quantitative import restrictions and export subsidies. In addition, agriculture was left out of the first three rounds of multilateral trade talks in the GATT in order to assure successful negotiations. As a result of agriculture’s special treatment and its absence from GATT negotiations, domestic agricultural programs were allowed to develop unchecked. The resulting agricultural surpluses were one of the major factors that pushed agriculture to be fully included in GATT multilateral negotiations despite major concerns over the dilatory effects of powerful farming interests and the objections that would certainly be raised by negotiating parties in defense of their particular agricultural profile. The centerpiece of the GATT Uruguay Round negotiations was the section on agriculture. The GATT UR was launched in 1986 and was supposed to be concluded by 1990. Due to delays on the agricultural section of the negotiations, an agreement was not reached until 1993, almost doubling the length of the GATT UR. The declaration launching the Uruguay Round identified greater liberalization in agricultural trade as the fundamental goal of the round.

Particular attention was to be paid to domestic support, market access, and export subsidies . The specific goals for agriculture were to reduce import barriers, to order to improve market access, and to restrict the use of direct and indirect subsidies in order to improve the competitive environment. US Trade Representative Clayton Yeutter insisted on the inclusion of policies relating to domestic support over the strong objection of some EC member states, most notably France. In short, in the GATT UR, reformers wanted to remove protectionist trade barriers and dramatically cut, if not completely eliminate, subsidies for agriculture, including those designed to boost farmer incomes. In a major break from previous GATT negotiations, the UR was to be treated as a “single undertaking” . In other words, the round could not be concluded without an agreement on agriculture. By contrast, the Tokyo Round was described as “GATT à la carte” because contracting parties could decide which agreements they did and did not want to sign . This change was made in an effort to finally force an agreement on agriculture. In all previous rounds, agriculture was either excluded entirely or treated under special, separate rules. For France, which was reluctant to include agriculture in the UR negotiations, the condition was particularly important because it “represented the potential for offsetting gains in other sectors: to rebalance trade with Japan and to ensure the newly industrializing countries, particularly in Asia, met in full their obligations under the GATT” . In practice, the single undertaking condition permitted agriculture to cause extensive delays in the negotiations, repeatedly proving to be the issue that blocked everything. Negotiations at the Uruguay Round took place over seven years. Throughout the talks, the US and EC advanced radically different negotiating positions. An inability to reach an agreement on agriculture resulted in the collapse of the round, and the original deadline for an agreement, 1990, was missed. Talks were revived by GATT Director General Arthur Dunkel and ultimately concluded in 1993 with an agreement that was dramatically watered down from the initial GATT UR objectives and was ultimately quite favorable to farmers. In the end, farmer income payments, which GATT officials sought to eliminate or at least restrict, were entirely preserved and the dismantling of tariff barriers was delayed or restricted such that most farmers felt little to no effect from these changes.

The Uruguay Round negotiations were driven by the sharply divergent positions of the United States and the European Community, supported by the Cairns Group43 and Japan, respectively. The US saw government support as the root of trouble in farm trade while the EC blamed the market. Specifically, the US called for dramatic liberalization, primarily by reducing the protection and support afforded to European farmers under the CAP. The EC, however, argued that that the aim of negotiations should be to “progressively reduce support to the extent necessary to reestablish balanced markets and a more market oriented agricultural trading system” but not to phase out support and protection . The US plan was highly aggressive and market oriented. Dubbed the “Zero Option”, it called for the complete elimination of farmer programs, described as “all forms of support which distort trade” within ten years . Export subsidies, which were considered by US negotiators to be the most trade distorting, were to be reduced by 90% in five years. In addition, no commodity or support program would be exempt from reform. However, programs, such as decoupled payments, which were not tied to output and thus were arguably not trade distorting, would remain untouched. In launching the Zero Option, US officials believed that American farmers would accept the subsidy reductions because foreign farmers would be subjected to the same pains at the same time. US farmers, however,black plastic plant pots preferred to avoid rather than share pain, and feared that any GATT reform would impose costs upon them. GATT negotiations came on the heels of two major failed attempts by the Reagan administration, in 1981 and 1985, to get Congress to reduce the levels of support for US farmers. Reagan administration officials viewed the GATT negotiations as an opportunity to use international negotiations to achieve domestic reform. Farmers had defeated these retrenchment efforts at home, so the Reagan administration sought to attempt to retrench agriculture in the context of international trade, which could potentially undercut the power of the American farmers.The EC flatly rejected the US proposal calling the plan “unrealistic”. It was, at its core, a thinly veiled attack on the CAP, a policy with which the US was becoming increasingly frustrated. The EC countered with a more modest proposal where reductions in support levels would occur only after measures were adopted to stabilize world prices. In the first stage, the most seriously imbalanced markets, cereals, sugars, and dairy products, would be stabilized. In what is likely not a coincidence, these commodities were also those in which the EC had massive surpluses. In the second stage, commodity supports would be reduced gradually by up to 30% over a period of ten years, with reductions calculated using 1986 as the base year. Overall, compared to the US, the EC fundamentally sought to maintain the agricultural status quo. Japan’s position was largely defensive and was grounded in a desire to make as few concessions as possible in negotiations . Of fundamental importance was to prevent or delay tariffication to the extent possible, specifically for rice, which is a hallowed product in Japan. Indeed, Japanese negotiators were willing to permit imports and increased tariffication in all other agricultural commodities so long as rice remained exempt from tariffication and import rules.

