Schuh
Challenges in Policy
agriculture will be a declining share of a
growing economy [Johnston, 1970]. We pro-
pose to deal with the equity problem by land
reform, while ignoring the well-tested tenets
of human capital theory, with its precept that
the distribution of human capital is more
important than the distribution of physical
capital. Moreover, we channel our limited
resources to large numbers of localized de-
velopment projects, while failing to recog-
nize the importance of economic policies,
and that such policies in most low income
countries discriminate severely against rural
people.
Finally, we ascribe too easily to the false
dichotomy between equity and efficiency.
Our proper concern with the equity problem
causes us to take an almost perverse pride in
ignoring efficiency considerations. At times it
appears that we would deliberately turn away
from a project if it were found to rank high on
efficiency grounds.
Perhaps the best example of such policy
making is when we withdraw our assistance
from countries like Brazil at the very time
that our past investments have the potential
for a high pay-off. Such failure to capitalize
on our past investments seems quite short
sighted. Moreover, it amounts to viewing an
economy in the narrow perspective of its own
limits, and failing to see how it fits into the
larger world economy. In light of the scarcity
of resources available for international de-
velopment, it would seem proper to apply
the efficiency criterion to our developmental
investments in order to consider the marginal
rate of return, despite our ultimate interest
in equity.
A Food and Agriculture Policy?
Much has been written and said about the
need for a food and agriculture policy; some-
thing that goes beyond a narrow focus on the
production sector alone. The case for such an
approach is clear, despite the stresses and
strains which it causes. There are problems,
however, both in articulating what a food and
agriculture policy involves, and in managing
the political and policy-making challenges
which it presents. Let me make a few com-
ments on each problem.
The distinguishing characteristic of a food
and agriculture policy is that it covers the full
range of activities from the consumption of
food, through processing and distribution ac-
tivities, production, and the supply of inputs
to all sectors considered. Viewed domesti-
cally, a food and agriculture policy would
cover what is often referred to as the food
chain. But to be complete it should include
the trade sector as well, since even a major
agricultural exporter such as the United
States imports an important share of its food
consumption.
Clearly the articulation of such a policy is
more difficult than a narrow focus on agricul-
ture alone. In the first instance it means that
consumer interests become an important pol-
icy issue. The regulatory aspect of consumer
policies has, of course, been an important
source of controversy in recent years, as has
been the difficult challenge of attempting to
account for nutritional considerations.
But a properly defined food and agricul-
ture policy involves more than just adding
consumer interests to producer consid-
erations. It involves a consideration of the
product marketing chain, with all the recent
issues that have been raised about concentra-
tion ratios and possible anti-trust actions. It
involves the ever-more important supply in-
dustries. And it involves consideration of
trade.
Agricultural economists have long recog-
nized the importance of taking this broad
perspective, even though often the case is
made more from the standpoint of develop-
ing their own employment opportunities
than from any notion that it would lead to
sounder policy. But a food and agriculture
perspective has now become a political im-
perative. Both the 1973 and 1977 legislations
were titled the Food and Agriculture Act,
with all its implications. Moreover, that legis-
lation was passed in each case as a result of a
political coalition of consumer, labor, and ag-
ricultural interests. Even if policy makers
were inclined to resume a narrower producer
perspective, it would not be possible.
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