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Agricultural Export Subsidies and Intermediate Goods Trade

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  • Philip L. Paarlberg

Abstract

In this paper I examine the effects of export subsidies when a bulk commodity is an intermediate good which is either exported or processed into a higher-value agricultural good for domestic or export sale. The analysis shows that while the industry producing the subsidized good benefits, the industry producing the other good may not. A bulk commodity export subsidy may lower the price of the higher value agricultural commodity. An export subsidy on the higher-value agricultural commodity may lower the bulk commodity's price. The outcome depends on the relative excess supply and excess demand elasticities and on the market structure.

Suggested Citation

  • Philip L. Paarlberg, 1995. "Agricultural Export Subsidies and Intermediate Goods Trade," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 77(1), pages 119-128.
    • Handle: RePEc:oup:ajagec:v:77:y:1995:i:1:p:119-128.
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    File URL: http://hdl.handle.net/10.2307/1243894
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    Cited by:

    1. Fuller, Frank Harland, 1996. "The location of marginal production for value-added and intermediate goods: optimal policies and trade volumes," ISU General Staff Papers 1996010108000012147, Iowa State University, Department of Economics.
    2. Marion Desquilbet & Herve Guyomard & Chantal Le Mouël & . Secteur Sesames. Sciences Economiques Et Sociales Pour L'Agriculture Et L'Agro-Alimentaire Et Méthodes d'Etude Des Systèmesparis & . Esr. Dépa, 1996. "Taking into account the processed products in the evaluation of agricultural policies : an analysis framework [Prise en compte des produits agricoles transformés dans l'évaluation des politiques ag," Post-Print hal-02840974, HAL.
    3. Sheldon, Ian M. & Pick, Daniel H. & McCorriston, Steve, 2001. "Export Subsidies And Profit-Shifting In Vertical Markets," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 26(1), pages 1-17, July.
    4. Hudson, Darren & Ethridge, Don E., 2000. "Income Distributional Impacts Of Trade Policies In A Multi-Market Framework: A Case In Pakistan," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 32(1), pages 1-13, April.
    5. Aldanondo, Ana Maria & Puertolas, Javier, 2002. "International Quota Transfer and Intermediate Goods," 2002 International Congress, August 28-31, 2002, Zaragoza, Spain 24851, European Association of Agricultural Economists.
    6. Peterson, Jeffrey M. & Minten, Bart & de Gorter, Harry, 1999. "Economic Costs Of The U.S. Wheat Export Enhancement Program: Manna From Heaven Or From Taxpayers?," Working Papers 14578, International Agricultural Trade Research Consortium.

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