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Impacts of direct government payments on US agriculture: evidence from 1960-2010 data

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  • Yang Zou
  • Qingbin Wang
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    Abstract

    Purpose – The purpose of this paper is to examine the impacts of direct government payments on agricultural production and exports in the USA. Design/methodology/approach – Alternative regression models are estimated using the time-series data of 1960 to 2010 from ERS/USDA to address the research questions. Findings – Regression results suggest that current direct government payments had negative influences on US agricultural production and exports, and the lagged influences were positive, but as a whole the impacts of direct government payments were very limited. Practical implications – Findings from this study provide useful information to agricultural policymakers in the USA, as well as other nations such as China. China may learn from the US experience in developing agricultural subsidies that are effective and allowed under WTO. Originality/value – While many agricultural trade disputes under WTO are related to the question of whether domestic government supports have boosted agricultural production and exports or reduced imports, this paper addresses the question based on empirical analysis.

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    File URL: http://www.emeraldinsight.com/journals.htm?issn=1756-137x&volume=4&issue=2&articleid=17031363&show=abstract
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    Bibliographic Info

    Article provided by Emerald Group Publishing in its journal China Agricultural Economic Review.

    Volume (Year): 4 (2012)
    Issue (Month): 2 (May)
    Pages: 188-199

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    Handle: RePEc:eme:caerpp:v:4:y:2012:i:2:p:188-199

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    Web page: http://www.emeraldinsight.com

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    Related research

    Keywords: Agricultural exports; Agricultural production; Agriculture; Direct government payments; Exports; Production capacity; United States of America; World Trade Organization;

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    References

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    1. Hubbard, R Glenn & Kashyap, Anil K, 1992. "Internal Net Worth and the Investment Process: An Application to U.S. Agriculture," Journal of Political Economy, University of Chicago Press, vol. 100(3), pages 506-34, June.
    2. Hennessy, David A., 1998. "The Production Effects of Agricultural Income Support Policies Under Uncertainty," Staff General Research Papers 1207, Iowa State University, Department of Economics.
    3. Harry de Gorter & David R. Just & Jaclyn D. Kropp, 2008. "Cross-subsidization Due to Inframarginal Support in Agriculture: A General Theory and Empirical Evidence," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 90(1), pages 42-54.
    4. Robert Innes, 2003. "Crop Insurance in a Political Economy: An Alternative Perspective on Agricultural Policy," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 85(2), pages 318-335.
    5. Lambert, Dayton M. & Sullivan, Patrick & Claassen, Roger & Foreman, Linda F., 2006. "Conservation-Compatible Practices and Programs: Who Participates?," Economic Research Report 7255, United States Department of Agriculture, Economic Research Service.
    6. Westcott, Paul C. & Young, C. Edwin & Price, J. Michael, 2002. "The 2002 Farm Act: Provisions And Implications For Commodity Markets," Agricultural Information Bulletins 33745, United States Department of Agriculture, Economic Research Service.
    7. Anonymous & Hopkins, Jeffrey W., 2003. "Decoupled Payments: Household Income Transfers In Contemporary U.S. Agriculture," Agricultural Economics Reports 34057, United States Department of Agriculture, Economic Research Service.
    8. C. Edwin Young & Paul C. Westcott, 2000. "How Decoupled Is U.S. Agricultural Support for Major Crops?," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 82(3), pages 762-767.
    9. Ahearn, Mary Clare & Collender, Robert N. & Diao, Xinshen & Harrington, David H. & Hoppe, Robert A. & Korb, Penelope J. & Makki, Shiva S. & Morehart, Mitchell J. & Roberts, Michael J. & Roe, Terry L. , 2004. "Decoupled Payments In A Changing Policy Setting," Agricultural Economics Reports 33981, United States Department of Agriculture, Economic Research Service.
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