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Production Incentives from Static Decoupling: Land Use Exclusion Restrictions

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  • David R. Just
  • Jaclyn D. Kropp

Abstract

Many agricultural support payments are based on past production with restrictions on how land may currently be used. When support payments to field crops are analyzed in a static framework, they do not directly impact current production decisions. However, over time, as relative profits change, these payments affect current output. The payments may keep land in less profitable production of program crops through restrictions prohibiting potentially more profitable endeavors such as cultivating fruits and vegetables. These payments have the potential to lead to production and trade distortions similar in magnitude to the distortions associated with direct production subsidies. Copyright 2013, Oxford University Press.

Suggested Citation

  • David R. Just & Jaclyn D. Kropp, 2013. "Production Incentives from Static Decoupling: Land Use Exclusion Restrictions," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 95(5), pages 1049-1067.
    • Handle: RePEc:oup:ajagec:v:95:y:2013:i:5:p:1049-1067
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    File URL: http://hdl.handle.net/10.1093/ajae/aat060
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    Cited by:

    1. Minviel, Jean Joseph & De Witte, Kristof, 2017. "The influence of public subsidies on farm technical efficiency: A robust conditional nonparametric approach," European Journal of Operational Research, Elsevier, vol. 259(3), pages 1112-1120.
    2. Abby Kelly & Kalyn T. Coatney & Xiaofei Li & Keith H. Coble, 2020. "Subsidy Incidence in the Presence of Bertrand Suppliers of Complementary Inputs: A U.S. Agricultural Example," Journal of Industry, Competition and Trade, Springer, vol. 20(3), pages 479-501, September.
    3. Jean Joseph Minviel & Timo Sipiläinen, 2018. "Dynamic stochastic analysis of the farm subsidy-efficiency link: evidence from France," Journal of Productivity Analysis, Springer, vol. 50(1), pages 41-54, October.
    4. Simola, A., 2018. "Choice of product mix and agricultural subsidies - evidence from a quasi-experiment in Agenda 2000 CAP reform," 2018 Conference, July 28-August 2, 2018, Vancouver, British Columbia 277534, International Association of Agricultural Economists.
    5. Ang, Frederic & Kerstens, Pieter Jan, 2017. "Decomposing the Luenberger–Hicks–Moorsteen Total Factor Productivity indicator: An application to U.S. agriculture," European Journal of Operational Research, Elsevier, vol. 260(1), pages 359-375.
    6. Chengyou Li & Zhouhao Sha & Xiaoqin Sun & Yong Jiao, 2022. "The Effectiveness Assessment of Agricultural Subsidy Policies on Food Security: Evidence from China’s Poverty-Stricken Villages," IJERPH, MDPI, vol. 19(21), pages 1-17, October.
    7. Voica, Daniel C., 2014. "Are Subsidies Decoupled from Production in the Presence of Incomplete Financial Markets?," 2014 Annual Meeting, July 27-29, 2014, Minneapolis, Minnesota 169788, Agricultural and Applied Economics Association.
    8. Malgorzata Busko & Beata Szafranska, 2018. "Analysis of Changes in Land Use Patterns Pursuant to the Conversion of Agricultural Land to Non-Agricultural Use in the Context of the Sustainable Development of the Malopolska Region," Sustainability, MDPI, vol. 10(1), pages 1-22, January.
    9. 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.
    10. Arita, Shawn & Cooper, Joseph C. & Gerlt, Scott & Meyer, Seth D. & Thompson, Wyatt & Westhoff, Patrick, 2021. "Agricultural Supply Response under Extreme Market Events and Policy Shocks," 2021 Annual Meeting, August 1-3, Austin, Texas 313930, Agricultural and Applied Economics Association.
    11. Wanki Moon & Gabriel Pino, 2018. "Do U.S. citizens support government intervention in agriculture? Implications for the political economy of agricultural protection," Agricultural Economics, International Association of Agricultural Economists, vol. 49(1), pages 119-129, January.

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