In general, agriculture is a basic and strategic sector of the national economy; therefore, the need for explicit study of agricultural policy easily becomes apparent.
Agricultural policies can be classified in several ways, depending on their objectives, the instruments used, and the commodity system they are primarily focused on, etc.
The three broad groups that agricultural policies
are classified into by government are price, structural and marketing policies.
The
study of agricultural policy has become an essential part of every government sequence
in agricultural economics and extension, and it is not an exaggeration to say
that it is an essential part of every economist and rural development expert.
This is because of the importance of agricultural policy to economic development of a nation. Policy is defined as the course of action chosen by government towards an aspect of the economy, including the goals that the government seeks to achieve, and the choice of methods to pursue those goals that have to be justified.
Agricultural policy is a term which is collectively used for a
bundle of policies related to the agricultural sector.
Conceptualization of Public Policy
Agricultural
policy represents a sub-sector of economic policy. It should be noted from the
onset that our primary concern here is with public agricultural policies, as
opposed to private policies of agribusiness firms, individuals or groups.
Public
policies are made by governments, ministries, departments and agencies (MDAs)
that is, public institutions, in the process of executing their mandate, while
private policies are made by private entities, enterprises or individuals.
The
term 'policy' refers to a plan of action to guide decisions and achieve
predetermined goals. It may apply to any public or private sector institution
or organization, groups, individuals. Here, we discuss the concept of policy
only in context of public (government) policy.
It
comprises the actions of the government and the intentions that determine those
actions. Policy is defined as the course of action chosen by government towards
an aspect of the economy, including the goals that the government seeks to
achieve, and the choice of methods to pursue those goals.
It
is also defined as a set of interrelated decisions by a public actor or group
concerning the selection of goals, and the selection of the means of achieving
them within a specified situation, where those decisions should in principle, is
within the power of the actor or group to achieve.
The
three important points are clear from the definition.
1.
Policy is concerned with both the selection of the means of attaining such
goals.
2.
Policy-making is done within the framework of an institution so that it could
commandeer the necessary resources and authority for its implementation.
In
fact, all public policies are made by public institutions to realise their
mission. In this regard, it should be pointed that not all decisions of
government or public institutions are part of public policy. Only those
decisions that are of a strategic of guideline nature are covered by the term policy‘.
3.
Those setting policies must have the mandate or responsibility to do so.
Bearing these in mind, agricultural policy can be conceived of as a series of
interrelated decisions taken by governments and their ministries, departments
and agencies (public institutions) concerning the selection of goals for the agricultural
sector and the means of achieving them from available alternative strategies,
which are intended to guide present and future actions (and inactions) in the
sector.
Usually,
policies are set for the different sectors of the national economy to promote
optimum utilization and canalization of the nation‘s resources; and the agricultural
sector is one of the leading sectors of any economy.
Policy
represents the intentions and plans of action‖ of the policy-maker which are
often reflected in programmes, and projects.
In
fact, the successful implementation of a policy requires that a programme or
package of decisions, activities, projects or schemes be designed. Necessary
resources will then be appropriated for such programmes and projects to ensure
their execution and the realization of policy goals.
The need for budgetary appropriations to ensure policy realization cannot be over-emphasized.
Policy represents hard pattern of resource allocation
represented by programmes and projects designed to respond to perceived public
problems or challenges requiring governmental action.
What is Agricultural Policy?
Agricultural policy is a statement
of action and a fundamental tool employed in achieving agricultural development. A programme, on the other hand is a comprehensive plan that
includes objectives to be attained, specifications of resources required and
stages of work to be performed.
Agricultural
policy is government’s intentions, ambitions, and goals for agricultural sector
and the means for attaining such goals given available resources, technologies,
preference patterns, and institutional capability.
The
importance of studying agricultural policy lies in its potential for promoting
problem-solving interventions and skills in the sector, influencing future
course and directions of policy, and in general improving capacity for better
prescriptions and advocacy of solutions and strategies in the sector.
Also,
the survival of the national economy depends on the provision of foods and raw
materials which often require the investment of public resources that have to
be justified.
