Agricultural Prices and the Use of Resources
As noted in Chapter 2, many governments attempt to use prices as means of achieving income objectives for their farmers. It has been hoped that higher output prices would result in higher and more satisfactory farm incomes. As argued later (Chapter 9), such an expectation has little realism. The aim in this chapter is to illustrate some of the effects of distortions in prices upon the use of farm resources. As has already been shown, there are wide differences in the level of farm product prices among the various industrial nations. If farmers did not respond to prices of outputs and inputs, these wide differences would primarily reflect differing degrees of income transfers to the various producer groups within agriculture.
KeywordsSupply Function Output Price Supply Elasticity Price Support Farm Input
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Notes and References
- 1.W. E. Pearson and R. E. Friend, The Netherlands’ Mixed Feed Industry (Washington: USDA, 1970), p. 36.Google Scholar