Lessons from a Comparison of United States and Canadian Farm Policy Approaches

Abstract

Professor Johnson's unpublished paper entitled "Income and Resource Effects of Canadian and United States Farm Policies: A Comparison" demonstrates that the policies followed in Canada until 1958 were quite satisfactory compared to those pursued in the United States. Canadian costs have been far lower regardless of the method of measurement; changes in Canadian farm incomes over thirty or more years have been just as favorable; and Canadian resource adjust ments have been by economic standards more desirable than those of the United States. The last point is particularly clear in the case of the wheat economy and in the relatively greater expansion of livestock production. The emphasis in Canadian farm policy has been on production payments, for example, feed freight assistance, prairie farm rehabilitation—a farm de velopment program—prairie farm assistance—a crop insurance scheme—and premiums on high grade hogs. These contrast with parity payments and attempts at restriction of output in the United States. While desirable resource adjustments have been made in Canadian agriculture, returns per farm and per worker are substantially lower than those prevailing in the United States and only half those in nonagricultural occupa tions. Thus the challenge to farm policy is greater in Canada than in the United States, and political pressures demanding a more aggressive approach to the farm income problem become stronger each year.