Instrumental Distortions: Swedish Agricultural Policy

During an international crisis securing the domestic supply of food is very important. Swedish agricultural policy during the postwar period provides a good example of how instrumental distortions (distortions that are deliberate policy measures) may be introduced into an economy to protect it against loss of the possibility of importing food. The reasoning developed presently is of relevance also for a number of other Western countries. The agricultural sector has for different reasons been sheltered from international competition (e.g., in order to secure the national provision of foodstuffs, to guarantee ‘fair’ incomes for the farmers or to reduce the exodus of workers from the primary sector when the rest of the economy cannot absorb them).