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David Gale Johnson is widely regarded as one of the intellectual leaders in the field of agricultural economics in the mid- to late 20th century. Born and raised on an Iowa farm, in the early 1940s Johnson was an assistant professor at Iowa State University, where Theodore W. Schultz was department head. Due to a dispute over academic freedom, in 1943 Schultz resigned from Iowa State and moved with several junior faculty, including Johnson, to the economics department at the University of Chicago. Johnson became one of the founders of the Chicago School’s ‘oral tradition’ and the workshop system that trained many recognized economists. In addition to his scholarly work and mentoring of students, Johnson served the University of Chicago in various capacities, as Department Chair, Dean of Social Sciences, and Provost. He was President of both the American Farm Economic Association and the American Economic Association, served on numerous national advisory committees, and was an adviser to many governments and international agencies. He was the editor of Economic Development and Cultural Change from 1985 until 2003.

Over the course of his career Johnson’s research addressed important topics related to the economics of agriculture in both industrialized countries and developing countries. Johnson emphasized both the welfare effects of agricultural policies on farm and rural people, and their effects on the efficiency of resource allocation within agriculture and between agriculture and other sectors of the economy. His early work focused on domestic agricultural policy design. In his influential 1947 book, Forward Prices for Agriculture, he provided both a critique of the parity price concept that dominated agricultural policy debate in the post-war era, and an alternative to it based on understanding the dynamics of the agricultural sector. Another focus of his early work was the role of labour resources in agriculture. His classic 1950 paper on resource allocation under share contracts anticipated much of the debate about their efficiency that was to follow in the 1970s and later. In his equally important 1950 paper on the agricultural supply function, Johnson laid the intellectual groundwork for the extensive literature on agricultural supply that would come in later decades. Importantly, this paper also debunked the claim by Galbraith and Black (1938) that the elasticity of agricultural supply is near zero, an argument that was used to rationalize the use of agricultural price supports.

From the 1950s, Johnson’s attention moved increasingly to the international policy arena. Perhaps his best-known and most influential work was his 1973 book, World Agriculture in Disarray. In this book, Johnson used a general equilibrium model of a growing economy as the basis for his analysis of the impacts that domestic and trade policy interventions have on welfare and resource allocation. Using both theory and data, he showed that output price policies have little or no effect on the returns to the mobile resources engaged in farming (capital and labour), and that it is through the factor markets that returns of farming and other sectors of the economy are equalized. A major conclusion of Johnson’s analysis is that the primary effects of subsidy programmes for agriculture is to increase the returns to and price of land, to expand agricultural output, and to induce governments to interfere with international trade. Johnson’s work was highly influential in bringing the issue of agricultural trade policy into the international policy arena.

Johnson was recognized as one of the leading experts on agriculture in China, the Soviet Union, and other centrally planned economies. He was one of the first Americans to tour Russian farms in the mid-1950s and point out the inefficiencies of the communal farm system. Four decades later, he would conclude that the cost of the failed Soviet agricultural policy was a major factor in the ultimate demise of the Soviet Union. Johnson and his students were also close observers of the Chinese agricultural economy, the reforms that began in the late 1970s, and the rapid economic growth that followed those reforms.

In the 1980s and 1990s, Johnson focused an increasing amount of his research on the role of agriculture in economic growth during the 19th and 20th centuries, and its relationship to population growth and the improved well-being of the human population in both industrialized and developing countries. His approach to this topic was a direct extension of his vision of agriculture and its role in economic growth. Johnson’s investigation of US agricultural incomes in the 1930s and 1940s was essentially a study of the economics of agriculture in a developing economy. Later Johnson applied insights from his earlier work to analyse economic development in an international context. His work on economic development emphasized the contributions of improvements in agricultural productivity to economic development, the falling real price of food and consequently to improving food security. A further consequence of growing agricultural productivity, combined with the low income elasticity of demand for farm products, was migration out of agriculture.

