agricultural policy

(redirected from Farming policy)
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 ?
Launching a consultation on his plans, Mr Gove said: "As we leave the EU, we have a historic opportunity to deliver a farming policy which works for the whole industry.
Conducted by auctioneers Halls, the sale was organised after a change in farming policy by Stanley Machin.
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Lord Elis-Thomas also proposed that experts investigate how agricultural policy could be strengthened and explore practical solutions such as investing in lambing sheds on highlands: "I also suggest that it would be beneficial to ask experts to investigate how highland farming policy could be strengthened in future, to protect the value of the industry to the rural economy and to Wales' exports, whilst delivering the required environmental and social aims.
The ambition of the European Union to accord farming policy with 2020 Green proposals means farmers would be forced to set aside 7% of land on top of any fallow pasture that already exists.
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In a letter to Mrs Spelman, the FUW outlined nine points which should underpin future farming policy.
Sir Donald Curry, government adviser for food and farming policy, spoke about the growth of the global population and the increase in the demand for food.
Terry Court and Richard Grainger, joint managing directors of auctioneers Brightwells Ltd, said the market's decline was due to a number of events which had shaken the farming industry in recent years, plus changes in EU farming policy and supermarket domination of the wholesale meat trade.
Ville Itala, the Finnish coalition party chairman, has criticised the government's farming policy.
Chirac launched a tirade against Blair at the end of a tense EU summit where Britain frustrated a French bid to block reform of European farming policy.
A rice farming policy advisory group to the Food Agency has drawn up a policy draft calling for the abolition of the existing rice production subsidies program, according to a draft seen by Kyodo News on Thursday.