WHO DETERMINES FARM PROGRAMS? AGRIBUSINESS AND THE MAKING OF FARM POLICY

Political-economic analyses of the causes and consequences of agricultural commodity policies typically emphasize farmer and consumer (taxpayer) interests and underplay the role of agribusiness. A more complete understanding of agricultural policy requires paying attention to the important role of agribusiness interests. Policies that benefit farmers (e.g., price supports, supply controls, deficiency payments) may either enhance or reduce agribusiness profits. The type of policy instrument preferred by agribusiness varies among commodities, depending on the technology of the marketing processes beyond the farm gate and the elasticity of final demand. This paper emphasizes the idea that instruments of farm policy are chosen in response to pressures from both agribusiness and farmers at the expense of taxpayers and final consumers.