Agricultural
policy is a term which is collectively used for a bundle of policies related to
the agricultural sector.
It
may comprise a number of policies, such as land tenure and land reform policy,
price policy, trade policy, marketing policy, credit policy, crop insurance
policy, water policy, food policy, fertilizer policy, farm power policy, etc.
These
policies are framed by the government to achieve the specific goals related to
the farm sector. As agriculture in the developing countries is a state subject,
apart from the national agricultural policy, state governments also prepare
their own agricultural policies and also regulate the supply of various
agricultural products through some rules, acts and regulations.
Types of Agricultural Policies
Markets
and production methods sometimes lag behind requirement of the time, and in the
absence of intervention, farmers are subject to low and fluctuating incomes.
In
developed countries, there is the tendency of rapid technology advancement to
cause production to rise faster than demand which lead to low prices and
income.
At the same time, biological nature of agriculture leads to unplanned fluctuation in production which causes sharp fluctuation in price and hence the farmers income.
In many developing countries on the other hand, the problem is that of
agricultural production lagging behind requirement.
To
deal with these problems, governments have policies in agriculture which can be
divided into three main groups:
1.
Price policies
2.
Structural policies
3.
Marketing policies
Let us look on details
1. Price policies
Agricultural
price policy is common with prices which the farmers receive for their product
(the farm gate price) and the prices at other stages in the distribution chain.
Attention is generally focused on farm gate prices and the individual policies
are generally concerned with stabilizing and frequently raising them.
Agricultural
price policies can be pursued either nationally or internationally. National
policies have used many methods such as tariffs or variable levies on import,
import quotas, subsidies, support buying, production control, statutory
marketing organization and various combinations of these. Policies of these
types which are generally protectionist in their effort are not confined to
agricultural products alone. Many countries give protection to manufactured
products.
In
most developing countries today however, the protection given to agriculture is
more comprehensive than that given to most industries.
Objectives
of price policies: In principle, price policies could be aimed at:
i.
Increase prices
ii.
Decrease prices
iii.
Stabilize prices
The
objectives are always related to more general economic growth and income
distribution objectives which can be reached by a combination of different
instruments on different markets.
2. Structural policies
Structural
policies are those designed to improve the structure of agricultural production
i.e. the size, layout and the equipment of farms as well as the rural
infrastructure, electricity and water supplies, educational and advisory
services and in a broad sense, social facilities in the country sides.
3. Marketing policies
Marketing
policies are concerned with changes in the distribution chains between farmers
and consumers, the objective which may be to strengthen the farmers bargaining
position by for example, encouraging the development of producers-controlled
marketing organizations or to improve hygiene or quality, or to reduce the cost
of marketing.
Analysis of Specific Agricultural Policies
Agricultural
policies can be classified in several ways, depending on:
i. Their
objectives
ii. The
instruments used
iii. The
commodity system they are primarily focused on.
We
will use the classification which classifies
policies in three categories:
1.
Policies that affect producer‘s incentives, which include:
i.
Output price policies
ii.
Trade and exchange rate policies
iii.
Other policies that influence incentives
2.
Policies that grant producers access to resources, among which we can identify:
i.
Food policy and food security
ii.
Land tenure policies
iii.
Water access policies and irrigation
iv.
Agricultural technology policies
3.
Policies that influence access to factors ‘markets, most importantly:
i.
Labour market
ii.
Credit market
Such
a classification is more in line with the modern view of government
intervention in the agricultural sector.
The importance of agricultural policy
In
general, agriculture is a basic and strategic sector of the national economy;
therefore, the need for explicit study of agricultural policy easily becomes
apparent.
More
specifically, agricultural policy is studied for the following reasons:
1.
To improve the management and use of resources in the agricultural sector in
order to attain stated objectives.
2.
The growth and contribution of the agricultural sector to the national
development is enhanced, and the welfare and well-being of farmers and rural
people promoted, when we understand and properly adopt the right‖ agricultural
policies.
3.
