HORTICULTURE IN THE EEC: POLICY FROM FIRST PRINCIPLES
Welfare and price instruments of policy are separate: governments tend to confuse long-term issues by using price as a welfare instrument, for short-term advantage. Sooner or later welfare instruments applied to holdings become paramount. Price-and structure-policies have only indirect effect upon efficiency in the industry, but an ideal distribution of efficiency has not yet been formulated.
In the EEC, the traditional over-response to price by producers is in evidence, although at different stages in the ornamentals, the vegetables and the top fruit sectors separately. The nub of the problem is a marketing convention which keeps prices in line with supply. Producers would benefit most from a framework constraining them to regulate supply. This is the general case. In its present state the top fruit sector is a special case; and appropriate action on the holdings has been slow.
The extra protection to be anticipated from the new regulations proposed for horticulture as a whole in the EEC will serve a good economic producer's net income.