Catalogue description Records of Agricultural Economics

Economics Divisions

The Ministry of Agriculture, Fisheries and Food and its predecessors have had a number of economics and economic policy divisions dealing with such matters as economic intelligence, general studies of agricultural economic problems, farm subsidies and price guarantees. An Economics Division was first set up after the First World War. Between the wars the division comprised a variable number of branches discharging a wide variety of duties, some of which, such as those dealing with marketing and labour, were removed to form separate divisions. Those activities relating to specifically economic questions, were closely allied to the Ministry's statistical work, usually performed by a Statistics and Economics Branch. This dealt with the general investigation of economic problems affecting agriculture, the collection of information about the economic position of agriculture, inquiries into production costs and the general economics of farming.

During this period the ministry administered, either through the Marketing Division or through statutory commissions, a variety of government subsidies for different farm products. These grew up in piecemeal fashion, beginning with the sugar beet subsidy in 1925 and later extending to wheat, administered by the Wheat Commission, cattle and sheep, administered by the Livestock Commission, milk, barley, oats and bacon pigs. During the Second World War these activities lapsed, being superseded by the trading and rationing activities of the Ministry of Food, though the Ministry of Agriculture and Fisheries remained responsible for a system of acreage payments in respect of potatoes, wheat and rye grown in England and Wales. The reduced Economics Division was absorbed into broader Statistical, Economics and Trade Relations (to 1942) and Economics and Statistics (1942-1955) Divisions.

The Agriculture Acts 1947 and 1957 introduced schemes to provide guaranteed prices and assured markets for cereals, fatstock, wool, eggs, milk, potatoes and sugar beet, most of them based on discretionary payments. The schemes for milk, eggs, wool and potatoes were operated through produce marketing boards. In addition to price guarantees for produce the ministry made various 'production grants' or subsidies to farmers and landowners during and after the Second World War with a view to encouraging operations such as the ploughing up of grassland and the liming and drainage of agricultural land to increase output and efficiency. The level of price support was determined by the annual farm price review begun during the war and established on a statutory basis under the Agriculture Act 1947. Price support measures continued until the UK joined the European Economic Community at which point they were subsumed in the Community's Common Agricultural Policy, administered either by the ministry or the Intervention Board for Agricultural Produce. Price support was managed by the following divisions: Agricultural Guarantees (1957-1964); Agricultural Guarantees and Labour (1964-1965); Economic Policy I (1965-1968); General Agricultural Policy I (1968-1977).

The ministry was also involved in schemes to improve the management of farms. The Marginal Production Scheme started in 1949 provided grants towards the cost of goods and services to farmers whose profit margin was to allow investment in improvements. This scheme was replaced by the Small Farmer Scheme, set up under the Agriculture (Small Farmers) Act 1959, which was designed to improve the economic efficiency of farms. Grants were made on the basis of business plans agreed between the farmer and the department. The emphasis on management efficiency was continued by the successor Small Farm (Business Management) Scheme, which continued until 1970. Farm management and economic aspects of farming, including price support, were handled from 1958 by a separate Agricultural Economics Unit (from 1959, Division). The unit's earlier responsibility had been the detailed analysis of statistics supplied by the Statistics Divisions and, (before 1955), the Ministry of Food, and the Scottish and Northern Irish agriculture departments.

The Economics and Statistics Division was split in 1955 following the formation of the Ministry of Agriculture, Fisheries and Food, the Economics Division being reduced to an Agricultural Economics Unit (1957, Division from 1959). In 1965 the division was renamed Economics Division, and in 1967 it was split, Economics Division I handling the economics of farm business, farm incomes, rents, land prices and wages, while Economics Division II dealt with international aspects of agricultural economics.

Since accession to the European Economic Community, EEC matters and agricultural support policies have been dealt with by European Economic Community Divisions and the Agricultural Support Policy Division. An Economics Division III was formed in 1975 to handle economic assessments, general land economics, econometric modelling for food and agricultural subjects and investment appraisals. In 1984, the three Economics Divisions were re-named: Division I became the Economics (Farm Business) Division; Division II the Economics (International) Division; and Division III the Economics (Resource Use) Division. In 1995 the first two divisions were renamed Economics and Statistics (Farm Business) Division and Economics (International and Food) Division, having taken on responsibility for the IT strategy for the whole economics and statistics group and for giving economic advice on the food and drink industry respectively. This latter responsibility had been handled by the Economics and Statistics (Food) Division, which had its origins in the Food Economics Unit. This was established in 1973 to deal with economic questions relating to food and drink distribution, and consumer demand for and expenditure on food and drink. The unit became the Economics and Statistics (Food) Division in 1984, covering in addition to its earlier functions the National Food Survey and questions of the total United Kingdom food supply and self sufficiency. It was wound up in 1995 when those functions that were not inherited by the Economics (International and Food) Division passed to the Statistics (Commodities and Food) Division.

Some aspects of the economics of agriculture, such as national economic planning, rateable values of farmland, the community charge, energy and credit policies, have been dealt with by the Agricultural Resources Policy Division. This also had specific responsibility for such issues as horses, organic farming, employment, wages, training and safety, deregulation policy and the Open Government initiative. The division was created in 1977 out of the earlier General Agricultural Policy Division I.