ABSTRACT

A great deal of work has been done by the OECD on the so-called ‘adjustment process’, getting agriculture and agricultural policies from where they are to where they ought to be. In the EC, the practice of fixing prices a year at a time deprives the prices set of any longer-term significance. One form of supply control which has received much attention is ‘set-aside’. For many years successive US Administrations have operated various schemes which require the farmer not to produce on, or to set aside, a part or all of his farmland. The case for some form of supply management thus hangs heavily on the fact or the belief that regulation through price is politically unacceptable. As a concept, decoupling is wholly unexceptionable. It provides a way to reconcile the political wish to support farming or the rural community with the economic necessity to avoid over-production and trade distortion.