Academic journal article Journal of Agricultural and Applied Economics

Discussion: Economic Sustainability of Rural Areas

Academic journal article Journal of Agricultural and Applied Economics

Discussion: Economic Sustainability of Rural Areas

Article excerpt

The three articles in this invited paper session examine value-added strategies related to agriculture and food at the state and federal level designed to enhance rural development. Two of the papers dealt with the GO TEXAN program and the other with organic agriculture. AU three papers were well written and interesting, but all three also shed light on the problem of using classical economic theory to interpret differentiated agriculture and food products as opposed to undifferentiated commodities.

Key Words: food, organic, rural development, value added

JEL Classifications: Q18, Q56

In recent years, state-level branding programs to enhance local sales of agriculture and food products have become the norm as states compete to try to keep more dollars in state and thereby increase the multiplier effect and potentially support rural economic development. Similarly, the creation of a national standard in 2002 for certified organic agricultural products provided another possible stimulus for rural producers to capture a premium for their valueadded products and thereby enhance rural quality of life and development. As a rural sociologist with a long history of concern and support for rural economic development, I am happy to see agricultural economists increase their attention to these issues, although it is not without problems as they turn their attention to "differentiated" products as opposed to the traditional focus on "undifferentiated" commodities that better fit classical theories of economics and comparative advantage. Indeed, such government programs by definition distort the markets for agriculture and food products through a system of incentives and subsidies for local/regional production. In doing so, they violate the assumptions of comparative advantage (Smith, 1776; Ricardo, 1817) and enter into the more nuanced area of competitive advantage as advanced by Porter (1990).

Two of the articles (Murova and Hanagriff, 2011; Xu, Malaga, and Martinez-Mejia, 2011) from this invited paper session investigate the case of the GO TEXAN program as a tool to support rural development. The first article by Murova and Hanagriff (2011) focuses on the GO TEXAN Hometown STARS (Supporting Tourism and Rural Success) Program. The state of Texas provides funds through this program to help advertise community tourism events. The purpose of the article is to improve the use and efficiency of the program. The authors do a good job of developing a detailed literature review of the different methodological approaches that have been used to study such phenomena. The article presents information from two sets of data related to the program: surveys filled out by community members (most often Chamber of Commerce representatives) that summarized the attendance and projected revenues associated with the events and a visitors' survey filled out by attendees of the event that document their expenditures and other travel information. Although the methods and results related to the visitors' survey appear to be reliable and valid, those related to the community surveys are suspect and therefore probably severely limits its usefulness for informing GO TEXAN policy improvement. Specifically, the fact that the community surveys are filled out by a community member using estimates of attendance and revenues combined with methodological issues related to the operationalization of independent variable as well as the dummy variables used as dependent variables cast substantial doubts on the usefulness of this information.

The second article by Xu, Malaga, and Martinez-Mejia (2011) focuses on an analysis of specific GO TEXAN sponsored activities and the use of the GO TEXAN logo in regard to supporting rural development. They discovered that certain activities (trade shows, retail promotions and media events, and reverse trade missions) and types of use of the logo (brochures) had a positive rural development impact. The authors acknowledge shortcomings in their data collection, response rate, and their proxy variable used to distinguish rural and nonrural regions. …

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