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Objectives of an Agricultural Price Support Policy*

Published online by Cambridge University Press:  07 November 2014

W. M. Drummond
W. M. Drummond*
Affiliation:
Ontario Agricultural College
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Extract

While there is nothing unusual about the practice of giving special price assistance to particularly needy producers in times of emergency, the provision of agricultural price support as a matter of general policy is a comparatively recent development. Despite this fact the circumstances surrounding the adoption of the policy have indicated a considerable variation in objectives. The diversity of aims can perhaps best be shown by a few specific examples.

The agricultural price support provided in the United Kingdom during the past decade or more was designed to achieve several purposes. It was supposed to bring about a very definite improvement in the net income and purchasing power position of farmers generally. It was intended to act as a stimulant to production so that the country could become, agriculturally, more self-sufficient and foreign exchange could be conserved. In addition there was the hope that, by increasing the profitability of farming, it would make it financially possible to take advantage of the latest technological developments and thereby increase productive efficiency. All these results were expected to flow from guaranteed prices based on costs and announced well in advance of production.

Type
Research Article
Information
Canadian Journal of Economics and Political Science/Revue canadienne de economiques et science politique , Volume 17 , Issue 3 , August 1951 , pp. 344 - 351
Copyright
Copyright © Canadian Political Science Association 1951

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Footnotes

*

This paper was read at the annual meeting of the Canadian Political Science Association in Montreal, June 7, 1951.

References

1 See article by the author entitled “Canadian Agricultural Price Problems and Policies,” Journal of Farm Economics, XXXI, no. 4, 11, 1949, particularly pp. 585–8.Google Scholar

2 For a brief and up-to-date account of the importance of Canadian agricultural exports see the article by MacFarlane, D. L. in Farm Policy Forum, 05, 1951.Google Scholar

3 8 Geo. VI, c. 29, “An Act for the Support of the Prices of Agricultural Products during the Transition from War to Peace.”

4 This decision was first announced by the Minister of Agriculture, Mr. Gardiner, at the annual convention of the Canadian Federation of Agriculture in January, 1950.

5 From a radio address entitled The Battle against Inflation by King, Rt. Hon. W. L. Mackenzie (Ottawa, 1943).Google Scholar

6 These authorities consistently claim that a given amount of any good produced and sold under conditions of monopolistic competition will sell for a higher price than if it had been produced and sold under purely competitive conditions. For verification consult Chamberlin, Edward, The Theory of Monopolistic Competition (3rd ed., Cambridge, 1938).Google Scholar

7 See House of Commons Debates, LXXXII, no. 111, 07 31, 1944 Google Scholar, particularly pp. 5781-3, for a good expression of Government opinion on this point.