Judging agricultural policies: a survey

This survey provides a structured picture of 40 years of literature which uses welfare economic tools to judge agricultural policy. Challenges and developments of normative agricultural policy analysis are discussed in an easily accessible graphical framework. It is shown how the literature has gone from examining a very small discrete set of simple policies to a much broader (often continuous) set of policies that combine policy instruments simultaneously. The importance of the Pareto criterion, used to explore the limits of how government can affect welfare, is revealed. Moreover, given the importance of the objective of income redistribution in agricultural policy, agricultural economists have often departed from the purely efficiency‐oriented tradition in economics. It is shown that they have tried to incorporate equity considerations by either adding these criteria as constraints to the social welfare function, or directly incorporating these criteria in the functional form of the social welfare function.