DP118 | Industrial Countries' Agricultural Policy: How, What and Why?


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Industrial countries' agricultural policies involve extensive intervention in both domestic markets and international trade. This paper sketches some of the techniques of intervention commonly used and asesses their net effects in terms of higher prices and reduced welfare. It then argues that these deleterious policies have emerged from the interaction of an economic system which is constantly changing and social attitudes which abhor change and value rural life-styles. Within the broad boundaries defined by these forces, agricultural pressure groups, bureaucrats and politicians have considerable discretion, and their interaction typically leads to higher levels and increasingly complex systems of farm support. This outcome results not just from equilibrium in the "political market-place", but also from the process by which decisions on agriculture (and other issues) are taken.