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Uses of Agricultural Statistics

In the United States, agricultural statistics are invaluable to farm operations for planning and decision-making. Until about 50 years ago, however, distribution of available information was limited both in scope and in dissemination. In the 1920's, wide swings in farm prices and development of more specialized farms stimulated farmers' interest in production information for competing areas. During this period there was rapid expansion in the scope of statistical programs and in distribution of information. Most commercial farmers began to use agricultural statistics, directly or indirectly, in planning crop, livestock, and poultry operations and for marketing decisions.

Uses of statistical information are both extensive and varied. Uses made by farm operations vary with size and type of operation and the kinds of decisions being made. To cash-crop farmers who usually have more alternatives in planning crop acreage than those producing feed crops for use on the farm, early-season indications of acreage planted are quite useful. Producers of cash crops, which can be stored, are also confronted with decisions in marketing. These farmers find production and stocks estimates to be of value.

Producers of perishable crops are often interested in the timing of plantings as well as the acreage planted as an indication of market flow during the marketing period. Livestock producers and feeders, in planning their operations, utilize animal inventory numbers by species, type, and weight group as well as breeding intentions, slaughter, and price information, for decisions involving capital investment.

Today many countries are joining the world economy. Farming operations in these countries need to become efficient in the way they produce products in order to compete successfully and profitably in the world markets. This is particularly important given the changes that economic policy has undergone over the past decade. In general terms, the change is from a closed economy, emphasizing protection of domestic production through trade barriers, towards a more open economy, emphasizing international efficiency and the reduction of market controls. This transition to a more open economy is neither easy nor it is ever complete. The management of the transition process is particularly important for the agricultural sector because the agricultural sector is a "tradable" sector. Tariffs and trade issues, regional liberalization, international prices, and exchange rates are major issues for the sector and are also the major issues for the transition to a more open economy. The effective management of this transition requires changes in the policy-making process.

While policy-making is inherently political, the efficient transition to an open economy requires that decision-makers understand the economic implications of their decisions. In a closed economy, characterized by state intervention and controls, policy decision-making is strongly oriented towards negotiating agreements among interested client groups and rent-seekers. Policy-making in an open economy requires an understanding of the economic consequences of policy decisions. The wide availability of objective information and analysis is important to this process. It is a prime antidote to rent-seeking behavior. Further, policy analysis is a principal means of including the interests of the small and medium farmers who lack a lobbying group in the decision-making process. Sound policy analysis provides decision-makers with information showing the impact of policies on affected groups.

Further, these problems are often dynamic. While one week the problem may be restrictions on cotton, the next week the problem may be poultry, the next year it may be oils, or a looming deficit of feed grains, etc. Moving to a more open economy is not a simple once-and-for-all change in policies, but a continuous and dynamic transition process involving multiple decisions oriented towards the goal of an open and efficient economy.

It is not just the government that makes decisions. Cotton producers are making decisions based on their understanding of the significance of new cotton entering the world markets, poultry producers may be delaying investments based on their understanding of US prices and the potential impact of imports, etc. Private sector decision-making will in large part determine a country's ability to respond to a more open policy framework. However, their decision-making ability is also constrained by the relative lack of timely, organized, sound information and analysis.

Besides the producer, other important users of agricultural statistics are farm organizations, agri-business, and government. Use of agricultural statistics by farm organizations ranges from simple distribution of information to making important marketing decisions in commodity cooperatives.

Farm supply cooperatives are also heavy users of statistics in planning their purchases, and in processing and distributing feed, fertilizer, seed, and other farm supplies. For those engaged in marketing, processing, and distributing agricultural products, supplies and prospective supply information is useful in planning these operations and contributes to the orderliness of the different markets that link producer with consumer.

Finally, different levels of government are important users of statistics. Federal price support and production control programs both require information on acreage, production, stocks, prices, and income. Agricultural statistics are also used in planning and administering other federal and state programs in activities such as marketing, consumer protection, conservation, and education.