Reforming the Role of Government in Agricultural Markets

Abstract

For most of the twentieth century, particularly after the 1930s depression, governments worldwide intervened substantially in both input and output markets for agriculture, in some countries excluding private firms altogether. Seed, feed, fertiliser, pesticides, finance and advice were provided by state organisations or with state subsidies. Fixed asset investment (e.g. land purchase and development — dams, roads, fences) was often similarly assisted. Crop purchase was often carried out by widely distributed state depots offering standard prices across a whole country (pan-territorial pricing). Grain stocks were accumulated by the state in order to set and stabilise consumer prices. Large bureaucracies were set up to administer public agricultural services, imposing much budgetary cost — particularly for price stabilisation, mostly grains. The main purpose was to achieve self-sufficiency in food staples or to promote exports of agricultural commodities.