Japan’s existing agricultural policy and support system allowed them to support their farmers through a system of high prices made possible by a system of tariffs and isolation from the international market . By resisting tariffication, or gaining exemptions for the most important sectors, namely rice, Japan could avoid the situation that the EU found itself in, where domestic policy had to be reformed to make a final agreement possible. Japan’s objectives were shaped primarily by the special position of rice producers and also by the overall high level of protection of agriculture. In addition to a desire to avoid a ban on agricultural import quotas, the Japanese position emphasized the importance of “non-economic” objectives of food farm policy, including “food security, rural employment, and environmental protection” . In regards to the two major policy positions, that of the US and the EC, the Japanese supported the EC and flatly rejected the US position as impractical . After observing the EC and Japanese negotiators’ vehement rejection of the Zero Option proposal, the US farm lobby, including numerous commodity groups, realized they could use this opposition to their own benefit. Knowing that the EC and Japan would never accept the Zero Option, US farm lobbies began to support the plan in hopes that it would deadlock the negotiations. If the negotiations remained at an impasse, then American farmers would also continue to benefit from the subsidies, tariff barriers, and general support programs that the “Zero Option” plan sought to eliminate. Many US farm lobbies were quite aggressive, insisting that “they could accept nothing less than the Zero Option”, that “half measures would not do— no agreement was better than a bad agreement” and that the Zero Option was “the only way to guarantee a level playing field against their subsidized foreign competitors” . The US farmers’ manipulation of the Zero Option extended into the GATT Mid-Term Review , which took place in 1988. US farm groups, led by the highly subsidized sugar and dairy sectors, successfully lobbied Secretary of Agriculture Richard Lyng to “force Yeutter to stick to the Zero Option in Montreal” resulting in a stalemate at the MTR . Yeutter had, in the months leading up to the Uruguay Round’s MTR, expressed a willingness to accept partial reforms. In order to best protect their policy preferences, however, the American farmers pressured the US government to hold the line on a policy they knew would never be accepted by Europe. Like their European counterparts, American farmers rely on the power of their sophisticated organizations to advance and defend their policy preferences.Negotiations also floundered because the EC and Japan were losing interest in reform. In the case of the EC, the need for agricultural policy reform to bring spending costs under control was achieved when the EC reached an agreement in 1988 on two measures that brought about temporary budget relief: a stabilizer for cereal subsidies and a 25% increase in Community revenue. In Japan, it was electoral politics, not reform, that dampened the desire to negotiate.

The finding also holds true for spending reduction, even under conditions of budgetary crisis. Third, this case highlights two tactics commonly employed by reformers seeking to retrench the welfare state: 1) introducing reforms that correct programs functioning inefficiently or unfairly and 2) corralling support for the reforms by simply buying off member states or by offering special policy exemptions and alternatives to those who are opposed to particular aspects of the reform package. The biggest achievement of the MTR, the introduction of an income support system that was not based on production, was achieved by constructing the reform around correcting an existing program that was inefficient and unfair rather than trying to get member states to agree to completely abandon the old system and support an entirely new policy. The old direct payment program was inefficient, environmentally destructive, and expensive. It incentivized farmers to produce as much as they possibly could no matter the cost to the environment and then stuck the EU with the bill for storage and dumping of surplus product. The old program was also unequal. Because payment was based on output, a small percentage of farmers received the majority of CAP payments. Moreover, those farmers who received the most payments were also those who were already internationally competitive and did not need CAP support. By ceasing to pay farmers based on how much they produced, the new income support system corrected the inefficiencies of the old program, eliminating incentives that encouraged environmentally damaging and wasteful over production,growing strawberries vertically and made progress toward a more egalitarian system of support payments.

The MTR saved the CAP budget and strengthened the position of the EU in the Doha Round of WTO negotiations. Full decoupling and a transition to area-based payments prevented the CAP budget from ballooning out of control once the ten new member states from Central and Eastern Europe joined the EU. The reform of the income support system also put the EU in compliance with WTO subsidy rules. By completing these reforms in advance of the Doha Round, the EU avoided a repeat of the GATT Uruguay Round when EU officials had to negotiate a trade deal under the burden of an agricultural support system that violated existing rules. Even with the extraordinary circumstances that opened the political ground for more reform, the costs of marshaling the support necessary to enact change were high. While the SFP was a dramatic change in how farmers were paid and marked a stronger commitment to the greening components of the CAP, this reform had little effect on the total amount of support received by farmers. For example, the proposal to cap the total amount of annual support any individual farmer could receive at €300,000 was defeated. Some version of this initiative has been put forward by agricultural commissioners since at least the 1980s and has been defeated in every round of reform. Even when conditions were ripe for major change, a pet policy of agricultural commissioners failed. Even in the best conditions, it is difficult if not impossible to retrench farmer support. These reforms to the payment system neither significantly affected the total level of support received by farmers nor resulted in much change in allocation of support between countries and across farmers . Under the Fischler reforms, inefficient farmers benefited from the decoupling of support from production; they would now be paid no matter how much they produced. While large and highly efficient farmers would no longer be able to drive up their support payments through efforts to produce as much as possible, they successfully avoided a limit being placed on their overall annual income payments. This victory was especially important for those farmers with the largest holdings.

Historic yield based payments meant that these farmers still stood to earn a hefty payment, and with the proposal to limit total CAP support defeated, those payments would not be garnished. Finally, while all farmers earning above the €5,000 threshold lost some money directly though modulation, these funds stayed almost entirely in their own member state’s rural development program, and could be channeled back to the farmers though other programs and initiatives. Ultimately, offering exemptions, exceptions, and monetary incentives was a crucial component in successfully concluding the reform negotiations. In order to wrangle the cooperation of farmers who were leery of the effects of new programs, including the costs and burdens imposed by newly adopted environmental standards, reformers repeatedly relented, offering them monetary compensation for compliance and lowering expectations for meeting environmental standards. The next chapter of my dissertation examines the most recent reform of the Common Agricultural Policy, agreed to in 2013. This reform, which established the framework of the CAP until 2020, is more similar to that of Agenda 2000 than the Fischler or MacSharry reforms. With no major outside pressures or crises, CAP reform reverted to politics as usual, and little change was made.As part of the Europe 2020 strategy, the 2013 CAP reform sought to make big changes to the CAP, bringing it in line with the modern, dynamic, and innovative European Union that the Commission envisioned. These reforms endeavored to address long-standing complaints that the CAP was too complex, unfair, and environmentally destructive. To that end, the oft-repeated mantra by CAP reformers was that they desired a CAP that was fairer, simpler, and greener. In reality, the 2013 CAP reform fell well short of these objectives. It made some progress on improving fairness, but also made the CAP far more complex and did little to improve environmental standards.

