New Directions for Agricultural Policy in the Industrial Countries

Abstract

Previous chapters, especially Chapters 9 and 11, have emphasized that the price-support and subsidy policies of the industrial countries have approached the farm income problem from the wrong end, so to speak. These policies attempt to improve the incomes of farm people by increasing demand for farm products and thus the demand for farm inputs. The critically important element determining the incomes of farm people and the returns on their resources are the conditions of factor supply. Over a period of years, supply conditions dominate demand conditions in determining the returns to farm resources. Demand conditions can have some influence over the quantities of resources engaged in agriculture, but, except for land, have no significant long-run effect on resource returns.