ABSTRACT
Besides industry policy the major area of government regulation that came under intensified scrutiny in the 1970s was that of agricultural policy. Although in the 1970s the level of assistance to the agricultural sector tended to be less than that of the manufacturing sector (see Table 4.2) it was still quite substantial up until the mid-1980s. Extensive government assistance was given to the agricultural sector from the 1920s onward, and its nature was virtually unchanged up until the 1970s. Over the whole of this period there was a substantial long-term reduction in the terms of trade faced by the farm sector. That is, the ratio of output prices to input prices faced by Australian farmers declined. This decline in the terms of trade occurred at the same time as there was considerable government intervention aimed at boosting the incomes of the farm sector. The inability of these measures to stop the long-term decline in rural incomes eventually led to a questioning of their desirability during the 1970s at the same time as inquiries began into the tariff protection granted to manufacturers.