A major factor in explaining the limited changes that resulted from this CAP reform is that, other than the need to continue adjusting the CAP to operate in the enlarged European Union, there were no exogenous forces pushing for reform. Both MacSharry in 1992 and Fischler in 2003 used pressing concurrent challenges, such as stalled trade negotiations, to achieve major change. The same option to tie CAP reform to crises and/or concurrent problems was largely unavailable to Agricultural Commissioner Daclan Cioloș in 2013. The budget was not in crisis and the EU was not involved in any WTO negotiations. Enlargement was the one geo-political pressure that affected the 2013 reform. While enlargement to Eastern Europe had been concluded, the consequences for the CAP still required some management. The main issue lingering from the most recent enlargement was the imbalance of payments across countries. This issue proved to be the only source of disruptive politics,drainage planter pot providing Cioloș an opportunity to call for changes to the direct payment system. Indeed, the only major component of the final reform would be the provision that addressed the fallout from enlargement. The purpose of this chapter is to account for the content of the 2013 CAP reform and to explain why the reform was so underwhelming. Cioloș had a very limited mandate for reform, given that he was operating largely under politics as usual. In addition, the new CAP reform was being sorted out at the same time as the 2014-2020 Multi-annual Financial Framework . In addition, it undercut the ability of reformers to call for spending cuts or to use the threat of them to leverage reform because once the budget had been set, spending cuts were off the table. The result was a watered down reform, with changes much more circumscribed than initially proposed or abandoned entirely. The final agreement contained two main components. The first and most significant change involved the direct payment system. In order to address vast inequality in the payments received by Western and Eastern farmers, all member states would transition, over a 7-year period, to using the same system for calculating the amount of direct payments owed to their farmers. The program for this transition was ultimately made much more gradual and included far less redistribution than initially proposed. In addition, a proposal to cap income payments was rejected. Greening was the second component of the agreement. While new rules for permanent pasture, mandatory crop rotation, and other measures intended to protect and improve the environment were adopted, they ultimately had very little applicability, with nearly of 88% of farmers exempted. Smaller components of the agreement allowed member states to have more flexibility in directing money towards rural development and modified rules on who counted as a farmer, though the definition remained quite permissive. Once again CAP reform mirrored the process of welfare state retrenchment, with reformers employing a variety of tactics to slip through any reform and hopefully position themselves to achieve more substantial retrenchment in the future.

Nearly every proposal was significantly watered down, and some, like placing limits on the amount of money individual farmers received, were defeated outright. The core reforms, most notably changes to the direct payment system, followed a “vice into virtue logic”. The existing payment system was operating unequally. To address this problem, rather than creating a new program from scratch, reformers worked within the system, amending the method of calculating payments to decrease the gap between new and old member states. Finally, as is typical, the final package included a number of side-payments, concessions, and exemptions in order to facilitate the agreement. For example, greening measures designed to impose stricter environmental standards on a portion of a farmer’s land ended up including so many exemptions that only 12% of European farmers were ultimately subjected to the rules. In the end, this round of CAP reform amount to little more than tinkering around the edges. The 2013 CAP Reform illustrates the importance of disruptive politics for achieving meaningful CAP policy change. The only significant alteration to CAP policy in the 2013 reform was directly linked to the sole source of disruptive politics: enlargement. While no new rounds of accession were looming, the CAP confronted lingering problems from expansion to Eastern and Central Europe. Owing to different available methods for calculation and the rules governing the new member states’ accession to the CAP, the average payment per hectare in the old, Western member states was much higher than in the newer member states in Central and Eastern Europe. In 2013, the average payment per hectare across the EU was €269 . Farmers in Latvia, however, received on average €95 per hectare compared to €458 in the Netherlands . This inequality was politically unsustainable, with Central and Eastern European member states complaining about their second-class status. EU officials, specifically those outside of DGVI , had also taken notice and were increasingly critical of a policy that was badly out of step with the core EU value of equality among members. The other issues that had generated the disruptive politics in 1992 and 2003, economic crisis and stalled trade negotiations, did not drive reform in 2013. Europe did experience an economic crisis, but the crisis actually weakened the hand of reformers and budget cutters. The period immediately before and during CAP negotiations was marked by significant economic volatility. In 2008, agricultural prices peaked, then suddenly dropped as a consequence of the global economic crisis, which caused upheaval and uncertainty in government budgets and commodities markets. Concerns about falling prices increased the pressure on CAP policymakers to return to market intervention and regulation to help hard-hit farmers. In addition, the volatility in the markets induced calls to lessen or eliminate greening requirements so as to not overburden farmers and also to increase support for emergency relief. These proposals would require an increase in spending. Thus, instead of disrupting politics and providing Cioloș with an opening to call for change, the crisis buttressed politics as usual. Stalled trade talks, which were a key pressure for the MacSharry Reform, were not entirely absent from the 2013 CAP Reform. The difference between these two circumstances, however, was vast. At the time of the MacSharry Reforms, the GATT Uruguay Round was struggling to reach a conclusion. The problem was in the agricultural portion of the negotiations, with the design and operation of CAP programs preventing Europe and the United States from reaching an agreement. At the time of the 2013 CAP negotiations, the Doha Round was stalled. This time, however, the negotiations were failing in multiple sectors and agriculture, though one of the points of trouble, was not to blame for delaying the successful conclusion of the entire round.

