The Political Economy of Agricultural and Food Policies

Description

Political economy models of agricultural and food policy often consider “producers”, “consumers”, and “taxpayers” as the main agents to study the impacts of policies, the political incentives, and the impact on policy outcomes. One (theoretical) reason is its didactic use, that is, to avoid unnecessary complications in deriving policy effects and identify equilibria. Another (empirical) reason is the absence of disaggregated information of policy impacts on various agents within (or outside) the value chain. It is, of course, well known that in reality many more agents are affected—and also play a role in lobbying governments to introduce or remove certain policies. In agricultural and food policies “other agents” include input suppliers (such as landowners, seed and agro-chemical companies, or banks), traders, food processors, retail companies, environmental and food advocacy groups, and so on. These agents may be differently affected by policies, depending on the nature of the policy (e.g. whether the policy is targeted to the (raw) agricultural commodity or to a processed commodity)—or whether farm subsidies affect land or other production factors. As a consequence, these different agents have sometimes joined forces (“political coalitions”) with farmers or with final consumers to influence policy-makers in setting public policies. In other cases they have opposed each other on policy issues.