By Bruce L. Gardner and Gordon C. Rausser (Eds.)
The subject material of agricultural economics has either broadened and deepened and the chapters of this instruction manual current cutting edge paintings within the box. This quantity includes half five of the guide on ''agricultural and nutrition policy'' and follows on from quantity 2A which has chapters on ''agriculture, average assets and the environment'' and ''agriculture within the macroeconomy''. even if agricultural economists have constantly paid recognition to those issues, learn dedicated to them has elevated considerably in scope in addition to intensity in recent times
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Extra info for Agricultural and Food Policy
Costs of administration and enforcement may be quite substantial, and may differ among policies. The processes of initially allocating quota and dealing with the inevitable appeals for reallocation can be very cosily, as is well known to anyone who has witnessed them at close hand; every producer (or other presumptive quota owner) must be dealt with on an individual basis. Similarly, substantial costs of negotiation and rent-seeking arise whenever the elimination of a quota is seriously contemplated by government.
The assumption of fixed factor proportions means a quota, QR 1, in the output market is identically equivalent to the same quota in either input market (QF 1 or QM 1). Similarly, a per unit subsidy on either input would have the exact same price, quantity, and welfare effects as would result if the same per unit subsidy were applied to the output market. Nevertheless, if we choose to study incidence in only one market, we must choose that market with a view to isolating the welfare effects of particular interest.
In the single-market model, we saw that an output quota at the competitive quantity, combined with an output subsidy, would be equivalent to a lump-sum transfer to producers (more precisely, to whoever owns the quotas). We also saw that it would be more efficient to set the quota below the competitive quantity if the social opportunity cost of government spending were 1 + ~ dollars per dollar of spending. The same ideas apply in the same ways in the context of the two-factor model, 22 The effects on WI in the case of an input quota are obtained assuming suppliers of X l own the quota and the quota rents are included in W1.
Agricultural and Food Policy by Bruce L. Gardner and Gordon C. Rausser (Eds.)