Ultimately, Chirac was able to combine his agricultural expertise with a situation ripe for revision: a CAP agreement that was over budget, with no country willing to increase their contribution to the EU in order to close the gap. Chirac’s personal rewrite of the CAP agreement faced little resistance as he stood firm and the other major member states relented due to other considerations which France in turn did not oppose. The main changes imposed by Chirac included a smaller cut for grain prices, increased compensation for beef, and the extension of the milk quota regime by a further two years including an additional delay in price cuts. The UK was concerned with both protecting its rebate and, like Spain and the Southern countries, ensuring access to and increasing their share of cohesion funds. Chirac left Italy’s milk quota increase in the package, thereby ensuring their continued support for CAP reform. The biggest source of opposition should have come from Germany, but it was facing political crises domestically and also in its role in the rotating EU presidency. Schröder’s government was in disarray after finance minister Oskar Lafontaine’s abrupt resignation. At the EU-level, in its role in the rotating presidency, Germany was dealing with the crises in the Balkans, which had now escalated to a NATO bombing campaign and also with the stunning resignation of the entire European Commission, under pressure from the European Parliament . An independent investigation revealed widespread fraud, misconduct,vertical hydroponic farming mismanagement of financial systems, and suggested that “[the Commission] had lost control of the administration” of the EU 25.

A failure of the European Council to act decisively and to successfully conclude Agenda 2000 would be a major embarrassment for Germany and the entire European Union, which it was struggling to lead. With Germany politically weakened, the other major member states distracted by other priorities, and the EU struggling to appear decisive under the shadow of both an international and an institutional crisis, Chirac was able to amend Agenda 2000 to be more in line with his personal preferences after threatening to leave Berlin without concluding the negotiations. In the end, the overall reform was diluted even further largely by reducing the size of price cuts and delaying the timing of reform. This point is essential: the CAP budget was brought under control not by slashing farmer compensation, but by delaying cuts and reforms that would result in further market liberalization. Savings were generated not by reducing compensation packages but by delaying and/or reducing market reform. Price cuts were lowered from 20% to 15% for cereals and the delay of dairy reform was extended a further two years, until 2008. By making cereals cuts smaller than initially proposed and maintaining the dairy quota system the EU reduced and/or delayed the amount of money it would have to pay out as compensation in the form of direct payments. Instead, consumers would continue bear the cost of the price supports. Alternative solutions that would work within the budget, such as reducing the level of compensation or imposing payment ceilings, were rejected . The final agreement formally rejected both alternatives for budget stabilization though it did permit member states to apply modulation, if they so desired . In the end, all the key players left Agenda 2000 with their key interests protected: France avoided co-financing and protected the high levels of transfers it received from the CAP; Germany avoided further increasing its contribution to the CAP budget; the Southern countries protected their current level of structural funds ; and the UK protected the Thatcher rebate.

Overall, the cuts in the final agreement were smaller and took effect at a later date than in the initial proposal. Reducing the size of a proposed cut and/or delaying the time at which it will come into effect are strategies used by welfare state reforms. Reducing the size of a proposed cut is one way to buy off support for a reform while delaying the date of implementation allows the current policymakers to distance themselves from the negative consequences of the reforms they have adopted. The risk, of course, is that these reforms may never actually take place, as the delay affords future actors the opportunity to amend or entirely eliminate the reform before it takes place. Also similar to the process of welfare state retrenchment was the Commission’s use of targeted concessions, like increased milk quotas for some member states. Reform is achieved after support is bought from a key actor, in this case Italy, whose support was crucial to breaking the blocking minority on dairy reform. The Commission’s initial proposal was effectively watered down twice, once in order to reach a compromise in the Agricultural Council and a second time by French president Jacques Chirac at the Berlin Summit several weeks later. Chirac’s watering down of the proposal included reducing the price cut for grain from 20% to 15% and increasing the compensation paid to the beef sector. In addition, dairy reform, by way of finally removing the quotas, was delayed even further. The round of price cuts and compensation continued in the vein of the MacSharry Reform. Yet despite the cuts, EU prices for goods, particularly cereals, still remained well above world prices. As a result, the EU had to continue using export subsidies . The compensation specified in this reform was to be added on top of the compensatory payments already received under the MacSharry Reform.

While these cuts would allegedly help reduce the problem of surplus production by lowering price guarantees, the CAP still had yet to achieve the full decoupling of payments from production. Modulation was ultimately left up to the member states. If they desired,vertical gardening systems they could modulate payments to farmers for specific reasons such as, “below-average employment density, above-average profit level” or the total level of payments to the farm . The agreement required that any savings collected by the member states through this optional modulation had to be spent on rural development or environmental programs. Cross-compliance was adopted, but only as an optional measure. Member states that choose to impose cross-compliance on their farmers were also allowed to set their own environmental standards so long as they did not distort competition between the member states . While implementing cross-compliance in an optional, non-binding form with no universal environmental standards was a weak outcome, it did position the Commission well for future reform along the same lines. Moreover, it mirrored patterns observed in welfare state retrenchment, where seemingly small changes implemented early can smooth the way for more fundamental change, or systemic reform in the future. Indeed, in the 2003 Mid-Term Review of the CAP, Fischler was able to use the inclusion of cross-compliance in Agenda 2000 as a sign of tacit approval of the program and to successfully push for its adoption as a mandatory CAP program.The process of the Agenda 2000 CAP negotiations, particularly in contrast to the MacSharry and Fischler Reforms which bookended it, illustrates how CAP reform is more limited without the presence of disruptive politics to open space for broader reform. While trade was a driving factor for the MacSharry Reform, it exerted little pressure on shape or content of the Agenda 2000 CAP agreement. The MacSharry Reform negotiations took place not only while the GATT Uruguay Round was underway, but after agriculture had been identified as a major stumbling block in reaching an agreement. For Agenda 2000, there were no concurrent GATT/WTO talks , and the threat of a new round potentially beginning in the near future was not enough to push the CAP towards further liberalization and away from existing trade-distorting programs. Similarly, enlargement towards Eastern and Central Europe was far enough in the future that it had yet to become a critical issue for the CAP. Moreover, the Commission and the member states were operating under the belief that the new member states would simply be excluded from the direct payments system, meaning that it was not necessary to reform the CAP in preparation for enlargement.

