Governments around the world use a wide variety
of different policy approaches to try and support
agricultural production and productivity.
Today we're going to talk about a few examples
of the sorts of approaches that governments
use in these policies.
First of all, we'll talk about subsidized crop insurance.
In the United States, farmers can
purchase government subsidized crop insurance through what's
called the Risk Management Agency of the United States
Department of Agriculture.
So this insures them against crop losses
due to natural disasters or natural events,
but it also covers them for revenue losses
due to low commodity prices or commodity price declines.
So on the screen there's a website address
which you can go to to get more information.
Because these schemes are subsidized by government,
they amount to, or they include, a transfer of wealth
from taxpayers to farmers.
So it is the broader community supporting agriculture.
So that's one of the themes of these different approaches
that we'll be looking at today.
The second one I want to talk about is direct payments.
So governments in a number of countries
have subsidized agricultural production for a long time,
either through inflating agricultural prices, which
is something we'll talk about in a later session,
or more commonly in Europe in recent years
has been the idea of a single payment which
is not tied to prices.
So the single payment scheme in the European Union's
common agriculture policy involves
farmers receiving an amount of money
per hectare of agricultural land that they
agree to keep in good condition and that they actually
keep in good condition.
So it's not tied to the price of the commodity-- it's just
an amount that they receive, basically
for continuing to look after the land and continuing to farm it.
So there's another way that governments
have supported agriculture.
The third idea is extension.
Agricultural extension's got a long history.
Extension's a word that's used in a different way
in agriculture than in some other places.
Extension means a broad range of activities
that include education, training, raising awareness,
facilitating networks and communications between farmers
or between farmers and agencies.
So it's a broad term that covers a lot of different approaches.
And government agencies or government
funded bodies or universities around the world
communicate the latest developments
in agriculture techniques to farmers to try
and help them improve their production.
In some developed countries, and Australia's one of them,
government support for extension has
tended to decrease over time.
So there's much more reliance these days
in Australia on extension being provided by the private sector,
whether that's by paid farm management consultants
or by people who work for agricultural supplies--
people who supply fertilizers and herbicides, for example.
There's much more a private sector role
in this area of extension these days
than there was 20 or 30 years ago.
The next way that governments try
to support agricultural production
is through research and development.
So agricultural R&D also has a long history,
and there's lots of evidence that R&D
makes an enormous contribution to agricultural productivity.
So national and state agricultural agencies
are part of this, universities, and other types
of research organizations.
So in Australia we have the CSIRO,
which is an Australian government funded
national research organization that doesn't just
do agricultural research-- it does a whole range of things,
but they've been a prominent player
in agricultural research.
The US Department of Agriculture has the Agricultural Research
Service which plays an important similar role in this state
research as well.
Again, another decline here.
There's been observation that funding
for agricultural research around the world
has been on a declining trend.
And there's quite a bit of concern
being expressed that in coming decades
it will be hard to maintain the level of productivity growth
that we've seen in agriculture for the last few decades.
It's a particular concern in developing countries
where they really are at a time where
they need agricultural research to help them turn the corner,
get over the hump and improve their agricultural
productivity.
And there's been quite a lot of discussion
in various quarters about the importance of increasing
agricultural research investment.
Next, infrastructure.
So governments provide infrastructure such as railway
and roads to enable transportation
of produce from farms to markets, but also to transport
inputs from ports or from factories to the farm.
So we have in Western Australia a Department of Infrastructure
and Regional Development, and a Department
of Planning, Transport and Infrastructure in South Africa.
Every developed country has a department
that looks after these sorts of provisions.
And finally, there is institutional support.
This is perhaps a bit less obvious,
but it's one of the things that helps our whole economy
and our whole society function.
And it benefits agriculture in the same way
as it benefits other parts of the economy.
So agriculture benefits from the top of institutions
that government provides for the benefit of the whole community,
such as the rule of law, the enforcement of contracts,
public education, and so on.
So in summary, there are many different types
of policies that directly or indirectly support
agricultural production, and we've looked at a few of them.
We've looked at subsidized crop production, direct payments,
extension, research and development, infrastructure
and institutional support.
Professor David Pannell, BSc(Agric), BEc, PhDUWA School of Agriculture and Environment
Jacob Hawkins, BA(Biol), MESM, PhDSchool of Agricultural and Resource Economics
