Walter Falcon, the Helen Farnsworth Professor of International Agricultural Policy in Economics (emeritus), writes from an unusual perspective. During the academic year he serves as a senior fellow with the Freeman Spogli Institute for International Studies and the Stanford Woods Institute for the Environment. He spends the summers on his family farm near Marion, Iowa. He returns to campus each year with reflections on the challenges and rewards of faming life in his "Almanac Report." Falcon is former deputy director of the Center on Food Security and the Environment. 

It is now the end of summer for what has been a milestone year for my wife and me. This essay, itself a mini-milestone, is the fifth annual report from our farm. As readers of prior Almanac postings will know, my day job is as professor of international agricultural policy at Stanford University; however, we also own a medium-sized farm in east central Iowa that produces corn, soybeans, alfalfa and beef from a cow-calf herd. Our friends laughingly refer to our operation as a corn-California crop rotation. 

The 2016 crop year has been nothing short of phenomenal. Planting was early, the weather was warm – sometimes downright hot – and the rains were ideal. On average, our county receives nine inches of rain during the critical growing months of June and July. This year we received more than 12 inches, quite unlike the two inches I wrote about in 2012.

Both corn and soybeans are about two weeks ahead of their maturity schedules for what promises to be record production. Corn yields of 225 bushels per acre on our farm look probable. Soybeans are more uncertain; they are loaded with pods, but all of the rain has left them susceptible to a fungal disease known as sudden-death syndrome (SDS). This fungus, present in many Iowa soils, enters the roots and emits a toxin. Plants looking healthy one day can suddenly wither a few days later. The exact amount of bean loss is mainly a function of how close the plants are to being ripe. We are almost past that maturity barrier now, so even if SDS strikes, it should not lower our yields very much. Unfortunately, record yields do not equate to record incomes, an important point that I return to later.

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The perfect summer and record crops were complemented by two milestone events of a more personal nature. In June, my wife and I celebrated our 60^th wedding anniversary. Then in September, we both celebrated our 80^th birthdays. There has never been a day when I have not known my wife. We grew up on nearby farms and are fourth-generation caretakers of land that was settled in the late 1850’s. And, we have both seen the most extraordinary changes over our eight decades. Even with a 50-year hiatus while at Harvard and Stanford universities, Iowa has always been home. 

Anniversaries are the time for reminiscing and looking at old pictures. Not surprisingly, a major topic of conversation at our gathering was the change in farming practices. As the younger son in our family, I remember a long list of chores, even when I was small – gathering eggs, filling the watering tanks for pigs and “going after” the cows in the evening. But I really took notice of agriculture when I was about 10.

It was shortly after Word War II, and at that time we used a four-year crop rotation: corn, corn, oats, clover. We were in the transition from horses to tractors, with the corn still being planted with a two-row horse-drawn planter. This was a task reserved for my father (a.k.a. Buck), for no one else could get the rows sufficiently straight to suit him. On a really long day, when the horses were in good condition, father could plant 15 acres. He used 42-inch rows, wide enough for the horses, and planted about 18,000 kernels of seed per acre. The seed was “checked”, which meant that cornfields could be cultivated for weeds both via the length of the field and across it. 

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The contrast between then and now is stark. An 18-row planter, dispensing 36,000 seeds per acre in 20-inch rows, can now plant 40 acres per hour – almost three times what my father could do in an entire day. Unlike horses, the tractors do not get tired. And they have lights. Steering the tractor is no longer a problem, since the fields and tractors are now synchronized with global positioning systems. For the most part, farmers are just along for the ride, and to keep awake on mile-long rows, several have become Sudoku fanatics! The planting system is wonderful except for one large problem – a new 24-row planter costs upwards of $225,000, not including the tractor.

When I was 12 my father decided that he needed more help and that I was his newly designated “hired man.” To reinforce the point, he decided that I needed my own tractor. He purchased a new Farmall “C” for me, including a two-row cultivator for attacking weeds. The grand total cost of this equipment was $1600! (Perhaps what I remember most is driving myself around the block in my hometown on the day we took delivery.)

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For the next 10 years, I spent most of my summers on that damned tractor fighting morning glories (that would tangle and often require dismounting every 100 yards), thistles, button weeds and all manner of other species. Now, herbicides, Roundup-ready seeds and no-tillage farming are the norm. What took a summer for me to do is now completed easily in a day or two with a high-clearance sprayer with long booms that cover 48 rows at a time.  