The Agenda 2000 agreement serves as a clear example of what happens when negotiations occur during politics as usual. In such cases, reform outcomes are mostly narrow, limited, and/or non-binding. Emboldened by the sense of urgency lent to the CAP reforms by trade negotiations, impending enlargement, and/or other crises, both MacSharry and Fischler were able to make, and more importantly, deliver on bold proposals, resulting in a major reworking of the core operations of the CAP. Without these disruptive politics during the Agenda 2000 negotiations, the Commission was unable achieve the such systemic reforms. The process of reaching an agreement on Agenda 2000 CAP highlights three tactics commonly employed by reformers seeking to retrench the welfare state: 1) implementing small changes, including even non-binding agreements that allow for deeper structural change in the future; 2) using delayed implementation for cuts as a way to reach an agreement; and 3) marshalling support for the reform package via a number of tactics, including offering compensation in exchange for cuts or changes to programs, buying off member states , and offering special policy exemptions and alternatives to those who are opposed to particular aspects of the reform package. The first tactic is best illustrated by the greening policies, which were adopted but left to the member states to decide how they would implement them. In his 2003 reform, Fischler would use the fact that member states had previously agreed to greening standards as grounds for making these standards mandatory. The second tactic, delaying the initiation of cuts and reforms, was seen in the reforms for all three major sectors: cereals, beef, and dairy. While delays were ostensibly undertaken for the purpose of budgetary feasibility, they also helped politicians avoid blame, as they may no longer be in office when the cuts arrive. Finally, the third tactic, attempting to buy countries’ support with side payments is illustrated most clearly in the dairy sector, with the Commission offering Italy an increase in its milk quota in exchange for supporting the reform and thus eliminating the blocking minority that was preventing an agreement. While Agenda 2000 did not have a landmark initiative like MacSharry’s partial decoupling of payments from production and introduction of direct income payments, Agenda 2000 at least protected MacSharry’s legacy by continuing to cut existing intervention price supports. The compensation for price cuts was added to the existing direct payment scheme, as reformers continued to slowly push the CAP away from system based on market intervention to one that was constructed around income supports. Agenda 2000, also continued to develop the CAP’s second pillar which concerns rural development and greening. Overall, and particularly in comparison to the subsequent Fischler reforms of 2003, Agenda 2000 was unremarkable. It lacked any landmark initiative. Environmental measures, while included, were non-binding and left to member state discretion for the standards. Both options to fundamentally reshape how the CAP is funded, degressivity and co-financing, were abandoned. So too were a number of proposed reforms and cuts in the effort to bring the CAP package in line with the new budget. Many of these reforms were eliminated by Jacques Chirac when he re-opened the already watered down reform agreed to within the Agricultural Council at the Berlin Summit. With Agenda 2000 being not just a CAP reform, but a broad package of reforms designed to orient the EU towards, and prepare it for, the challenges of the new millennium, most proximately enlargement, the member states had to pick where to place their influence. While France used its political capital to go all in on reshaping the CAP to align with French preferences as much as possible, other countries defended different interests: Germany sought to prevent an increase in its budgetary contributions, Spain and the southern countries fought to protect cohesion funds, and the UK defended its rebate.The next chapter examines the third major effort to reform the CAP, the 2003 Mid-Term Review also known as the Fischler Reform. Fischler intended to use this reform to push forward and extend the decoupling of the CAP, first begun by MacSharry in 1992.

Reformers were concerned with not just the CAP in isolation, but also how CAP spending would affect progress toward the goals of the SEA. In addition, reformers needed to contend with the CAP’s impact on trade negotiations in the ongoing GATT Uruguay Round. These events and concerns opened the door for MacSharry to propose and advocate for deeper reforms to the CAP than would be possible when reformers were at work during a period of “politics as usual”.First, MacSharry and his team drafted a full version of their vision for reform. This plan included specific numbers for cuts and compensation levels and was intended to be confidential until the Commission’s formal articulation of the proposal. The second step was the publication of a “Reflections Paper”. This paper explained the proposed reforms in broad terms and identified the main issues the Commission sought to address with this reform. The Reflections Paper was intended to push forward and focus the debate on these matters. The third and final step was the formal presentation of MacSharry’s initial plan, this time including the numbers that were omitted from the Reflections Paper. Preparations for reform began in the spring of 1989 with MacSharry’s creation of an informal working group. The team developing the reforms included the Chef de Cabinet, Paddy Hennessy, Jacques Demarty, who was Jacques Delors’ personal agricultural expert, and DGVI Director General, Guy Legras. The group started their discussions by exploring whether the CAP’s existing price support mechanism could be maintained . At the same time as he was preparing the reform,vertical growing systems MacSharry was also quietly meeting with the Americans about the GATT UR as a means to ensure that the changes being made to the CAP would comply with GATT rules and facilitate an agreement.

