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The Local Impacts of Agricultural Subsidies: Evidence from the Canadian Prairies

Author

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  • Ray D. Bollman
  • Shon M. Ferguson

Abstract

We estimate the impact of removing an export subsidy on the local economies of Alberta, Saskatchewan and Manitoba, exploiting the large regional variation of a 1995 reform. We find that the loss of the subsidy resulted in significantly lower farm value‐added, farm asset values and local non‐farm employment. The results suggest that the subsidy removal had detrimental spillover effects on the local non‐agricultural economy that varied spatially across the Prairies. The point estimates suggest that the marginal effect of the subsidy loss on non‐agricultural employment was five times as large as those obtained from traditional estimates of the multiplier effect.

Suggested Citation

  • Ray D. Bollman & Shon M. Ferguson, 2019. "The Local Impacts of Agricultural Subsidies: Evidence from the Canadian Prairies," Journal of Agricultural Economics, Wiley Blackwell, vol. 70(2), pages 507-528, June.
    • Handle: RePEc:bla:jageco:v:70:y:2019:i:2:p:507-528
    DOI: 10.1111/1477-9552.12309
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    Cited by:

    1. Chengyou Li & Zhouhao Sha & Xiaoqin Sun & Yong Jiao, 2022. "The Effectiveness Assessment of Agricultural Subsidy Policies on Food Security: Evidence from China’s Poverty-Stricken Villages," IJERPH, MDPI, vol. 19(21), pages 1-17, October.
    2. Liu, Jing Jing & Salleh, Norlida Hanim Mohd & Nor, Nor Ghani Md, 2024. "The economy-wide impact of cooking oil subsidy reforms and compensation to the oil palm industry," Journal of Policy Modeling, Elsevier, vol. 46(6), pages 1228-1242.
    3. Deping Ye & Shangsong Zhen & Wei Wang & Yunqiang Liu, 2023. "Spatial double dividend from China’s main grain-producing areas policy: total factor productivity and the net carbon effect," Humanities and Social Sciences Communications, Palgrave Macmillan, vol. 10(1), pages 1-22, December.

    More about this item

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • Q16 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - R&D; Agricultural Technology; Biofuels; Agricultural Extension Services
    • Q17 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agriculture in International Trade
    • Q18 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Policy; Food Policy; Animal Welfare Policy

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