IDEAS home Printed from https://ideas.repec.org/a/bla/jageco/v60y2009i3p504-529.html
   My bibliography  Save this article

Agricultural Subsidies and Rural Development

Author

Listed:
  • Karine Daniel
  • Maureen Kilkenny

Abstract

How consistent is a single farm payment system with rural development goals? A new economic geography model is used to compare coupled subsidies to ‘single farm payments’ effects on the location of farming, agro‐industry and non‐farm activity between rural and urban areas. This abstract model features a majority of employment in service sectors, farming vertically linked to manufacturing, and strong preferences for geo‐varieties. It appears that both coupled subsidies and single farm payments can decrease spatial agglomeration. But only the single farm payment policy raises welfare in both rural and urban regions of this stylised economy.

Suggested Citation

  • Karine Daniel & Maureen Kilkenny, 2009. "Agricultural Subsidies and Rural Development," Journal of Agricultural Economics, Wiley Blackwell, vol. 60(3), pages 504-529, September.
    • Handle: RePEc:bla:jageco:v:60:y:2009:i:3:p:504-529
    DOI: 10.1111/j.1477-9552.2009.00214.x
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/j.1477-9552.2009.00214.x
    Download Restriction: no
    File URL: https://libkey.io/10.1111/j.1477-9552.2009.00214.x?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Oliver Balkhausen & Martin Banse & Harald Grethe, 2008. "Modelling CAP Decoupling in the EU: A Comparison of Selected Simulation Models and Results," Journal of Agricultural Economics, Wiley Blackwell, vol. 59(1), pages 57-71, February.
    2. Fujita, Masahisa & Krugman, Paul, 1995. "When is the economy monocentric?: von Thunen and Chamberlin unified," Regional Science and Urban Economics, Elsevier, vol. 25(4), pages 505-528, August.
    3. Sergio H. Lence & Stéphan Marette & Dermot J. Hayes & William Foster, 2007. "Collective Marketing Arrangements for Geographically Differentiated Agricultural Products: Welfare Impacts and Policy Implications," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 89(4), pages 947-963.
    4. Paul Krugman & Anthony J. Venables, 1995. "Globalization and the Inequality of Nations," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 110(4), pages 857-880.
    5. Alexandre Gohin & Laure Latruffe, 2006. "The Luxembourg Common Agricultural Policy Reform and the European Food Industries: What's at Stake?," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 54(1), pages 175-194, March.
    6. Alexandre Gohin, 2005. "The specification of price and income elasticities in computable general equilibrium models : an application of latent separability," Post-Print hal-01931546, HAL.
    7. Kilkenny, Maureen, 1998. "Transport Costs, the New Economic Geography, and Rural Development," Staff General Research Papers Archive 1201, Iowa State University, Department of Economics.
    8. Bryden, John & Bollman, Ray, 2000. "Rural employment in industrialised countries," Agricultural Economics, Blackwell, vol. 22(2), pages 185-197, March.
    9. Richard Baldwin & Rikard Forslid & Philippe Martin & Gianmarco Ottaviano & Frederic Robert-Nicoud, 2005. "Economic Geography and Public Policy," Economics Books, Princeton University Press, edition 1, number 7524.
    10. Barbara Cavalletti & Benedetto Rocchi, 2006. "Efficiency grounds and welfare effects in decoupling farm support. Insights from an AGE model of the Italian economy," International Journal of Sustainable Development, Inderscience Enterprises Ltd, vol. 9(2), pages 106-121.
    11. Stephan J. Goetz & David L. Debertin, 1996. "Rural Population Decline in the 1980s: Impacts of Farm Structure and Federal Farm Programs," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 78(3), pages 517-529.
    12. Teresa Serra & David Zilberman & Barry K. Goodwin & Allen Featherstone, 2006. "Effects of decoupling on the mean and variability of output," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 33(3), pages 269-288, September.
    13. Steve McCorriston, 2002. "Why should imperfect competition matter to agricultural economists?," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 29(3), pages 349-371, July.
    14. Maureen Kilkenny, 1995. "Transport Costs and Rural Development," Center for Agricultural and Rural Development (CARD) Publications 95-wp133, Center for Agricultural and Rural Development (CARD) at Iowa State University.
    15. Corden, W Max & Neary, J Peter, 1982. "Booming Sector and De-Industrialisation in a Small Open Economy," Economic Journal, Royal Economic Society, vol. 92(368), pages 825-848, December.
    16. Gohin, Alexandre, 2005. "The specification of price and income elasticities in computable general equilibrium models: An application of latent separability," Economic Modelling, Elsevier, vol. 22(5), pages 905-925, September.
