Public Policy Towards Agriculture

Earlier chapters in this book have established, first, that agriculture has some special problems, such as income instability because of farming’s reliance on weather and the necessity for adjustments in the structure of farming as an expanding output runs up against a static demand for food. Second, it has been shown that governments have become involved with their agricultures, principally through intervention in the markets for farm products and inputs. The first characteristic is often the key to the second. However there are also many instances where government involvement has arisen from historical accident, such as from the urgent necessity to expand domestic food production in times of war, or from a desire to influence other sectors of the economy, such as to maintain a socially viable rural population in remote areas. This attempt to influence the size or shape of the farming industry, for a range of reasons, is broadly labelled ‘agricultural policy’.