Grain Duty

a duty imposed on imported grain and grain products.

Duties and quotas on imported grain and grain products have served as fundamental political and trade tools of agrarian protectionism in the industrially developed capitalist countries. In the formative years of capitalism the bourgeoisie pursued a highly protectionist policy. One of the first countries to introduce grain import duties was Great Britain (see). Under the advanced industrial capitalism of the mid–19th century, the transition to a system of free trade brought about a sharp reduction in grain duties first in Great Britain and then in the Netherlands (1847), Denmark (1848), Belgium (1850), and Germany (1857). In Great Britain duties on grain products were abolished in 1846.

In the imperialist stage of capitalism grain duties were raised again in a number of countries. The world economic crisis of 1873, the decline in agricultural prices, and the growth of competition from overseas suppliers of cheap grain gave rise to an increase in grain duties in such countries as Germany (1879), Italy (1883), and France (1885).

The world economic crisis of 1929–33 led to intensified protectionism in many grain-importing countries. Grain duties were abolished in most countries during World War II, only to be reestablished at high levels in the early postwar years. When a number of countries, including the USA, Great Britain, France, and the Federal Republic of Germany, subsequently lowered their import duties, another barrier appeared—the compensatory import levy, which is in fact a covert import duty. The amount of the levy varies according to the ratio of domestic prices to world-market prices. Providing more flexible protection against outside competition than does a grain duty, the compensatory import levy is the principal tool used by present-day agrarian protectionists. It has been widely employed in Western Europe since the formation of the European Economic Community (EEC), which applies it to all cereal imports. Australia, Sweden, and Switzerland also use compensatory import levies for cereal imports.

Grain export duties, used primarily for revenue purposes, were abolished in most countries between 1850 and 1870.