MacSharry’s EU team quickly concluded that prices would have to be cut and moved ahead on constructing a reform to do so. Reformers intent on retrenching the welfare state are also known to work in secret. Keeping potential reform proposals out of the public debate, particularly those which include cuts or that involve an overhaul of the manner in which benefits are distributed, is an important way for reformers to manage dissent and opposition. While opposition will certainly spring up, developing the reform out of the public eye allows the reformers to present a full package, including information on the effects of the changes, as opposed to having to constantly defend a policy in development. MacSharry had three goals in his vision of reform, which shaped the content of his working group’s discussions. First, he sought to reduce existing production quotas. Second, MacSharry wanted to impose price cuts, with compensation targeted at small farmers. To MacSharry, attempting to channel aid to small farmers via price supports was costly and inefficient. Given that 6% of cereals producers were responsible for 2/3 of Europe’s output, and 50% of beef came from only 10% of producers, MacSharry saw price supports as a poor instrument for supporting smaller farmers. His third overarching goal was to improve the rural environment, which he sought to do via the promotion of less invasive but more efficient production, the extension of technology, and the redirection of aid . By December of 1990, at the same time that the GATT negotiations had collapsed at the Heysel Conference, the working group had completed a paper outlining initial ideas for reform. The document was leaked to Agra Europe, a major news source on agricultural policy, which promptly published it in January of 1991. The document contained four main elements: price cuts, a system of income compensation, mandatory land set-asides, and some recommendations for measures related to the environment and early retirement. The bulk of the discussion within the leaked plan focused on the price cuts and compensation, which were targeted at cereals, beef, and milk.

These three sectors represented the vast majority of surplus production. By reducing the prices for these goods, farmers would have less incentive to produce them. In addition to production concerns, price cuts in the cereals sector were necessary to protect the competitiveness and market share of those producers who grew grain for animal consumption. Because of the high prices of cereals, livestock farmers were increasingly turning to cheaper animal feed substitutes, imported from the United States and other non-EU countries. These animal feed substitutes had become price competitive with European grain, even though they were slapped with import levies. The new GATT deal included a provision that would force the EU to drop levies on the animal feed substitutes, meaning that unless grain prices were lowered to a reasonable level, animal feed substitutes would be far cheaper than cereals produced for non-human consumption in the EU. In order to keep these products competitive as a feed source for livestock farmers in Europe and abroad, cereal prices had to be lowered. The economic threat posed by animal feed substitutes actually gave MacSharry an opening to propose cuts beyond cereals. Price cuts for cereals meant that livestock farmers would see their input costs lowered. These lower input costs then allowed MacSharry to propose cuts to the beef and dairy sector that would not have been feasible absent lower prices for feed. A system of compensation was designed to accompany the price cuts. Until this point, European farmers were paid primarily through a system of fixed prices and guaranteed purchase agreements. The more farmers grew, the more money they could make, with the EU on the hook for buying, storing, and dumping the excess production. Under the new system of compensation, farmers would be given a “direct payment” which was calculated based on the historic yield of a farmer’s eligible land. Rather than attempting to overhaul the entire payment system in one fell swoop, MacSharry sought to decouple payment from production over time, starting with the most critical sectors. As such, only a portion of the farmers’ land would be supported by direct payments.

The rest of their land would could continue to operate under the traditional system whereby farmers were compensated via a system of inflated purchasing prices for their products. For this reason, the reform is referred to as “partial decoupling”. For the cereal sector, MacSharry and his team proposed a price cut of 35%. Cereals producers would be offered full compensation for their first 30 hectares of land in the form of a direct income payment based on the historic yield of the crop in that region. Compensation for their next 50 hectares of land would be reduced by 25%. A 35% reduction in compensation would be applied to any land beyond that. For dairy producers, the document outlined a 10% cut in the intervention price and an average reduction of 4.5% in quotas. Farmers producing under 200,000kg would be exempted from the quota cut, while those producing over 200,000kg would be subjected to a 10% cut in their quota. Finally, the team proposed a 15% cut in beef intervention prices. Beef sector farmers would be compensated for these cuts via an increase to the premiums they were paid per head of cattle. Beef and dairy farmers would also benefit from the proposed reductions in grain prices, which would translate to lower animal feed costs, reducing input expenditures. The pairing of cuts with compensation is a tactic also seen in welfare state retrenchment. Direct confrontation,outdoor vertical plant stands through the slashing of benefits, often provokes mass protest, leading to the withdrawal of the proposals. For this reason, welfare state reformers will often pair cuts with a form of compensation to buy off resistance. While the reform tactic of pairing cuts with compensation may seem weak or ineffectual, it can and often does have broader implications. These changes to how farmers are supported are changes to the system of support. Once a small change is made to the operation of the program, it opens the door to broader and more systemic reform or retrenchment in the future. Indeed, future CAP reforms would build on and extend MacSharry’s partial decoupling. In a further effort to reduce production, cereals farmers would be required to remove some of their land from production, a practice called “set-asides”. This proposal was the most direct way to curb production, as swaths of land that had previously grown crops would now be required to lay fallow. The amount of land withdrawn from production was to vary based on the size of the holding, with the largest farms, those over 80 hectares, required to set aside 35% of their land. Farmers between 31 and 79 hectares would be required to remove 25% of their land from production while holdings 30 hectares and smaller would be exempted from set-asides altogether. The proposal included the stipulation that land set aside would not be eligible for compensatory payments . This stipulation was one of the methods through which MacSharry aimed to rebalance the disparity in support between large and small farmers.

