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Two-Season Subsistence Farming, Urban Food Subsidies and Optimal Agricultural Policy

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Innes, Robert

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Abstract

This paper extends the household production literature by developing and analyzing a two-season model of subsistence farm choices wherein the two seasons correspond to times of planting and harvest. Qualitative properties of optimal farm production and storage choices are characterized. In addition, given a government policy of subsidizing urban grain consumption, the government's problem of choosing an optimal (welfare-maximizing) agricultural policy is developed. Under plausible conditions, the optimal policy takes a form that is often observed in developing countries, namely, farm output prices set below relevant international levels and price subsidies provided to farm inputs in both grain production and storage. Copyright 1993 by Royal Economic Society.

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Publisher Info
Article provided by Oxford University Press in its journal Oxford Economic Papers.

Volume (Year): 45 (1993)
Issue (Month): 4 (October)
Pages: 668-90
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Handle: RePEc:oup:oxecpp:v:45:y:1993:i:4:p:668-90

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  1. Hennessy, David A. & Roosen, Jutta, 2003. "Cost-Based Model of Seasonal Production, with Application to Milk Policy, A," Staff General Research Papers 10176, Iowa State University, Department of Economics.
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