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Subsidies, Land Size and Agricultural Output

Author

Listed:
  • Foteini Kyriazi

    (Agricultural University of Athens)

  • Dimitrios D. Thomakos

    (National and Kapodistrian University of Athens)

  • Antonis Rezitis

    (Agricultural University of Athens)

Abstract

"In this paper we make a two-fold contribution. We first examine the impact of agricultural subsidies on Greece, using a detailed, micro-panel dataset for four years, 2008, 2010, 2012, and 2014. Our analysis is illuminating at least two aspects of subsidies: first, it suggests that an incentive scheme for promoting a larger farm size would have a probable positive effect on agricultural value-added; second, that subsidies today produce the larger impact on future value-added for the top two percentiles of the subsidy distribution. The adjacent contribution is the presentation of a new theoretical model on subsidies where we examine the impact of land size and taxes on them. We estimate the model’s hyperparameters, using Greek data from the FADN database. Our new theoretical results, combined with the empirical analysis on the first part, suggest that agricultural subsidies are of dubious economic value, in magnitude and effect, and distort the incentives for returns-to-scale and increased working hours in Greek agriculture"

Suggested Citation

  • Foteini Kyriazi & Dimitrios D. Thomakos & Antonis Rezitis, 2023. "Subsidies, Land Size and Agricultural Output," Review of Economic Analysis, Digital Initiatives at the University of Waterloo Library, vol. 15(3), pages 161-183, December.
    • Handle: RePEc:ren:journl:v:15:y:2023:i:3:p:161-183
    DOI: https://doi.org/10.15353/rea.v15i3-4.5579
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    More about this item

    Keywords

    agricultural subsidies; agricultural policy; farm size; fiscal policy; taxation; value-added;
    All these keywords.

    JEL classification:

    • Q12 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Micro Analysis of Farm Firms, Farm Households, and Farm Input Markets
    • Q13 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Markets and Marketing; Cooperatives; Agribusiness
    • Q14 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Finance
    • Q15 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Land Ownership and Tenure; Land Reform; Land Use; Irrigation; Agriculture and Environment

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