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Agricultural Policy and Productivity: International Evidence

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  • Fan Hu
  • John M. Antle

Abstract

The aggregate agricultural production function is estimated jointly with a political model that explains differences in policy across countries and over time to test the hypothesis that agricultural policy has had a significant impact on aggregate agricultural productivity. The econometric results strongly support this hypothesis. However, this productivity effect is found to be large and statistically significant only for those countries that tax or subsidize agriculture moderately. In countries that tax or subsidize agriculture at a high rate, the impact of marginally-reducing the tax or subsidy rate is not found to be significant, presumably because high levels of taxation or subsidization distort farmers' incentives to such a degree that marginal changes in policy do not measurably affect their behavior.

Suggested Citation

  • Fan Hu & John M. Antle, 1993. "Agricultural Policy and Productivity: International Evidence," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 15(3), pages 495-505.
    • Handle: RePEc:oup:revage:v:15:y:1993:i:3:p:495-505.
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    File URL: http://hdl.handle.net/10.2307/1349484
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    Cited by:

    1. Zewdie Habte Shikur, 2020. "Agricultural policies, agricultural production and rural households’ welfare in Ethiopia," Journal of Economic Structures, Springer;Pan-Pacific Association of Input-Output Studies (PAPAIOS), vol. 9(1), pages 1-21, December.
    2. Morrison Paul, Catherine J., 2000. "Productivity And Efficiency In The U.S. Food System, Or, Might Cost Factors Support Increasing Mergers And Concentration?," Working Papers 11983, University of California, Davis, Department of Agricultural and Resource Economics.
    3. Derek Headey & Mohammad Alauddin & D.S. Prasada Rao, 2010. "Explaining agricultural productivity growth: an international perspective," Agricultural Economics, International Association of Agricultural Economists, vol. 41(1), pages 1-14, January.
    4. Rainer Klump & César Miralles Cabrera, 2008. "Biased Technological Change in Agriculture: The Hayami-Ruttan Hypothesis Revisited," DEGIT Conference Papers c013_016, DEGIT, Dynamics, Economic Growth, and International Trade.
    5. Catherine Morrison Paul, 2003. "Productivity and Efficiency Measurement in Our “New Economy”: Determinants, Interactions, and Policy Relevance," Journal of Productivity Analysis, Springer, vol. 19(2), pages 161-177, April.
    6. Mundlak, Yair & Butzer, Rita & Larson, Donald F., 2012. "Heterogeneous technology and panel data: The case of the agricultural production function," Journal of Development Economics, Elsevier, vol. 99(1), pages 139-149.
    7. Viveka P. Kudaligama & John F. Yanagida, 2000. "A Comparison of Intercountry Agricultural Production Functions: A Frontier Function Approach," Journal of Economic Development, Chung-Ang Unviersity, Department of Economics, vol. 25(1), pages 57-74, June.
    8. Nathan P. Hendricks & Aaron Smith & Nelson B. Villoria & Matthieu Stigler, 2023. "The effects of agricultural policy on supply and productivity: Evidence from differential changes in distortions," Agricultural Economics, International Association of Agricultural Economists, vol. 54(1), pages 44-61, January.
    9. Hendricks, Nathan P. & Smith, Aaron D. & Villoria, Nelson B., 2018. "Global Agricultural Supply Response to Persistent Price Shocks," 2018 Annual Meeting, August 5-7, Washington, D.C. 274338, Agricultural and Applied Economics Association.

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