The Political Economy of Agriculture in the United States
Agricultural policy at the level of the federal government is a complex web of interventions covering output markets, input markets, trade, public good investments, renewable and exhaustible natural resources, regulation of externalities, education, and the marketing and distribution of food products. A historical review of public policy in agriculture reveals not only tension between the PERT and PEST roles of the public sector, but also some coordination between these two types of activities. PEST policies, or political economic-seeking transfers, are meant to redistribute wealth from one social group to another and are not explicitly concerned with efficiency. Transportation system investments, water resource developments, and land reclamation activities have all made significant contributions to economic growth. A major resource available to the US agricultural sector has been the knowledge generated by public-sector investments in research, which has been shown time and again to have a significant influence on agricultural productivity and growth.