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How to Design a Targeted Agricultural Subsidy System: Efficiency or Equity?

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Author

Summary, in English

In this paper we appraise current agricultural subsidy policy in the EU. Several sources of its inefficiency are identified: it is inefficient for supporting farmers’ incomes or guaranteeing food security, and irrational transfer payments decoupled from actual performance that may be negative for environmental protection, social cohesion, etc. Based on a simplified economic model, we prove that there is ‘‘reverse redistribution’’ in the current tax-subsidy system, which cannot be avoided. To find a possible way to distribute subsidies more efficiently and equitably, several alternative subsidy systems (the pure loan, the harvest tax and the income contingent loan) are presented and examined.

Publishing year

2012

Language

English

Publication/Series

PLoS ONE

Volume

7

Issue

8

Document type

Journal article

Publisher

Public Library of Science (PLoS)

Topic

  • Earth and Related Environmental Sciences
  • Economics

Status

Published

ISBN/ISSN/Other

  • ISSN: 1932-6203