Limited Achievement of Farm Policy Objectives

Abstract

The domestic farm-support policies of the industrial countries impose enormous costs on consumers and taxpayers and such costs, if present policies are continued, will not decline from the levels of the early and mid-1980s. The trade restrictions that governments consider to be essential for these policies have been, are and will continue to be important sources of tension among trading countries. Unless there is a significant degree of liberalization of agricultural trade in the Uruguay Round of multilateral trade negotiations, which got under way in Geneva under the auspices of the GATT in 1987, there is danger that the multilateral trading system as it has evolved since the Second World War will suffer irreparable damage. It has been demonstrated that high farm prices alone are not enough to provide politically acceptable incomes to farm families. So long as the major reliance is placed on protection and high prices, the pressure is for still more protection and still higher prices. Experience since 1960 has shown that governments can provide higher real prices for farm products for only a limited period of time and, at best, governments can temper the downward trend in real prices paid to farmers.