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Agricultural Export Subsidies as a Tool of Trade Strategy: Before and after the Federal Agricultural Improvement and Reform Act of 1996

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  • Howard D. Leathers

Abstract

If the main justification for agricultural export subsidies is that they reduce government costs of deficiency payments, then the 1996 farm legislation would make U.S. export subsidies largely unnecessary. An additional argument advanced in favor of export subsidies is that their aggressive use by one country will cause competing countries to reduce or discontinue their own subsidies. This argument is explored by means of a Nash equilibrium in which countries choose both a base subsidy level and a response to competitors, and by a consistent conjectures equilibrium. Little support is found for the argument. Copyright 2001, Oxford University Press.

Suggested Citation

  • Howard D. Leathers, 2001. "Agricultural Export Subsidies as a Tool of Trade Strategy: Before and after the Federal Agricultural Improvement and Reform Act of 1996," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 83(1), pages 209-221.
    • Handle: RePEc:oup:ajagec:v:83:y:2001:i:1:p:209-221
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    File URL: http://hdl.handle.net/10.1111/0002-9092.00148
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    Cited by:

    1. Mulik, Kranti & Rienstra-Munnicha, Paul & Koo, Won W., 2006. "Empirically Analyzing the Impacts of U.S. Export Credit Programs on U.S. Agricultural Export Competitiveness," 2006 Annual meeting, July 23-26, Long Beach, CA 21224, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    2. Paul Rienstra-Munnicha & Calum G. Turvey, 2002. "The Relationship between Exports, Credit Risk and Credit Guarantees," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 50(3), pages 281-296, November.
    3. Rienstra-Munnicha, Paul & Turvey, Calum G. & Koo, Won W., 2006. "A Theoretical Analysis of Economic Impacts of Export Credit Insurance and Guarantees," 2006 Annual meeting, July 23-26, Long Beach, CA 21391, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    4. Reimer Jeffrey J & Stiegert Kyle, 2006. "Imperfect Competition and Strategic Trade Theory: Evidence for International Food and Agricultural Markets," Journal of Agricultural & Food Industrial Organization, De Gruyter, vol. 4(1), pages 1-27, September.
    5. Sacchidananda Mukherjee & Debashis Chakraborty & Julien Chaisse, 2014. "Influence of Subsidies on Exports empirical estimates,policy evidences and regulatory prospects," Working Papers 1422, Indian Institute of Foreign Trade.

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