Commodity Programs: Discussion

Abstract

Some years ago, R. G. D. Allen was invited to the United States as a discussant of several papers on the subject of index numbers. Somewhat to the chagrin of his sponsors who had underwritten his transatlantic airline fare, his sole comment was to the effect that he had read the papers, was favorably impressed, and that the authors should continue their good work. I might best serve the purpose of this session by similar brevity! The two prepared papers deal with two important facets of contemporary agricultural policy issues: (a) instability and its sources, (b) the distribution of benefits flowing from commodity programs. Each confirms some generally held impressions; e.g., export variability was the dominant source of instability in total utilization of grains and oilseeds in recent years; the distribution of benefits of agricultural subsidies are unevenly distributed and tend to favor the relatively larger producer. Each contains some surprises, at least to my intuition; e.g., only recently has the need to undo certain consequences of abundance been used as an argument for intervention in commodity markets. Although the variability in aggregate net farm income has been sharply higher in the 1970s than in the 1960s, variability has not been appreciably higher in the latter half of the 1970s than in the two decades after World War II.