Agriculture: A Very Short Introduction by Paul Brassley & Richard Soffe

Author:Paul Brassley & Richard Soffe
Language: eng
Format: epub
ISBN: 9780198725961
Publisher: OUP Oxford
Published: 2016-02-23T05:00:00+00:00

These data are bad news for farmers in rich countries, because they imply that the demand for food will not increase much unless the population increases, and population increases in rich countries tend to be lower than in poor countries. Conversely, they are bad news for consumers in poor countries, because they imply that small increases in food prices or small decreases in incomes will have big effects on the amount of food that they can buy.

Does a slow demand increase matter to rich-country farmers? It does if they increase supplies more than demand, because the prices they receive will then fall. In theory, this should be a self-regulating system, because lower prices should result in less being supplied to the market, as all farmers reduce their output, or some go out of business altogether, and supplies thus fall to the level at which they equate to the quantity demanded.

In practice it’s more complicated. Product prices are not the only influence on farm output. Production costs can change: pig and poultry profitability, for example, is very sensitive to changes in the price of feedingstuffs. Farmers can adopt new varieties of crops, or breeds of livestock, which produce more without needing more inputs, or any of the other myriad technical changes that increase output or reduce costs. Government policies can change, so that farmers are encouraged to produce more, as they were after World War II and for many years after in Europe, or less, as they were when this policy succeeded to the point of producing surpluses.

It is also important to remember that agricultural production cannot be turned on and off at the flick of a switch. If farmers decide that they want to produce more milk it could take them more than two years to raise heifer calves to the point at which they are ready to be mated, become pregnant, deliver a calf, and take their place in the dairy herd. Tree crops may also take years to come into production. Overall, therefore, with some exceptions, output of many farm products tends to respond only slowly to changes in market conditions.

The reason why apple growers in Kent might have mixed feelings about a bumper harvest should now be clear. The demand for apples in the UK is falling as the range of fruit sold in supermarkets increases, and falling prices will not have much impact on the quantity of apples that consumers buy. In addition, UK farmers have to compete with suppliers in other countries who also sell their apples into the UK market, and that takes us on to another important issue for farmers: the question of international trade.

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