By not providing compensatory payments on set aside land, and by regulating the amount of set aside land based on the size of production, MacSharry could effectively garnish the earnings of the largest farmers while not affecting the payments to the smallest producers. In addition, the proposal could be presented as a means of curbing production and expenditures, while also helping to heal land that had been damaged by relentless production, with the redistributive effects a mere byproduct. These tactics of both disguising cuts and imposing cuts on some while channeling additional benefits to others again have parallels in the welfare state. When seeking to retrench social benefits, reformers might cut the replacement rate while raising, or at least maintaining, the minimum pension or unemployment benefit. Here, the protection of benefits for some limits opposition to a deeper longer term cut for others. This tactic helps to divide and demobilize resistance, because cuts are neither uniform nor fully visible. The entire package of reforms MacSharry constructed to address the surplus and budget problem mirrors a “vice into virtue” style strategy for designing welfare state reform. The existing system of farmer support was both unequal and dysfunctional. The system of high prices was already taxing for the EU coffers. The income support system linked to production compounded the effect of these high prices, raising expenditure even further by fostering excess production that the EU was responsible for storing and dumping. Instead of proposing to scrap and redesign the entire program, an initiative almost certain to fail, MacSharry sought to make fundamental alterations to the aspects of the program that were most problematic. Specifically, MacSharry proposed lowering prices and removing land from production in order to address problems related to over production, ballooning costs, and environmental damage. The contents and overall design of the reform as elucidated in the leaked report were a product of MacSharry’s fundamental belief that price cuts and quota reductions were unavoidable. From his experience working on budgets in Ireland , MacSharry knew that “the EU could not keep spending 75% of its budget on agriculture. With twenty other Commissioners, one could not control 75% of spending” . Indeed, in Agricultural Council meetings, MacSharry warned that without correction, the CAP budget would overrun the ceiling placed upon agricultural spending. At the same time, MacSharry wanted to keep European farmers on the land. He argued that, “desertification of the rural area would be a disaster, and very expensive [for national governments]. There were no jobs, so people would be on the dole. The infrastructure already existed in the countryside for them: houses, roads, schools, and so on. If there was a rural exodus, new housing, roads, schools, and so forth would have to be built to accommodate all of these people” . MacSharry’s plan for reform was first formally presented to the member states via a “Reflections Paper” published by the Commission in February of 1991. The paper was purely qualitative and provided no specific numbers on cuts, compensation amounts, or any other action, unlike what had been published in the leaked document. The purpose of the document was to explain the proposed reforms in broad terms and to push forward and focus the debate on these matters . The Reflections Paper began with a discussion of two major problems that needed to be addressed in the subsequent reform. The first problem was production.

In addition, reformers confront obstacles stemming from agricultural policies themselves. Here my argument builds on Pierson’s analysis of welfare state retrenchment. Retrenchment of the welfare state is a process whereby policymakers seek to cut spending on social benefits. Examples of retrenchment policies include reducing unemployment benefits, raising the retirement age, and increasing co-payments for health care. Pierson asserts that welfare state reform is a different process than welfare state expansion. Welfare expansion is an exercise in credit claiming while retrenchment is an act of blame avoidance. When expanding the welfare state, politicians are enacting “popular policies in a relatively undeveloped interest environment” whereas retrenching the welfare state “requires elected officials to pursue unpopular policies that must withstand the scrutiny of both voters and well-entrenched networks of interest groups” . In practice, cutting social benefits tends to be unpopular, politically delicate, and difficult to pursue . Pierson identifies several reasons why reasons why welfare state retrenchment is a different and more difficult process than expansion. The first reason is that there is an asymmetry in perception of gains and losses, with voters tending to remember losses more than gains . At election time, voters are more likely to sanction politicians for cuts to programs than they are to reward them for commensurate benefits. Second, when social programs are cut, the costs are highly concentrated, immediate, and sharply felt, while the benefits are typically uncertain, diffuse, long-term, and of low visibility. For beneficiaries of social programs,lettuce vertical farming retrenchment has a direct impact on their well-being. The pensions of senior citizens are smaller or those without jobs no longer qualify for unemployment benefits.

By contrast, the benefits of slightly lower public spending to the public at large are small and diffuse. This asymmetry of impact tends to produce an asymmetry of mobilization, with the groups threatened by retrenchment taking to the streets to defend their benefits, while the general population that might gain slightly says home. Third, the welfare state creates its own support bases or “policy communities”, in Pierson’s language. When social policies are threatened by retrenchment, policy communities are activated and mobilized to defend them. Proposed reductions or other negative changes to retirement benefits in the US, would, for example, mobilize the AARP . The challenge posed by imposing concentrated cuts on coordinated beneficiary groups is further compounded by the fact that many of these policies have strengthened the policy communities they serve over time and have more broadly increased opportunities for these groups to access politicians. As a result, policymakers must contend with an active and visible resistance that will mobilize to oppose their cuts. The fourth and final reason why welfare state retrenchment is different from expansion is the influence that past policy decisions exert on current options for reform. “Lock-in” refers to a situation whereby certain early policy decisions “greatly increase the cost of adopting once possible alternatives and inhibit exit from a current policy path” . A classic example is public pension systems. In the 1930s and 1940s, politicians were free to choose from a number of different models. Most countries chose so-called “pay as you go” systems under which current employees pay for the benefits of current retirees, rather than pre-funding their own pensions. By the 1980s, Pierson contends, reform options were narrowly constrained.

Reformers could not easily shift to a private pension system since they would need to find a way to pay for the pensions of existing retirees along with future private pensions . Lock-in also impeded straight-forward benefit cuts, since retirees and those nearing retirement were counting on promised benefits and often lacked the time and opportunity to boost savings sufficiently to offset program cuts. Pierson finds that even those leaders most inclined to retrench the welfare state, Ronald Reagan in the United States and Margaret Thatcher in the United Kingdom, ultimately failed. In both cases, the reforms that were adopted fell far short of their proponents’ objectives, and social spending did not decline. In the end, policymakers in the US and UK simply could not overcome resistance from program beneficiaries or the challenges inherent in the existing policy structures. There are many similarities between the process of retrenching the welfare state and that of reforming agricultural policy. European agricultural policies are, essentially, welfare for farmers . As with the traditional welfare state, retrenchment of the agricultural welfare state is an entirely different process from the construction of the agricultural welfare state in the first place. As with the welfare state, cutting agricultural policy is unpopular and politically sensitive. CAP reform has, in the past, been delayed due to important elections in member state countries, and heads of government have publicly expressed a desire to weaken or delay reforms until they are out of office. In the same way that governments seeking to retrench welfare programs must contend with the preferences of the supporters or beneficiaries of those programs, agricultural policymakers must contend with the interests of farmers. Much like social policy retrenchment, attempts to impose cuts on agricultural policy mobilize a well organized and entrenched opposition.