    17. JunJie Wu & Munisamy Gopinath, 2008. "What Causes Spatial Variations in Economic Development in the United States?," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 90(2), pages 392-408.
    18. Venables, Anthony J, 1996. "Equilibrium Locations of Vertically Linked Industries," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 37(2), pages 341-359, May.
    19. repec:hhs:iuiwop:430 is not listed on IDEAS
    20. ANDERSON, Simon P. & de PALMA, André & THISSE, Jacques-François, 1992. "Interpretations of the logit discrete choice models and the theory of product differentiation," LIDAM Reprints CORE 1017, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    21. Maureen Kilkenny, 1993. "Rural/Urban Effects of Terminating Farm Subsidies," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 75(4), pages 968-980.
    22. Karine Daniel, 2003. "Concentration et spécialisation : quel schéma pour l'agriculture communautaire ?," Economie & Prévision, La Documentation Française, vol. 158(2), pages 105-120.
    23. Rizov, Marian, 2004. "Rural development and welfare implications of CAP reforms," Journal of Policy Modeling, Elsevier, vol. 26(2), pages 209-222, February.
    24. Rabinowicz, Ewa, 1999. "Redesigning the CAP to Meet the Challenges of EU Enlargement and the WTO: What Can Agricultural Economic Research Contribute?," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 26(3), pages 265-281, August.
    25. Allan Buckwell, 2007. "The Next Steps in CAP Reform Les prochaines étapes de la réforme de la PAC Die nächsten Schritte in der Reform der GAP," EuroChoices, The Agricultural Economics Society, vol. 6(2), pages 13-19, August.
    26. Roberto Esposti, 2007. "Regional Growth and Policies in the European Union: Does the Common Agricultural Policy Have a Counter-Treatment Effect?," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 89(1), pages 116-134.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Stéphane De Cara & Anne Fournier & Carl Gaigné, 2011. "Feeding the cities and greenhouse gas emissions: a new economic geography approach," Working Papers 1109, Chaire Economie du climat.
    2. Chen, You-hua & Chen, Mei-xia & Mishra, Ashok K., 2020. "Subsidies under uncertainty: Modeling of input- and output-oriented policies," Economic Modelling, Elsevier, vol. 85(C), pages 39-56.
    3. V. Santoni & M. Pulina, 2016. "An analysis on the Italian agricultural firms: effects of public subsidies," Working Paper CRENoS 201611, Centre for North South Economic Research, University of Cagliari and Sassari, Sardinia.
    4. Maureen Kilkenny, 2010. "Urban/Regional Economics And Rural Development," Journal of Regional Science, Wiley Blackwell, vol. 50(1), pages 449-470, February.
    5. Sha, Zhouhao & Ren, Dong & Li, Chengyou & Wang, Zeru, 2024. "Agricultural subsidies on common prosperity: Evidence from the Chinese social survey," International Review of Economics & Finance, Elsevier, vol. 91(C), pages 1-18.
    6. Jens Abildtrup & Virginie Piguet & Bertrand Schmitt, 2011. "The impact of agro-food industry on employment and population changes: The case of Denmark and France'," ERSA conference papers ersa10p1622, European Regional Science Association.
    7. G. Lindberg & P. Midmore & Y. Surry, 2012. "Agriculture’s Inter-industry Linkages, Aggregation Bias and Rural Policy Reforms," Journal of Agricultural Economics, Wiley Blackwell, vol. 63(3), pages 552-575, September.
    8. 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," Palgrave Communications, Palgrave Macmillan, vol. 10(1), pages 1-22, December.
    9. Schaeffer, Yves & Aubert, Francis, 2010. "La pertinence de la politique rurale à l’aune des théories de la justice," Review of Agricultural and Environmental Studies - Revue d'Etudes en Agriculture et Environnement (RAEStud), Institut National de la Recherche Agronomique (INRA), vol. 91(1).
    10. Hyytia, Nina, 2011. "Allocation of CAP modulation funds to rural development measures at the regional level in Finland," 2011 International Congress, August 30-September 2, 2011, Zurich, Switzerland 114525, European Association of Agricultural Economists.
    11. Nina Hyytiä, 2014. "Farm diversification and regional investments: efficient instruments for the CAP rural development targets in rural regions of Finland?," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 41(2), pages 255-277.
    12. Marco Baudino, 2021. "Rural-to-urban migration in developing economies: characterizing the role of the rural labor supply in the process of urban agglomeration and city growth," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 66(3), pages 533-556, June.
    13. Hyytiä Nina, 2014. "Rural-Urban Multiplier and Policy Effects in Finish Rural Regions: an Inter-Regional Sam Analysis," European Countryside, Sciendo, vol. 6(2), pages 179-201, June.
    14. Yves Schaeffer & Francis Aubert, 2010. "La pertinence de la politique rurale à l’aune des théories de la justice," Review of Agricultural and Environmental Studies - Revue d'Etudes en Agriculture et Environnement, INRA Department of Economics, vol. 91(1), pages 73-101.