What the future will bring is an interesting question. For 20 years or more, farmers have used and overused highly effective herbicides such as Roundup.  And predictably, there is increasing weed resistance to these herbicides. In our county, there has been a devastating spread of Palmer amaranth—a tall spiky plant that produces thousands of seeds. It is highly resistant to commonly used herbicides, and whether its control lies in yet another new herbicide remains to be seen. For the moment, however, it is a menace.

For years, our entire crop rotation was constrained by labor availability at harvest. The picking of ear corn by hand was time-consuming, and typically a cold, miserable task. I can still hear my father saying, “the mark of a man is whether he can pick 100 bushels of ear corn, and then shovel them into a crib before nightfall.

Several things happened almost simultaneously, however, that fundamentally changed rural Iowa life: the switch from horses to tractors; the availability of cheap commercial nitrogen fertilizer; and the large-scale introduction of soybeans.  The departure of the horses was a joyful occasion in itself – tractors neither kick nor need their sheds cleaned.

Moreover, much less land was now needed to provide hay, oats and straw for the horses. A new crop rotation evolved that took the form of corn, soybeans, corn, soybeans. Commercial nitrogen helped maintain the soil fertility; hybrid corn seeds offered new genetic potential as yields on our farm went from 70 bushels per acre in 1946 to more than 200 bushels per acre currently; herbicides more or less controlled the weeds; and perhaps most of all, the mechanical corn picker broke the critical labor bottleneck at harvest.

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To the extent that my family ever celebrated, we partied the night our first new Case corn picker was delivered in 1948. (Father may have even had one of his carefully hidden beers that evening!) It was a one-row snapper that was simple beyond belief – just rollers that stripped the corn ears from the stock and elevated them into a trailing wagon.

It was the start of a new era, however, and the one-row pull machine quickly gave way to two-row pickers that mounted directly on a tractor, which in turn gave way to self-propelled picker-combines that used multiple “heads” for harvesting either corn or soybeans.  These machines are huge – and are extraordinarily costly. A new 12-row combine fitted for corn harvest costs on the order of $600,000. Unlike picking by hand, when 100 bushels per day was the norm, the new behemoths can harvest 10 acres per hour – some 20,000 bushels per day – provided that the farmer has enough trucks and collector wagons to move the grain from the combine to market or to on-farm storage units. Many are the farm spouses who now drive massive grain trucks during the harvest season!

The coffee crowd is delighted that the traffic from presidential politicians across Iowa is down substantially from last summer, but the two remaining candidates seemingly have yet to say anything meaningful to my neighbors. Farmers are feeling economically trapped and politically abandoned. “None of the above” would certainly win the election if it were held today. While Iowa shows as a dead heat in the presidential polls, it is the most unenthusiastic 50/50 that I have ever seen on both sides.

Most farmers truly enjoy their work and lifestyle, but they are now hurting. It is easy to understand how the hurt arises. In the last 36 months, corn, soybean and fed-cattle prices have dropped about 50 percent, 33 percent and 25 percent, respectively. The $600,000 machines that (perhaps!) were feasible economically with $7 per bushel corn now look like a mechanical albatross with corn at $3.50 or less per bushel.

Even with low interest rates, many farmers find themselves overcapitalized and with heavy debt burdens. During the prior period of high prices, many borrowed against the equity they had in land, only to see local land prices go from about $9,200 to roughly $7,800 per acre. Solvency has become a serious question for some. Interestingly, the younger, most modern, and most aggressive young farmers seem in the most trouble, whereas some of the older, more conservative farmers using rebuilt machinery are coping better.

The morning coffee conversations are also punctuated by several environmental topics, especially nitrogen and water runoffs.  The state of Iowa is pressing hard for voluntary conservation approaches. But farmers are truly puzzled and worried about what they should do. For 100 years they have been urged to improve their land by tiling, that is, to lay clay or perforated plastic pipe three to four feet underground such that wet portions of fields could be drained to facilitate greater yields. Often these tiles have outlets into creeks or ditches.

But now there is a dilemma. The EPA is asserting that water from tiles is running water, and therefore subject to EPA regulation under the Clean Water Act. Given uncertainty about the regulations, farmers fear the worst. Moreover, much of the nitrogen runoff from cornfields is via drainage into those same tiles. While better placement and timing of fertilizer applications can help, it is hard to envisage major curtailment of nutrient runoff without also taking up the tile issue. 

Tiles are virtually in all fields, and the implications of potential new regulations are enormous. As a consequence, groups like the Farm Bureau are pushing new voluntary conservation measures very strongly. They are also going after EPA’s attempt to regulate farm waters in an all-out war. In the meantime, farmers wait uneasily and hope for the best.

