The Ottawa Agreements and English Agricultural Policy(PAPERS READ AT THE AUTUMN CONFERENCE SYMPOSIUM, 1993 -Reorganization of Capitalism in Europe during the Interwar Period)

Abstract

English corn producers in 1920's experienced the severe depression. Yet no political party was ready to propose the direct state aid to farmers. In the early 1930's expected role of agricultural policy changed drastically. The Wheat Act of 1932 revived the deficiency payment to the wheat producers, while Agricultural Marketing Act of 1931 and 1933 tried to uphold the prices through the organisation of the producers. The emergence of these new approaches toward agricultural policy was closely connected with the change in the trade policy. This article tries to make clear the strategies which caused the transformation in both agricultural policy and trade policy. The ideas which lead to the formation of the preferential tariffs in 1932 were not the simple theory of international division of labour in which industrial Britain exchanges the manufactured goods with the agricultural products of the Dominions. Negotiators at Ottawa had hidden motivations. Protectionists in the Conservative Party were unique in proposing an unorthodox economic thinking. They won popularity among the industrial organizations such as Federation of British Industries in the early 1930's. Their economics set the highest value on forming the self-sufficient national economy. Since Great Britain imported great amount of food, their main target was to support the rivival of rural Britain and promote the import of food from the Dominions until Britain could attain the self-sufficiency in staple agricultural products. Hence their programme of subsidizing British agriculture and promoting intra-Empire trade emerged. The cabinet, under the influence of Keynes, gave their support to the policies which would redress the adverse effect of inelasticity of wage movement. This economic thinking as well as the theory of national economy, was responsible for the formation of the agricultural and trade policies.