ECONOMIC

Structural problems. Agreements on a set of rules regarding cyclicallyrelated trade measures can be separated from negotiations designed toreduce agricultural trade barriers arising from structural differences betweenthe farm sector in one country and another. While most governments arecommitted to preventing agricultural prices from falling below or risingabove accepted levels, these levels differ between one country and another.Under conditions of free trade, however, market prices in different countrieswill generally not vary by more than the cost of transportation. To the extenttherefore that one country wishes to support a market price that is eitherlower or higher than in other countries, it has to impose some limitation ontrade flows. If agricultural trade barriers are to be reduced, countries willneed to find some means to reduce the differences in market support prices.An approach to agricultural negotiations. International negotiations onagricultural trade are timely because many foreign governments are in theprocess of reassessing their agricultural policies in response to considerablepublic dissatisfaction with the results of current agricultural programs. Duringnormal times, changes in existing programs would be difficult to negotiateeven if no economic interest were seriously affected. At a time whenchange has become inevitable, it is far easier to work out a greater harmonizationof national approaches to agricultural problems.These negotiations need to be approached in a fairly pragmatic manner.It would be impractical, as some have suggested, to negotiate tight internationalagreements regulating prices, production, inventories, and tradecontrols on individual commodities. On the other hand, governments will bereluctant to increase the dependence of their consumers on imports and thedependence of their producers on exports, without some agreement on theavailability of such imports when food is in relatively short supply and theaccessibility of such exports to foreign markets when food is in relativelyexcess supply. Undoubtedly some degree of international understanding onthe use of trade controls relative to domestic measures will be required. Aspart of such an international understanding, it may be desirable to achieve abetter coordination of those internal policies which are undertaken to moderateextreme fluctuations in food supplies and prices.Better international understandings on improved access to supplies as wellas access to markets should persuade countries on their own to undertakemore of the long-term changes in their agricultural programs that wouldresult in more efficient patterns of worldwide production. Important insuch long-term reforms would be the adjustment of relative prices amongfarm products. Another element could be a greater shift toward more directmethods of supporting farm incomes while allowing prices more room todecline during bumper crop years.216