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My final comment for the summer is not a “cock and bull” story, although it borders on one. (Definition: “an absurd, improbable story presented as the truth.”) It was partly motivated by “Desperado,” the 2,972-pound Angus bull that won the “Super Bull” contest at the Iowa State Fair. (Lest I be accused of being gender insensitive, I should also report that the life-sized cow, sculpted in butter, is still doing well and now stands beside a sculpturefrom “Star Trek”, also in butter.  Do not ask me why!)

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As part of Stanford Worldview's Wide Angle: Election 2016 Project, Nate Persily of Stanford Law School recently described how the 2016 election highlights changing trends in polarization and gridlock in the United States, particularly the role of campaign finance and digital technology. 

Watch the interview with Nate Persily

Read the Interview with Nate Persily

The Koret Foundation of San Francisco has extended its gift to Stanford’s Shorenstein Asia-Pacific Research Center (APARC) in support of contemporary Korean studies.

Two more years have been added to a three-year gift awarded to the Center in 2015, totaling to 12 years of lifetime support from the Foundation, whose mission is to endow scholarly solutions to community problems and to invest in leading institutions that serve as levers for achieving impact.

The gifts have allowed the Center to bring eminent professionals from Asia and the United States to Stanford for an annual fellowship and an annual international conference known as the Koret Workshop, all of which aims to promote greater understanding and closer ties between Korea and the United States.

“The Koret Foundation’s gift represents its commitment to strengthening research and finding solutions to challenges in Korea and the United States,” said Shorenstein APARC Director Gi-Wook Shin. “Their support over the past eight years has enabled our Korea Program to invite numerous visiting scholars, offer new courses to students, and foster important conversations in the Bay Area community and beyond. We greatly value our relationship with the Foundation and thank them for their enduring generosity.”

Since 2008, eight Koret fellows have conducted research at the Center, many public seminars have been held, and each workshop has yielded a book published by Shorenstein APARC and the Brookings Institution Press.

A real possibility exists that foreign hackers could throw a monkey wrench into the outcome of the U.S. presidential election in the fall, a Stanford expert says.

Herbert Lin, senior research scholar for cyberpolicy and security at Stanford’s Center for International Security and Cooperation and a research fellow at the Hoover Institution, said that electronic voting could be affected by hackers in the presidential race, especially if a candidate claims tampering. In recent months, hackers from outside the country reportedly infiltrated the Democratic National Committee and Hillary Clinton campaign computer networks, leading to data breaches that made headlines worldwide.

The Stanford News Service interviewed Lin on this subject:

How worried are you about possible cyberattacks that could influence the outcome of the November elections in the U.S.?

There are two kinds of things to worry about. One is an actual cyberattack that, for example, alters vote counts in a way that tilts the election away from the will of the voters. That kind of attack is hard to pull off, and I’m not very worried about that – though I worry about it some.

A second worry – much more serious in my opinion – is the possibility that an election loser might challenge the outcome of the election, alleging that the results were altered by a cyberattack, especially if the election were close. How would anyone ever prove that ballots, electronically cast with no permanent and auditable record, were accurately counted?

If the evidence that Russians hacked the Democratic National Committee and the Hillary Clinton campaign proves to be legitimate, how should President Obama respond to Russia and Vladimir Putin?

Herbert Lin (Image credit: Rod Searcey/CISAC)

The U.S. has many response options, ranging from private diplomatic conversations to military action and everything in between. There are many things we could do to exact a price. But some of these things may be wise and others may be unwise. For example, an unwise option would be to threaten overt military action and otherwise do saber-rattling in response. The balancing act is calibrating a response that exacts a penalty but does not provoke a response that is unacceptable to us – and that’s a hard thing to do.

Would the U.S. ever hack back at Russia in some way?

I would be utterly amazed if the U.S. were not hacking Russia, and every other major power in the world for that matter. And I would be amazed if every other major power in the world were not hacking the U.S. There’s a baseline level of hacking that is going on all the time by everyone.

So, the question isn’t hacking or not hacking, the question is hacking back versus hacking. And on that point, I suspect it would be really hard for the recipient – in this case, Russia – to distinguish between hacking that almost surely is going on already and hacking that was conducted in response to any putative Russian involvement in the Democratic National Committee hack.

Is the hacking symbolic of a poor relationship between the U.S. and Russian governments?

I would not say symbolic – but it’s entirely consistent with a poor relationship.

