The themes In this paper are basically three; each theme relates to a different cause of instability within the agriculture sector. All of these sources of Instability beg for additional conceptual and empirical work. The first source of instability will be defined as Internal, the second as external or multimarket, and the third and as public policies. It is argued that a comprehensive view of instability and uncertainty in the agricultural sector of the United States or in other countries cannot be achieved without acknowledging the contributions of all three major sources of instability.

The first major issue In agricultural sector stability analysis is hew large are the potential benefits from correcting whatever market failures exist? The second major issue relates to the potential failures in governmental implementation. Are the costs associated with these failures sufficiently "small" to justify public policy correction of particular market failures in agriculture?

A major reason why a more comprehensive set of risk markets has not arisen within the private sector can be traced directly to heavy governmental intervention. So much of the risk is tome or is potentially borne by the public sector that little incentive exists for the emergence of private institutions to manage inherent instabilities and risks.

A potentially far more important set of issues than those outlined above relates to the longer-term unstable economic waves that have been observed for the U.S. agricultural sector. If the U.S. agricultural 144sector were only faced with short-term instabilities, the recent crisis would not have arisen. It Is far easier to design effective institutions for managing short-term than long-term instabilities.