AGRICULTURAL POLICY AND INNOVATION

In principle, the Group regards long-run market forces as the best guide to resource allocation, not only within existing production units, but also between sectors. However, in practice they perceive many instances of market failure in the rural sector which justify government intervention either on efficiency grounds or on equity grounds. They aggregate these intervention/assistance measures into sets and devote a chapter to each set. The new, novel and controversial aspects of assistance are highlighted in these comments. The Group discussed price support and underwriting schemes, input subsidies and related issues, natural disaster relief, income tax averaging, product promotion and export inspection services in Chapter 5 and research, extension and education in the context of innovation in Chapter 9.