    15. Glover, Jane, 2011. "Where has all the cream gone: How sustainable is the English dairy supply chain?," 85th Annual Conference, April 18-20, 2011, Warwick University, Coventry, UK 108940, Agricultural Economics Society.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Hyytiä Nina, 2014. "Rural-Urban Multiplier and Policy Effects in Finish Rural Regions: an Inter-Regional Sam Analysis," European Countryside, Sciendo, vol. 6(2), pages 179-201, June.
    2. Pflüger, Michael & Tabuchi, Takatoshi, 2010. "The size of regions with land use for production," Regional Science and Urban Economics, Elsevier, vol. 40(6), pages 481-489, November.
    3. José M. Gaspar, 2020. "Paul Krugman: contributions to Geography and Trade," Letters in Spatial and Resource Sciences, Springer, vol. 13(1), pages 99-115, April.
    4. Murata, Yasusada, 2008. "Engel's law, Petty's law, and agglomeration," Journal of Development Economics, Elsevier, vol. 87(1), pages 161-177, August.
    5. Bertrand Schmitt & Florence Goffette-Nagot, 2000. "Définir l'espace rural ? De la difficulté d'une définition conceptuelle à la nécessité d'une délimitation statistique," Économie rurale, Programme National Persée, vol. 257(1), pages 42-55.
    6. José M. Gaspar, 2018. "A prospective review on New Economic Geography," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 61(2), pages 237-272, September.
    7. Fujita, Masahisa & Thisse, Jacques-François, 2001. "Agglomération et marché," Cahiers d'Economie et de Sociologie Rurales (CESR), Institut National de la Recherche Agronomique (INRA), vol. 58.
    8. Francis Aubert & Bertrand B. Schmitt, 2008. "Economic mechanisms at work in rural areas, delineation of French rural areas and consistence of public interventions [Mécanismes économiques à l'oeuvre dans les espaces ruraux : conceptions du rur," Post-Print hal-02656747, HAL.
    9. Francis Aubert & Bertrand B. Schmitt, 2006. "Economic mechanisms at work in rural areas, delineation of French rural areas and consistence of public interventions [Mécanismes économiques à l'oeuvre dans les espaces ruraux : conceptions du rur," Post-Print hal-02819848, HAL.
    10. Kristian Behrens & Frédéric Robert‐Nicoud, 2009. "Krugman's Papers in Regional Science: The 100 dollar bill on the sidewalk is gone and the 2008 Nobel Prize well‐deserved," Papers in Regional Science, Wiley Blackwell, vol. 88(2), pages 467-489, June.
    11. Nina Hyytiä, 2014. "Farm diversification and regional investments: efficient instruments for the CAP rural development targets in rural regions of Finland?," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 41(2), pages 255-277.
    12. Masahisa Fujita, 2010. "The Evolution Of Spatial Economics: From Thünen To The New Economic Geography," The Japanese Economic Review, Japanese Economic Association, vol. 61(1), pages 1-32, March.
    13. Daniel, Karine & Kilkenny, Maureen, 2002. "Decoupled Payments and the Localization of Activities," 2002 International Congress, August 28-31, 2002, Zaragoza, Spain 24942, European Association of Agricultural Economists.
    14. Yiming Zhou, 2019. "Home market effect, land rent, and welfare," Asia-Pacific Journal of Regional Science, Springer, vol. 3(2), pages 561-580, June.
    15. Vasco Leite & Sofia Castro & João Correia-da-Silva, 2009. "The core periphery model with asymmetric inter-regional and intra-regional trade costs," Portuguese Economic Journal, Springer;Instituto Superior de Economia e Gestao, vol. 8(1), pages 37-44, April.
    16. Picard, Pierre M. & Toulemonde, Eric, 2006. "Firms agglomeration and unions," European Economic Review, Elsevier, vol. 50(3), pages 669-694, April.
    17. Pierre Picard & Takatoshi Tabuchi, 2010. "Self-organized agglomerations and transport costs," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 42(3), pages 565-589, March.
    18. Stephen J. Redding, 2010. "The Empirics Of New Economic Geography," Journal of Regional Science, Wiley Blackwell, vol. 50(1), pages 297-311, February.
    19. GAIGNE, Carl & LAROCHE DUPRAZ, Cathie & MATTHEWS, Alan, 2015. "Thirty years of European research on international trade in food and agricultural products," Review of Agricultural and Environmental Studies - Revue d'Etudes en Agriculture et Environnement (RAEStud), Institut National de la Recherche Agronomique (INRA), vol. 96(1), March.
    20. Bagoulla, Corinne & Péridy, Nicolas, 2011. "Market access and the other determinants of North–South manufacturing location choice: An application to the Euro-Mediterranean area," Economic Systems, Elsevier, vol. 35(4), pages 537-561.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:jageco:v:60:y:2009:i:3:p:504-529. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: http://www.blackwellpublishing.com/journal.asp?ref=0021-857X .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.