The paper "Agricultural & Development Process" is a great example of a report on agriculture. The governments of today’ s developed countries distort their economies by protecting their farmers. Governments of developing countries, by taxing their farmers heavily, distort their economics even more. The explanation for this apparent tendency is just emerging. Since comparative analysis of agricultural pricing began in the 1970s, analysts using postwar data have revealed two patterns: the developmental pattern, according to which the more advanced the nation, the more its government favours agriculture and the anti-trade pattern, according to which governments tend to tax exportable good agriculture and protect import competing agriculture. The developmental pattern implies that successfully developing nations will drift toward subsidizing agriculture, although the record does not point to an obvious ending point in the most advanced nations.
The anti-trade bias implies that policy will dampen comparative advantages the world over, cutting dependence on and gains from international trade in agricultural products. Both patterns seem to conflict directly with economists’ models of efficient resource allocation. But research on this issue is relatively new and cuts across several disciplines, not just economics, extending well beyond traditional agricultural policy analysis. For each product, there was a rough upward slope relating net protection to GNP per capita around 1980.
In this international cross section, the slope is due almost entirely to the discrete jump in (Nominal protection Coefficient) NPCs across the income gap separating developing from developed countries. The raw correlation between NPC and GNP per capita is insignificant among developing countries. It is also lacking among developed countries, partly because two high-income nations, Canada and the United States, were relatively unprotective agricultural-exporting nations in 1980.
But there does seem to be a difference between the two groups of countries. No industrial country has resisted the pressure to subsidise its producers of importable goods, though the North American and Australasian governments have kept fairly neutral toward their exportable agricultural products. A food-commodity pattern also exists, but is hardly mentioned by the literature. The general ranking by NPC for 1980 is Milk, beef, sugar, grains, chicken, eggs, and pork (From the most to the least).
Timmer C.P. (1991). “Agriculture and the State: Growth, Employment, and Poverty in Developing Countries”, Ithaca, NY: Cornell University Press.
Boestel J., Francks P. & Kim C.H. (1999). “Agriculture and Economic Development in East Asia: From Growth to Protectionism in Japan, Korea, and Taiwan”, London: Routledge.
Samuelson P.A., Nordhaus W.D (1998), “Economics” (n.p.).