Throughout his career, Johnson emphasized that the per capita supply of agricultural commodities has been increasing for more than a century, despite the fact that this period has experienced the highest population growth rates in human history. Johnson frequently emphasized that, since at least the 1860s, the long-term trend in the real price of agricultural commodities has been downward, and at an accelerating rate. Between 1866 and 1996, for example, the real price of wheat declined at an annual average rate of 0.89 per cent, but between 1955 and 1996 the annual rate of decline in the real price of wheat was 2.69 per cent. Combined with the fact that the poorest people of the world spend much more of their income on food than richer people, Johnson inferred that gains from agricultural growth had been widely shared and had actually benefited the poor most.

Johnson’s ability to disentangle long-run trends from short-term shocks made his advice valuable to governments, but it was often at odds with conventional wisdom. For example, during the 1970s many commentators, politicians and economists thought that a new era of resource scarcity was emerging. Projections were for high and rising farm prices. Farmers were encouraged by farm price-support policy and exhortations from the Secretary of Agriculture to plant ‘fence-row to fence-row’. Johnson was one of the few voices urging caution and more appreciation of the long history of falling real farm commodity prices. Only when prices collapsed in the early 1980s and, inevitably, the budget costs of farm subsidy programmes exceeded all government projections was Johnson’s message appreciated. A similar episode, concerning China’s role as a grain importer, occurred almost two decades later. Again, Johnson, the source of careful economic logic and sound data analysis, pointed out the sloppy thinking behind the dramatic pronouncements like ‘Who will feed China?’ Within a few years Johnson had been again proven right as China has continued to be a significant grain exporter. Johnson summarized his views of the agricultural supply pessimists as follows; ‘…those who make their living by presenting the future of food supply in very negative terms should be called upon to show conclusively why the remarkable record of the recent past will not continue’ (Johnson 1999, p. 23).

Johnson also addressed the issue of population growth, and chaired a National Research Council (NRC) committee whose 1986 report, Population Growth and Economic Development, proved to be controversial. Contrary to the conventional wisdom of the time (or of today), this report argued that population growth per se was not a major cause of low rates of economic growth or environmental problems in developing countries. The arguments in the NRC report were straightforward implications of economic reasoning. First, the report pointed out the various economic arguments, such as agglomeration economies, scale economies, and the arguments of endogenous growth theory, which suggest that higher populations and higher population densities may increase productivity. Second, the report made the point that environmental degradation is caused not by population per se but by the lack of appropriate institutions, including well-defined and legally defensible property rights. Third, the report emphasized the substitutability of many resources and the role of prices in signalling resource scarcity and in leading to requisite adjustments in resource utilization and innovation.

Given the importance that Johnson attributed to agricultural technology as a source of improvement in human well-being since the Industrial Revolution, he also argued forcefully against anti-technology sentiments. In particular, Johnson expressed concern about the potential negative impact that regulation of biotechnology could have on the well-being of the world’s poor. He outlined these concerns in one of his last publications (Johnson, 2002). He pointed out that the costs of regulating genetically modified organisms, such as bio-fortified foods, will be borne largely by the world’s poor, as they are the only ones who spend a significant share of their income on food and would benefit most from an increased availability of micronutrients at a low cost. In addition, he argued that regulations on biotechnology would discourage investment in research, and he noted that biotechnology could bring significant benefits by providing natural substitutes for synthetic pesticides that are costly for poor farmers and have well-known adverse health and environmental impacts.

See Also

Selected Works

  • 1947. Forward prices for agriculture. Chicago: University of Chicago Press. Reissued with new foreword, New York: Arno, 1976.

  • 1950a. Resource allocation under share contracts. Journal of Political Economy 58: 111–123.

  • 1950b. The nature of the supply function for agricultural products. American Economic Review 60: 539–564.

  • 1973. World agriculture in disarray, 2nd edn. London: Macmillan, 1991.

  • 1997. Agriculture and the wealth of nations. American Economic Review 87: 1–12.

  • 1999. North America and the world grain market. In The economics of world wheat markets, ed. J. Antle and V. Smith. Wallingford, UK: CABI.

  • 2002. Biotechnology issues for developing economies. Economic Development and Cultural Change 51: 1–4.