Establishment of the Rational Crop Rotation System and Limitation of the Price Policy and the Income Policy for It

Abstract

　In this paper, the price policy and the income policy to establish the rational crop rotation system are discussed. At first, consumers' surplus and producers' surplus do not always increase when the above system is adopted in place of the usual cropping system based on market price, because the usual market equilibrium point cannot be achieved under the crop rotation system. And the price policy is problematic in that it is very difficult to decide appropriate price ratios among crops under the crop rotation system. In order to decide the ratios, it is necessary to ascertain the production-possibility frontier curve of each farm correctly ; but this is not possible. On the other hand, the income policy has a problem, too. Under the income policy, it is difficult to ascertain the past realizable income level of each farm. Unless the income level can be grasped, unintended governmental expenditure becomes necessary.
　These policies are thus not effective in establishing the rational crop rotation system. In order to improve farms, technological development is very important. Under this development, producers' surplus definitely increases, Therefore it is important for farm business administration to focus on technological development.