Price To Subsidy Link Cited With Supply Issues

Governmental support of agriculture rises when markets fall, and appears to diminish when prices rise. Given the intractability of developed country governments in their determination to support agriculture when reason dictates that such support should have long since been abandoned, this phenomenon is hardly surprising.

ptslcThe latest Organisation for Economic Cooperation and Development analysis of levels of support to agriculture [*] confirms this unsurprising relationship (see also article in European Policy News section this issue). With a 35% plus fall in world agricultural commodity prices between 1997 and 1999, the proportion of farm incomes in