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Abstract

Most empirical efforts to evaluate the effects of government policies on agriculture have considered policies applied to specific commodity sectors. The results have been the construction of a number of highly specialized sector models which ignore cross-sector policy effects. This paper presents the results of an attempt to construct an aggregate model of agriculture which considers jointly all major agricultural policies implemented over the last 3 decades. The results indicate that government intervention in agriculture generally reduced farm income and production below what it would have been; lead to lower food prices, benefitting consumers; and constrained capital for labor substitution. Government programs did lead to greater price stability, however, which was a basic objective of agricultural programs.

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