THE ECONOMIC POLITY OF FARM POLICY

A review of the 'new political economy' of agricultural policies includes models of social income maximising governments, collective action by pressure groups', and the interaction between politicians and voters. An alternative explanation for Olson's ''social by-product'' theory for why farmers received massive subsidies as a large group is also presented. An explanation for various patterns of farm policy interventions is given, including why rich countries subsidise and poor countries tax farmers. Finally, the role of public research expenditures and the interaction with commodity policy is explored.