4.6.3 Changes in policy goals

Supply driven policies
The recovery from the Second World War of the agricultural sector in Europe, the changes in the share of agriculture in national GDP and in the share of the workforce employed in agriculture in NAE have been described in Chapter 2 of this assessment. Initially the principal policy instrument used to stimulate production was price. Not only were price fixed at levels that would enable farmers to operate profit­ably but state support systems absorbed much of the risks of markets. When food production started to exceed national consumption, the memories of shortage and of the wide­spread rural distress of the 1930s meant that governments were unwilling to allow prices to collapse and the emphasis on retaining production capacity was retained and farmers were further helped by a variety of subsidies provided on inputs (OECD, 1967) (see Chapter 2).
     In both North America and Europe extension services played a major role in disseminating new technology and in moving farmers towards a more business orientated ap­proach to their activities. In the U.S. the Land Grant Col­leges played a major role. In Europe the emphasis was on services provided by the state or regional authorities, often operating in conjunction with farmer cooperatives. In the centrally planned economies of Central and Eastern Europe shortages remained a problem longer than in the west and production was encouraged through targets for delivery and the provision from regional centers of services such as machinery.
     In the development and uptake of new technologies the private sector played a major role (see Chapter 2) for the de­velopment of new inputs by seed companies, the agrichemi-cal industry as well as livestock breeders. The underlying science was global, often emerging from publicly funded re­search. Major international companies played an important role both in fundamental research and especially in turning new understanding into profitable products (ICI, 1978).

Market driven policies
The transition from concerns about shortages to problems relating to surplus was a gradual process and to a substan­tial extent the mechanisms that had been established to de­velop and apply new technologies in farming remained in place. Within the European Community the issue of sur­pluses increasingly dominated policy thinking from the late 1970s (see Chapter 2). The emphasis of policy swung from production to supply control and the use of devices such as quotas and set asides to limit the volume of output from EC farms.
     The impact of this on AKST was gradual. Substantial funds continued to be allocated to agricultural research and to extension. However, in several countries there was an increasing view that extension and research should be funded by the industry as was the case in other major sec­tors. Charges were made to farmers for extension services that related to increased profitability on the farm. In Eu­rope national extension services tended to be privatized. Research funding continued to come from the state but an increasing share was expected to be derived from levies on