Agricultural policies are intended to resolve problems and challenges in the
agricultural sector, to the benefit of farmers and the society in general.
4.
To enable us analyze and understand the consequences of selected agricultural
policy in advance and hence institute appropriate mitigation measures to
contain unintended effect during implementation.
5.
It helps to build and improve the capacity for policy analyses in the
agricultural sector.
6.
Government intervention in the agricultural sector often entails the investment
of large chunks of public resources. There is therefore the need to ensure
proper harnessing of these funds to the greatest benefit of society, through
the right‖ agricultural policies.
7.
Agricultural policy analysis is also undertaken to ensure that the right policy
instruments are employed for the selected policy objectives.
8.
Policy result in a more orderly and predictable pattern of development of the
agricultural sector. This helps to promote both intra-and-inter-sectoral growth
stability.
9.
Policy guides the selection of programmes and projects and hence the pattern
and direction of resource allocation in the agricultural sector. In this
connection, it should be noted that policy is like a compass, which guides the
direction of government actions and interventions in the sector.
10.
Agriculture is a risk-prone and environmental-dependent enterprise. Therefore,
policy is needed to minimize the effects of uncertainty, variability in
environmental variables, and risk on performance and outcomes in the sector.
11.
Recently, increased attention to policy design in the agricultural sector
derives from the contemporary experience of partial attainment or outright
failure of policy in the area, with dire consequences for the teeming
population of food consumers, poverty-stricken farmers and input merchants in
the country.
12.
With economic development, agriculture faces increasing competition with other
sectors of economy.
Terms
of trade between agriculture and other sectors will likely decline in favour of
other sectors due to implicit production costs in agriculture. This will dampen
incentives for continued participation in the agricultural sector.
In
the absence of suitable policies to rebuild incentives for agricultural
production, the sector faces the unfortunate prospect of being neglected with
tremendous consequences for the survival and food security of the nation; the
worsening poverty for millions of poor farmers who depended on agriculture for
their subsistence.
Conclusion on
In this article you have learnt about the concepts of policy and agricultural policies, especially knowing the three major things that are necessary in explaining what policy is.
Therefore, at this end article, we believe you must
have understood the meaning of public policy and agricultural policy: The term
'policy' refers to a plan of action to guide decisions and achieve
predetermined goals. It may apply to any public or private sector institution
or organization, groups, individuals.
Policy
is defined as the course of action chosen by government towards an aspect of
the economy, including the goals that the government seeks to achieve, and the
choice of methods to pursue those goals.
Policy is concerned with both the selection of the means of attaining such goals. Policy-making is done within the framework of an institution so that it could commandeer the necessary resources and authority for its implementation.
In fact, all public
policies are made by public institutions to realize their mission.
Those
setting policies must have the mandate or responsibility to do so. Agricultural
policy can be conceived of as a series of interrelated decisions taken by
governments and their ministries, departments and agencies (public
institutions) concerning the selection of goals for the agricultural sector and
the means of achieving them from available alternative strategies, which are
intended to guide present and future actions (and inactions) in the sector.
Agricultural
policy is government’s intentions, ambitions, and goals for agricultural sector
and the means for attaining such goals given available resources, technologies,
preference patterns, and institutional capability‖.
The
importance of studying agricultural policy lies in its potential for promoting
problem-solving interventions and skills in the sector.
Agricultural
policy is a term which is collectively used for a bundle of policies related to
the agricultural sector.
We have introduced the types and importance of agricultural policies as well as done analysis of specific agricultural policies along the types. You have learnt: Types of agricultural policies, namely: Price policies, Structural policies, and Marketing policies, objectives of price policies: increase prices; decrease prices, and stabilize prices and classification of policies which classifies policies in three categories:
Policies that affect producer‘s incentives, which include: Output price policies; Trade and exchange rate policies; and other policies that influence incentives.
Policies that grant producers access to resources, among which we can identify: Food policy and food security; Land tenure policies; Water access policies and irrigation; and Agricultural technology policies.
Policies that influence access to factors markets, most importantly: Labour market policies and Credit market policies. Importance of agricultural policies.
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