| The development of theory on agricultural income problems springs from empirical investigations showing that agricultural income is unstable over time, and that compared to other trades, it is diminishing. The theorists explain this with the fact that agricultural production factors are relatively rigid, due to lack of alternative application. This in turn means that the necessary adjustment to changes in relative pricing takes place too slowly. One solution would be an improvement to the alternative application of agricultural production factors, through structural policies. The Common Agricultural Policy, which among other things is founded on targeted incomes, works with price policy as a main means, not structural policy. This paper justifies this... |
