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I'm David Pannell from the University of Western Australia. Welcome to this course, titled
Agriculture, Economics, and Nature. I hope you'll enjoy learning about these issues with me over
the next six weeks. The course, of course, is about agriculture, including agricultural production
and the interaction between agriculture and the environment. We'll be tackling these issues
from an economic perspective, and I hope you'll find that economics helps to enrich our
understanding of what's happening and what should happen in agriculture and environmental
management. We'll be looking at a wide range of questions, including, why prices for some
agricultural products fallen so dramatically for more than 100 years? How have farmers stayed in
business despite those price falls? What are some of the key challenges that confront agriculture
currently and in coming years? How have farmers approached decision-making about
agricultural inputs such as fertilizers, and how should they do so? What are the aims of existing
government policies for agriculture, and how can they be improved? And how can we best
protect the environment from the negative impacts of agricultural production? The course
structuring is a six-week course, and each week there will be a different theme, and on each
theme there will be 8 to 10 brief videos, including lectures, interviews, demonstrations, and case
studies. There will be reading tasks each week, a brief quiz each week to make sure you've
understood the material, and a final exam. In week one, we'll talk about the agricultural
production and prices, and agriculture's reliance on natural resources. So that will include
looking at the history of agricultural production and prices, explaining the changes that have
occurred in production and prices over time, a look at the 2007 global food crisis, and an
examination of agriculture's usage of resources of different types-- land, water, nutrients, and
pesticides. In week two, we'll cover the resource and environmental challenges facing
agriculture, including water availability, the idea of peak phosphorus, herbicide resistance, and
climate change. Week three is about the economics of agricultural inputs. We'll start by
examining the relationship between inputs and outputs, and then we'll show how to identify the
optimal level of an input-- the one that maximizes a farmer's profits. And then we'll repeat that,
but in a situation where an input causes pollution-- what should that do to optimal input levels?
And we'll finish by looking at flat payoff functions, which has some important implications for
how farmers have flexibility in their choice of input levels. Week four covers the economics of
land conservation, and the topics that week will include evaluation of land conservation
practices, how to weigh up benefits and costs correctly, how to consider the non-economic
factors, and we'll illustrate it with a case study of conservation agriculture. Week five is about the
economics of agri-environmental projects. And in that week, we'll extend the economics beyond
the farm guide to include issues that concern the broader community. We'll look at some of the
characteristics of typical agri-environmental projects, and I'll give you an introduction to benefit
cost analysis, and we'll illustrate these issues with a case study from Australia at looking the
Gibbs Lands Lakes. And finally in week six, we'll look at agricultural policies. We'll examine
policies that support agriculture, and policies that protect the rural environment. We'll look at a
couple of segments on problems with agricultural policies, including problems that can arise
from trying to provide support with higher prices, and biofuels, as illustrations of some of the
problems that can occur. And we'll finish that week by looking at the need for justification for
agricultural policy and what justifications there might be for different types of agricultural policy.
In weeks three and four, I'll try and help you build some spreadsheet skills by providing a
demonstration of how to build spreadsheets that tackle two of the economic issues that we
address--optimizing input levels, and discounting to compare benefits and costs that occur at
different times. Each week, we'll include at least one interview with an expert related to the
topic covered in that week. And our experts will include farmers, agricultural scientists,
agricultural economists, and an agricultural advisor. So make the most of the course. I'm sure
you'll find that you get the most out of it if you put more into it. So I think you should do the
assigned reading, try and participate in the forums, and do the quizzes each week. So that's it.
Welcome to the course. It's time to get started. [GUITAR MUSIC PLAYING]