In this 2015 video, Herb Lin talks about how U.S. policy on offensive cyber operations should be declassified.

Clifton Parker is a writer for the Stanford News Service.

When is the last time you took a good, hard look at your health insurance options? Do you know what changes were made to your plan last year?

If the answer is “no,” you are not alone.

According to a new study by Maria Polyakova, assistant professor of health research and policy and Stanford Health Policy core faculty member, most Medicare Part D enrollees do not change their plans from year to year — even though plans can change drastically.

The study, recently published in the American Economic Journal: Applied, asserts that nudging consumers to re-evaluate their coverage could save them around $500 per year in out of pocket spending and premiums.

What is Medicare Part D?

Implemented in 2006, Part D allows Medicare users to purchase prescription drug coverage. Plans are administered by private insurance companies, but are heavily subsidized and regulated by the federal government. Consumers choose from more than 30 plans in their home state and are able to switch during a yearly open-enrollment period.

About 40 million people in the United States are enrolled in a Part D plan.

But Polyakova finds that “people do not seem to be switching contracts very often. At the same time, the contracts are changing quite dramatically every year.”

Though the study does not examine why consumers failed to switch, the data suggests that changing plans can be costly. Not necessarily a financial cost, but likely one of time or energy.

Thoroughly examining more than 30 plans on a yearly basis can be a burden, and changes are not always easy to detect.

“There are many other features of Part D plans that may change, so even if premiums appear the same, insurers may have changed other parts of coverage, such as deductible levels, co-pays and co-insurance, as well as which drugs are included,” said Polyakova.

Because the Part D market as a whole is dynamic, consumers can lose money even when their plan is stable.

“Even if your specific plan doesn’t change much, it is possible that it is not the best plan anymore because other plans change.”

Consumers tend to stick with the plan they picked when they first signed up. As a result, the study observes that individuals with similar needs may find themselves enrolled in very different plans if they made their first enrollment choices in different years.

This suggests that while most people likely try to pick the best coverage initially, they do not tend to re-evaluate their coverage each year in a way that fits their needs.

How can we improve coverage choices?

Polyakova believes that if the U.S. government were to more actively remind people to re-examine their plans during open enrollment, they could save consumers 20 to 30 percent.

Some researchers worry that improving individual choices and encouraging consumers to update their coverage could negatively affect the insurance market through “adverse selection.”

For example, individuals who are fairly healthy might tend to choose less generous plans than those who are relatively sick. If all those in poorer health end up in one plan, and there are no relatively low-spending enrollees to counteract the risk, the generous plan can become unsustainable.

However, the study finds evidence suggesting that for Part D, reminders to re-examine plans are unlikely to cause issues from adverse selection.

The federal government has implemented risk adjustment policies, or ways to combat the negative effects of adverse selection, that work to keep the market from unraveling. The government provides higher subsidies for sicker patients, pays the majority of patient costs and caps insurers’ profits and losses.

“From the point of view of the government, it seems that it is worthwhile to remind people who are already enrolled to reconsider their choices and potentially explain the differences across plans,” said Polyakova.

As the Affordable Care Act (ACA) changes coverage for Part D plans, reminding enrollees to re-examine their choices will become even more important. The ACA will substantially increase coverage, and plans could change considerably as a result.

What does this mean for the health insurance market?

While the study focuses specifically on Medicare Part D, Polyakova believes these findings likely translate to other areas of health insurance, particularly coverage under the ACA, which has many similar policies.

“The idea that we should remind consumers to re-evaluate plans has already been quite influential in the ACA policy debate,” said Polyakova. “Policymakers are tracking whether consumers are switching plans from one year to the next.”

She argues that in a consumer-driven economy, people must be able to easily make choices between products, in this case health insurance plans, for the market to function. But because choosing takes so much time and plan features are not always transparent, the forces driving the market may become weak.

Educating people about the financial benefits of switching plans could help the insurance market get back on track.

“People should try to reconsider their health risk and their insurance choices during every enrollment period,” Polyakova said. “Because if they don’t, it could have serious financial implications.”

When Barack Obama became the first sitting U.S. president to visit Hiroshima, his speech outlined the threat to humanity of nuclear weapons and the need for humankind to turn its ingenuity to the task of achieving a world free of them. Reactions were largely warm, but as Shorenstein APARC Associate Director for Research Daniel Sneider writes, the voices of those who found his remarks lacking may serve as a signpost toward a future of deeper reconciliation in the Asia-Pacific.

Read the Nippon.com editorial in English and Japanese.