Progress in Agricultural Geography (Routledge Revivals) by Michael Pacione

Author:Michael Pacione [Pacione, Michael]
Language: eng
Format: epub
ISBN: 9780415707497
Barnesnoble:
Publisher: Taylor & Francis
Published: 2014-12-04T00:00:00+00:00

Types of Agricultural Policy Measure

Through the political process, governments create and manipulate policy measures (instruments) to reach the agreed policy goals. Unfortunately the analyst now meets a second set of problems since any single policy goal tends to be approached through a variety of measures, while a single measure is often designed to reach more than one goal. Price supports, for example, are commonly used both to orientate supply and maintain farm incomes. Thus the relationship between a policy goal and a measure cannot be determined easily.

As with values and goals, a common ‘pool’ of measures exists for all developed countries, but each country applies a distinctive combination of measures. Heidhues (1970) usefully lists six factors that contribute to policy measure differentiation: the stage of economic development, farm size structure, resource endowment, population density, degree of food self-sufficiency and the political influence of agriculture. The societal value system should be added to this list; measures acceptable to counteract low farm incomes in socialist-oriented Sweden, for example, are not acceptable in a country like the United States. The pool of policy measures has been developed over the last five decades, each measure reflecting a contemporary explanation by economists of the problems faced by agriculture (Tracy, 1964). In the 1920s and 1930s, for example, agricultural problems in Western Europe were initially attributed to the loss of foreign markets, then to slack domestic demand and finally to inefficient marketing systems. Consequently tariff protection for agriculture was supplemented by marketing controls through marketing boards. In the 1950s, attention turned to the impact of the technological revolution on farming and the need for product price supports, together with measures to restrict supply, so as to bring the farm economy into equilibrium. Through inertia, such policy measures often remain in force decades after the conditions under which they were introduced have changed, and despite developments in our understanding of the problems facing agriculture.

In the late 1950s and 1960s, a considerable research effort was made by economists on what is now known as ‘the farm problem’. In reality it is not one but an interlocking set of problems including small-farm structural inefficiency, the long-run oversupply of markets, a cost-price squeeze on producers, annual variability in production and farm incomes and, centrally, the persistence of low incomes in agriculture. Hill and Ingersent (1977, p. 106) have been able to identify five separate theories to account for the last element only — low farm incomes. A different policy measure is relevant to each explanation be it the declining income elasticity of demand for food with economic growth, the continued application of output-increasing farm technology despite falling real product prices, the low level of management in agriculture, or the increased rates of product yield to human resources from investment in education. The contemporary consensus view of the farm problem has been reviewed by Josling (1974) and Bowler (1979, pp. 13–20) and is not repeated here. The central thrust of the explanation, however, interprets the farm problem as a function of

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