chapter  9
Agriculture and the state
Pages 36

This chapter will concentrate on the developed market economies and on Western Europe and the US in particular. The EC, the US andJapan together ac count for around 80 per cent of the total protection afforded to agriculture in the developed group of countries. This is partly because of the high level of protection in these count ries and partly as a result of their size as producers and/or traders (Reeves 1987). In these countries agricultural policy has great national importance - perhaps in inverse proportion to the significance of the agricultural sector of the economy in terms of its contribution to gross national product (GNP), employment or, in many countries, balance of trade. Taking the UK, the US and Australia as examples, Fig. 9.2 shows that the share of GNP derived from agriculture has fallen over the last 30-40 years. Similarly, agricultural employment has fallen sharply to an insignificant proportion of total employment. Although world trade in food and other agricultural produce has risen fast over the last 30 years (Tarrant 1985), its contribution to total trade by value has fallen. Even in the US, where grain exports have become increasingly important, agricultural exports have only managed to maintain their share of all exports by value. At the same time government financial support to agriculture has continued to grow. Another way of looking at this is to say that in 1977 direct and indirect financial support to the whole mining, manufacturing and construction sector of the UK economy amounted to 7.1 per cent of GNP, whereas support to agriculture amounted to 13.6 per cent (Centre for Agricultural Strategy 1980). In 1984/85 the total effects of the CAP of the EC, including direct impact on consumer prices, provided a subsidy of f20 000 per farmer in the UK and f7 000 per job in agriculture. This compares with a subsidy of f6 500 per job in British Leyland at the height of government support to that company in 1981/82.