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Mark Brady. Photo.

Mark Brady

Policy officer

Mark Brady. Photo.

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

Author

  • Ronggang Cong
  • Mark Brady

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.

Department/s

  • Centre for Environmental and Climate Science (CEC)
  • AgriFood Economics Centre, Lund University School of Economics and Management
  • BECC: Biodiversity and Ecosystem services in a Changing Climate

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