agricultural policy

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Agricultural policyclick for a larger image
Fig. 6 Agricultural policy. (a) The short-term shifts in supply (S) and their effects on price (P) and quantity (Q).

(b) Long-term shifts caused by the influence of productivity improvement on supply.

agricultural policy

a policy concerned both with protecting the economic interests of the agricultural community by subsidizing farm prices and incomes, and with promoting greater efficiency by encouraging farm consolidation and mechanization.

The rationale for supporting agriculture partly reflects the ‘special case’ nature of the industry itself: agriculture, unlike manufacturing industry, is especially vulnerable to events outside its immediate control. Supply tends to fluctuate erratically from year to year, depending upon such vagaries as the weather and the incidence of pestilence and disease, S1, S2 and S3 in Fig. 6 (a), causing wide changes in farm prices and farm incomes. Over the long term, while the demand for many basic foodstuffs and animal produce has grown only slowly, from DD to D1D1 in Fig. 6 (b), significant PRODUCTIVITY improvements associated with farm mechanization, chemical fertilizers and pesticides, etc., have tended to increase supply at a faster rate than demand, from SS to S1 S1 in Fig. 6 (b), causing farm prices and incomes to fall (see MARKET FAILURE).

Farming can thus be very much a hit-and-miss affair, and governments concerned with the impact of changes in food supplies and prices (on, for example, the level of farm incomes, the balance of payments and inflation rates) may well feel some imperative to regulate the situation. But there are also social and political factors at work; for example, the desire to preserve rural communities and the fact that, even in some advanced industrial countries (for example, the European Union), the agricultural sector often commands a political vote out of all proportion to its economic weight. See ENGEL'S LAW, COBWEB THEOREM, PRICE SUPPORT, INCOME SUPPORT, COMMON AGRICULTURAL POLICY, FOOD AND AGRICULTURAL ORGANIZATION.

References in periodicals archive ?
Further, any attempt to do away with the present food safety networks, agriculture subsidy and subsidised public utility services can have significant implications with more poverty, hunger and malnutrition.
In 2013, Mutua put in place an agriculture subsidy programme, water harvesting, and expansion of economic welfare of the county's approximated 1.2 million people.
Department of Agriculture subsidy, or interest-rate subsidies under Section 236 of the National Housing Act.
The Committee was informed that as many as Rs 231,117 million were receivables as on December 2017 which include Rs 172,000 million receivables from consumers, Rs 21,075 million agricultural subsidy from federal government, Rs17,796 million agriculture subsidy from government of Balochistan and Rs 20,245 million tariff differential subsidy.
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The growers have been registered for agriculture subsidy while they have also been connected with the information technology (IT) facilities through smart phones.
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She examines the historic, economic, and political background leading up to Brazil's challenge of the US cotton subsidies and the main findings of five WTO reports that upheld that challenge; the impact of the initiation and results of the challenge in political and negotiating dynamics involving agriculture subsidies and other trade-related issues in the WTO; the effects on domestic agriculture subsidy reforms in the US and European Union; and the impacts of the challenge on the negotiating end-game of the Doha Development Fund.
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The G-33 proposal on food security aims to address the problems faced by developing countries due to outdated WTO rules, which base agriculture subsidy calculation on external reference prices of 1986-88, even as global food prices have increased manifold during this period.

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