Economic and financial section > Considerations on the present evolution of agricultural protectionism

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For social, historical and psychological reasons, the preservation of agriculture
appears to the majority of countries as an absolutely vital question, and one which
cannot be considered as a purely economic problem. The peasant class, which is an
element of order and stability and an admirable reserve of energy, forms, at any rate
in the countries of the Old World, the basis of the social edifice, and plays an essential
part in reconstituting and rejuvenating the physical strength of generations worn out
by life in industrial and large urban centres.
All countries indeed, even the most strongly industrialised, consider it necessary to
support their agriculture, which, moreover, in every case occupies a great part of the
population. Even when, as in England, it represents a small minority, it nevertheless
constitutes one of the chief categories of producers, and that is why, provided that no
excesses are indulged in, which would defeat their own ends, a Government can hardly
be criticised for endeavouring to maintain the rural classes at a reasonable level of
prosperity in order that they may continue to exercise the important part which they
play in the national life.
Even the agricultural exporting countries cannot but regard such an aim with
sympathy.
Furthermore, it would be impossible in practice to neglect the special interests of
agriculture out of regard for principles of pure economics, in view of the enormous
political force which it represents in every country, irrespective of climate, development
or system of government.
It would therefore show little sense of reality to endeavour to apply free-trade
principles to agricultural problems and to plead in favour of the abolition of any form
of protection.
The only practical aim which we can set before us is to determine what are the
limits which should be placed on this form of mutual social aid in order to prevent it
from becoming harmful to the normal development of international economic relations
and to ensure that it shall not involve any loss for the nation which practises it or,
ultimately, for the farmer himself.
III.
One of the most cogent economic arguments, and one frequently adduced, in favour
of agricultural protectionism is that of the “ scissors ”—that is to say, the disparity at
any given moment between agricultural and industrial prices. While recognising the force
of this argument, it must not be forgotten that a certain disparity between these two
categories of prices may be regarded as normal. It would only be possible to lay down
that the two price regimes must be absolutely equal if either the agricultural producer
were forced to purchase on the market all that he required to feed his family and to pay a
rent such as is paid for a house in an urban settlement, or if the industrial worker were
able to obtain both these requirements on the same conditions as apply to the farmer.
But this, notwithstanding the disparity between agricultural and industrial prices,
is the mark of a very serious state of disequilibrium which operates to the detriment of
the agricultural producer when unduly accentuated, as it is at present. On the one hand,
the expenses of the agricultural producer are greater than they were before the war. On
the other hand, the exchange value of agricultural products has fallen in a few years by
more than half, and the fall in prices has been infinitely greater in the case of agriculture
than in that of industry.