The Hunger Law: the origins of grain protectionism (1889-1914)

Abstract

In the wave of agricultural protectionism which swept Europe in the late 19^th century, Portugal distinguished itself with legislation which was both innovatory and highly effective in defending cereal producers from foreign competition. Prices rose and became steadier, and output increased considerably. To a large extent, the protectionist laws of 1889 and 1899 were the result of a campaign promoted by large southern landed interests which were also those who stood to gain the most by them. Although politically influential, they were able to achieve their ends only because protectionism for wheat was the readiest cure for the nation's economic ills, namely a widening balance of payments deficit and a growing burden of foreign debt. The political establishment was receptive to measures which involved expanding domestic wheat production, thereby reducing an important item of the import bill. The milling industry was not harmed by these changes because meanwhile it was undergoing technological advances which more than enabled it to absorb the higher cost of raw materials. For this reason also the government was able to impose a ceiling on bread prices during a period of higher wheat prices. The cost of bread remained dear by foreign standards but the so-called Hunger Laws did not make it any dearer than it had been before. Grain protectionism not only made the Alentejo definitely the breadbasket of Portugal but also led to a considerable reduction of wasteland. It permitted the spread of chemical fertilisers and encouraged the rise of productivity. Nevertheless, although rents and profits rose somewhat after the 1889 legislation, the gains made by landlords and farmers were less spectacular than has been supposed. A larger slice of the increased revenue went to labour and the producers of fertilisers.