Interrelationship of Agricultural and General Economic Policies

  • T. E. Josling
Part of the Trade Policy Research Centre book series


It has been fundamental to the objective of the studies reported in this volume that agricultural policy should be seen, not in isolation as a set of farm prices and marketing measures, but in the context of economic policy as a whole. Clearly, in any analysis of agricultural policy the effect on the output and income of the farm sector must be fully explored, as must the implications for food supplies and the consequent trade balance. Similarly the method of financing farm support has to be examined with its associated implications for income distribution. These were the topics of the empirical chapters in Part II. But a complete view requires the result of these investigations to be put in a wider perspective. In Part I, particularly in Chapter 1, a number of questions were raised regarding the place of agriculture in the political and economic decisions facing governments in the industrialised democracies. This chapter seeks to answer some of those questions from the standpoint of the United Kingdom. Since the solution to problems often requires international consultation and action, the discussion ranges over a wider field than specifically British concerns, so that the proposals in the concluding chapter in Part III should be of general interest.


Agricultural Policy Agricultural Trade Farm Policy Producer Subsidy Farm Programme 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.


Unable to display preview. Download preview PDF.

Unable to display preview. Download preview PDF.

Notes and References

  1. 1.
    Empirical studies on the costs of various protective measures are numerous. See, for example, P. R. Johnson, ‘The Social Cost of the Tobacco Program’, Journal of Farm Economics, May 1966;Google Scholar
  2. 3.
    This problem has arisen in particular in connection with the adoption by the United Kingdom of the European Community’s common agricultural policy. See T. E. Josling and Donna Hamway, ‘Distribution of Costs and Benefits of Farm Policy’, in Josling et al., Burdens and Benefits of Farm Support Policies Agricultural Trade Paper No. 1 (London: Trade Policy Research Centre, 1972) for an attempt at a quantification of the consequences, briefly reported on in Chapter 6 above.Google Scholar
  3. 4.
    The problems of measurement are discussed in Josling, ‘Agriculture and Import Saving: Cautionary Note’, in Asher Winegarten and Josling, Agriculture and Import Saving, Occasional Paper No. 5 (London: Hill Samuel, 1970).Google Scholar
  4. A particularly interesting attempt to extend the analysis to include the foreign ‘retaliation’ effect of import substitution is given in Truman Phillips and Christopher Ritson, ‘Reciprocity in International Trade’, Journal of Agricultural Economics, Manchester, September 1970.Google Scholar
  5. 5.
    These questions are discussed further in Agricultural Protection, Domestic Policy and International Trade International Agricultural Adjustment, Supporting Study No. 9 (Rome: Food and Agriculture Organization, 1974), and some possible approaches are suggested. The starting point is to express the impact of each policy measure in terms of a ‘consumer tax equivalent’ and a ‘producer subsidy equivalent’, which are then related to trade volume and terms of trade effects to arrive at a ‘tariff equivalent’. An example of a qualitative externality measure is the ratio of tariff equivalent to producer subsidy — the extent to which the domestic subsidy has a corresponding trade restrictive element. A quantitative measure is, for example the absolute size of the reduction in foreign exchange earnings of other countries arising from these domestic policies. Examples for various North American and West European countries show, for instance, that whereas the ‘quality’ of European policies is more trade-restrictive, in ‘quantity’ terms American support levels have a more significant impact on trade.Google Scholar
  6. 6.
    The study was done as an adjunct to commodity projections in an attempt to incorporate price movements to reconcile extrapolations of consumption and production. See A World Price Equilibrium Model, Agricultural Commodity Projections Working Paper No. 3 (Rome: Food and Agriculture Organization, 1971).Google Scholar
  7. 7.
    For a discussion of the implications of European policy for developing countries, see Marsh, F. Ellis and Ritson, Farmers and Foreigners (London: Overseas Development Institute, 1973).Google Scholar
  8. American policy in this regard is discussed in D. Gale Johnson, ‘Agricultural and Foreign Economic Policy’, Journal of Farm Economics, December 1964,Google Scholar
  9. Harry G. Johnson, Economic Policies Toward Less Developed Countries (Washington: Brookings Institution, 1967).Google Scholar
  10. 8.
    In a British context see K. Cowling and David Metcalf, ‘Labour Transfer from Agriculture: a Regional Analysis’, The Manchester School Manchester, No. 1, 1968;Google Scholar
  11. for one of a number of American studies, see Dale E. Hathaway and B. B. Perkins, ‘Farm Labor Mobility, Migration and Income Distribution’, American Journal of Agricultural Economics May 1968.Google Scholar
  12. 9.
    This is documented in an interesting study by Dennis Lucey and D. Kaldor, Rural Industrialization: the Impact of Industrialization on two Rural Communities in Western Ireland (London: Chapman, 1969).In Western Ireland it was shown that agricultural output actually increased when farmers took part-time jobs in manufacturing industries. Though the improvement in the balance of a farm implied by the application of more capital and less labour on the same land area may be an important effect of rural non-farm employment programmes, it is not yet clear whether this is a transitional stage in the reduction of the farm population or a stable social system in itself. Do the sons of part-time farmers themselves become part-time farmers?Google Scholar
  13. 10.
    See, for instance, the study on the impact of tax structure on British fanning by A. Evans, ‘The Impact of Taxation on Agriculture’, Journal of Agricultural Economics, May 1969.Google Scholar
  14. 11.
    Many of these studies are reported in the survey article by G. Peters, ‘Land Use Studies in Britain: a Review’, Journal of Agricultural Economics, May 1970.Google Scholar
  15. 12.
    Perhaps the clearest example of agricultural programmes following from other commercial and political objectives is the adoption by the United Kingdom of the regulations of the European Community’s common agricultural policy. The dual role of the CAP as both an agricultural policy and a European integration device is emphasised in the Wageningen memorandum: Group of European Agricultural Economists, Reform of the European Community’s Common Agricultural Policy, Wageningen Memorandum (London and Wageningen: Trade Policy Research Centre and the Agricultural University of Wageningen, 1973).Google Scholar
  16. 13.
    The problems of monetary union and its effect on common prices is discussed in Graham Hallet, ‘The Problem of Agriculture in a European Economic Union’, Journal of Agricultural Economics, September 1970;Google Scholar
  17. Josling, ‘Exchange Rate Flexibility and the Common Agricultural Policy’, Weltwirtschaftliches Archiv, Kiel, Vol. 104, No. 1, 1970.Google Scholar

Copyright information

© Trade Policy Research Center 1976

Authors and Affiliations

  • T. E. Josling

There are no affiliations available

Personalised recommendations