Cuts, if they are imposed at all, are typically much narrower than originally proposed. While social and agricultural policy reformers face many of the same challenges, retrenching the agricultural welfare state may be even more difficult than retrenching the social policy welfare state. One reason is that the farmers themselves are key actors in policy implementation. Governments often rely on national farmer organizations to both explain and enact key agricultural policies. The very programs that assist farmers have preserved this group and its organizations. By contrast, groups that represent welfare claimants play no role in policy implementation. This dependence on farmers and their organizations makes it difficult for governments to enact retrenchment policies that would jeopardize cooperation. In addition,vertical grow shelf farmer organizations can potentially frustrate or check retrenchment initiatives at the implementation phase. A second feature that makes agricultural retrenchment especially difficult is that the general public is quite sympathetic to farmers and agricultural interests. As noted above, public support for the CAP is robust not just in France, but even in the Euro-skeptical UK. As Table 1.1 indicated a large majority of citizens believe that CAP spending is at the right level or too low and that the CAP benefits all citizens, not just farmers. Pierson notes that general support for welfare state retrenchment tends to dissipate when specific cuts are put on the table, but in the case of agriculture, there is no general consensus for retrenchment in the first place. Finally, there is the obvious political-institutional difference that countries set their own social policies, but Europe’s agricultural policy must be jointly agreed upon by multiple countries . The greatest hurdle is posed by the rules governing decision making that any reform must clear. For many years, EU agricultural reforms had to be agreed upon unanimously. The rules of Qualified Majority Voting, have been applied to CAP decision making since the adoption of the Single European Act in 1987. For a decision to pass, QMV requires assent from a group of countries that represent both a super-majority of countries and a super-majority of the entire Union’s population . This super majority voting system provides considerable opportunity for opposition and obstruction. Under the current rules of QMV, a blocking minority consisting of 4 countries that represent 35% of the population can prevent the passage of a proposal. The threshold for enacting cuts to the CAP is much higher than that for retrenching national welfare policies. While retrenching the social welfare state is generally considered to be difficult, a case can be made that retrenching the agricultural welfare state is even more challenging. Reformers must out manoeuver farmer organizations that are deeply embedded in the policy process. They must also navigate a public that is favorably disposed toward farmers. Finally, they must overcome the European Union’s complex decision making rules that provide a host of opportunities for thwarting change.The first part of my argument shows why CAP reform is so difficult.

Yet reform does happen at times. This section identifies the circumstances that make CAP reform possible. Moments of crisis may strengthen the hand of reformers. Pierson notes that welfare reformers often deploy or even manufacture crises and constraints to boost support for retrenchment. Globalization is claimed to force countries to cut social spending and taxes in order to remain competitive; deindustrialization and mass unemployment are said to necessitate reductions in labor costs and benefits in order to boost job creation in low-productivity services; European Monetary Union allegedly compels governments to slash spending in order to balance their budgets; and population aging is portrayed as mandating cuts in age-sensitive programs like pensions and health care. Crises and external pressures have also opened the door to agricultural retrenchment. International trade negotiations, enlargement, and environmental crises have all challenged the CAP. They have destabilized the status quo and created opportunities for proponents of far reaching change. These pressures are frequently cited in the literature about CAP reform. One group of scholars links the CAP reform process to GATT/WTO pressures . For these authors, episodes of CAP reform are presented as essentially driven by pressures related to a round of trade negotiations. In this school of thought, the time and content of CAP reform is shaped by the concurrent presence of trade negotiations. Other scholars cite budgetary concerns and the process of enlargement as driving CAP reform . As with the GATT/WTO line of argumentation, these authors evoke pressures related to budgetary restrictions and enlargement to both explain why CAP reform happens when it does and account for the contents of the final agreement. While the attention to these pressures is particularly helpful in identifying the factors that both precipitate reform and strengthen the position of the reformers, this literature is less compelling in explaining the ultimate content of the final CAP reform. More often than not, the final agreement differs greatly from the initial proposals, and the concerns related to external pressures are not always fully addressed. This approach, however, is quite useful for understanding when CAP reformers have the opportunity to press for broader, deeper reforms of the CAP. Building on this insight, I have developed a framework for determining the broader conditions under which CAP reform occurs and the implications of those conditions for reform. CAP reform and negotiations can be broadly categorized as falling under two sets of conditions. The first condition, which I refer to as “politics as usual”, characterizes those negotiations in which the primary pressures and concerns relate to day-to-day functioning and operation of the CAP in the EU under its present configuration. The main challenges and issues typically relate to spending and the budget, rural development, and the environment. Although bold and ambitious reform proposals are made, final agreements under politics as usual conditions tend to be underwhelming. Many of the proposals are defeated outright. Those that are not rejected are often made voluntary or watered down so significantly that the resulting policy has little impact on CAP operations. The second potential condition involves what I refer to as “disruptive politics”. Under this condition, reformers are not only concerned with the CAP itself , but must also consider the problems and consequences of the application of the CAP and its policies beyond the agricultural sector. Specifically, when negotiating the CAP in the context of disruptive politics, reforms are shaped by non-agricultural considerations, such as trade negotiations and enlargement. CAP reformers have considerably more success when they are able to expand the proposal’s scope, tying it to these broader issues. The reform success under “disruptive politics” tracks with what Baumgartner and Jones describe as “Schattschneiderian moments”. In Schattschneiderian moments, issues or policy proposals are reframed or repackaged so as to change the scope of conflict. Much like these moments, disruptive politics allows CAP reformers to reframe the policy under discussion by tying agricultural reform to a broader issue or challenge. By managing the scope of conflict and shifting the agenda CAP reformers have a greater chance of successfully pursuing far-reaching agricultural change.