Discussion: Canadian and U.S. Agricultural Price Policies

Abstract

ducers and has resulted in greater price competition of both Canadian and U.S. livestock industries with those in third countries. This moves the United States and Canada into more directly competitive roles in feed grain exports and, to a lesser extent, in exports of livestock products. The broader implication of recent trends in policies and programs is that they tend to improve general welfare in both countries. Reduced prices for farm inputs, a topic which was not covered in these two papers, have been allowed to exert their effect on output. The governments of the two countries have moved-and apparently will move further-to aid the low-income segments of their economies, both in agriculture and outside agriculture, with direct action programs rather than with programs that attempt to alter the price system to subsidize selected producer groups. This is a move long advocated by most economists and, in my opinion, long overdue in the agricultural sphere. The middle ground in price is hard to hold against political forces that favor more free enterprise or those that favor more stringent government controls. The political power of agriculture is still substantial, and it takes skillful management to avoid price-depressing surpluses without becoming involved in food-export policies that promise too much aid and are too generous to be maintained over the long run. Although the United States and Canada have critical roles to play in alleviating world food shortages, they have even more significant roles to play in helping people in other countries to develop their own economies. Important steps are being taken in education and economic development, and the agricultural progress of both countries has become more consistent with these objectives. All this supports McCalla's closing comment that policy decisions taken in Washington are vital to the welfare of Canadian farmers. This can be stated more generally by saying that the decisions taken in Washington are vital to the welfare of many countries. Market developments and programs of the past few years have opened new alternatives and, fortunately, some important steps have been taken in the right direction.