By Ron Leonard
Last week, Dr. Willard Cochrane passed away at the age of 98. Dr. Cochrane was an agricultural economist whose career spanned the development of agricultural economics as a profession. He was dean of the School of Agricultural Economics at the University of Minnesota where he emerged nationally as the leading proponent of the concept of supply management, which dominated a ferocious debate over farm policy after the second World War. Cochrane became the chief economist at the Department of Agriculture in 1961, joining fellow Minnesotan Orville Freeman when President John F. Kennedy appointed the latter as Secretary of Agriculture.
Freeman created the position of chief economist, which gave Cochrane responsibility for economic policy and planning. Cochrane in turn recommended that Freeman establish the Economic Research Service (ERS), restoring the Bureau of Agricultural Economics that had been dismembered after the Korean War.
With ERS as the planning platform, Cochrane directed the planning and development of the legislative proposal for supply management policy and the development of a food stamp demonstration project and the drafting of legislation for a national food stamp program. Both supply management and food stamps would become central elements of policy initiatives on farm and food programs of the Kennedy administration.
Work on the proposal for a supply management program had started in mid-December 1960, but was interrupted in early January when 1961 crop projections for corn and feed grains indicated farmers would harvest more corn in the Fall than could be safely stored. Freeman ordered an emergency supply management program to be prepared to reduce corn output. Cochrane and his economists finished the proposal in February. The legislation was introduced and enacted by Congress in March in less than 30 days, record time for Congressional action, and was ready before most farmers were plowing ground in April for planting crops.
The emergency program was voluntary, and essentially paid farmers not to plant corn. The cost of the emergency program turned out to be less than the federal government would have spent to buy the corn that would have been produced under then-existing farm programs. Corn production was estimated to be a billion bushels lower than if all available crop acres had been planted. Overall feed grain carryover for 1961 was lower than in 1960, reducing storage costs USDA would otherwise have paid.
The success of the emergency program was a fortunate event, but it was not necessarily a predictable outcome for future years. It demonstrated that supply management worked, undercutting the strategy of the Farm Bureau and other opponents to argue it was an untested policy and could not work. Nonetheless, the argument over supply management raged on until 1964 when permanent legislation based on the concept was adopted for corn and wheat.
Cochrane did not suffer fools easily. As an economist he based his conclusion on numbers and his recommendations on his conclusions, a trait that leads most people who work with economists to agree that arguing with economists is a losing game. He was Kennedy’s campaign advisor on farm policy, and the campaign staff one day unwittingly asked Cochrane to brief reporters on the elements of supply management. The reporters listened, somewhat baffled, until one of them realized Cochrane was talking about reducing commodity output. Wouldn’t that raise food prices, the reporter asked? Cochrane admitted that food might cost as much as 10 percent more over time. The headlines the next day warned that Kennedy’s farm program could lead to a 10 percent increase in food prices. Cochrane’s briefing days were over.
Cochrane’s skills were valued considerably higher in other spheres. The core element of supply management is planning the key units of annual commodity programs, especially the level of costs per acre of cropland needed to induce farmer participation. Ultimately, a farmer will sit down with pencil and paper (or computer) to calculate whether signing up for a commodity program will produce more income than planting a full or partial crop. Essentially, the farmer is negotiating with the Office of Management and Budget (OMB) as to what the federal government would pay him or her. Under the Freeman version of supply management, USDA would represent the farmer in negotiations. USDA, however, reports to OMB on budget matters. The agriculture committees of Congress quickly realized, since OMB reports to Congress, that farmers, or their organizations, would prefer to have Congress negotiate with OMB on their behalf.
Supply management was an issue of what institution, either Congress or the cabinet department would deal with OMB on program costs and spending. The development of the commodity program plan, however, would be a responsibility of the program staff operating under the instructions of the agency or committee. In effect, since ERS functions as a planning staff available to USDA and the congressional committees, Cochrane or his successor would crunch the numbers regardless.
Cochrane’s greatest legacy, however, is not his role as an official in shaping government policy. Instead he will be remembered as an educator, as an advisor and mentor for the hundreds of men and women who are now putting into practices the skills they gained from his instruction and the insights he nurtured in his long career on the St. Paul campus of the University of Minnesota. My daughter is one, and as I watch her progress in her career, I see many things for which I am grateful to Willard Cochrane.
Rod Leonard is a former colleague of Cochrane’s at the U.S. Department of Agriculture and a former IATP board member.
