Perspectives on agricultural policy reform and the rural economy

This presentation highlights the impact of agricultural policies, and related reforms, on farm family households and the rural economy. While agriculture plays an important role in the economy of some rural areas, its overall economic importance is low and declining. Agricultural policy has not prevented, and cannot prevent, the long-term downward trend in agricultural employment and de-population in many rural areas. Agricultural policy reform can imply significant adjustment costs for some individuals and areas in the short term, but the long-term benefits to both farm and non farm households, and to rural areas generally, can be considerable. Agricultural policy and rural development policy both pursue a diversity of objectives. In both cases, a clear understanding of the underlying economic relationships that preclude the desired economic developments from occurring is pre-requisite for effective policy design. Any sectoral, multi-sectoral or territorial policy should be consistent with national policy objectives and broader policy approaches.