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Impacts of agricultural subsidy reform on economic welfare, environment and health

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  • Freund, Florian
  • Springmann, Marco

Abstract

Agricultural subsidies are prevalent in nearly all countries across the globe. The main objective of subsidies is to ensure plentiful food production, and to guarantee basic income to farmers. In most countries this is achieved by raising the long-term level of prices above free-market levels and/or by providing direct payments to farmers. Agricultural subsidies mainly help to influence the cost and supply of commodities such as wheat, feed grains, livestock, milk, rice, sugar, and oilseeds such as soybeans. However, they have been criticised for their potentially adverse effects on (i) economic welfare, (ii) the environment and (iii) health. In this study we quantify the economic, environmental and health impacts of agricultural subsidies and analyse what consequences a phasing out or re-purposing of those subsidies could have.

Suggested Citation

  • Freund, Florian & Springmann, Marco, 2019. "Impacts of agricultural subsidy reform on economic welfare, environment and health," Conference papers 330192, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    • Handle: RePEc:ags:pugtwp:330192
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    References listed on IDEAS

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    1. Angel Aguiar & Badri Narayanan & Robert McDougall, 2016. "An Overview of the GTAP 9 Data Base," Journal of Global Economic Analysis, Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University, vol. 1(1), pages 181-208, June.
    2. Baylis, Kathy & Peplow, Stephen & Rausser, Gordon & Simon, Leo, 2008. "Agri-environmental policies in the EU and United States: A comparison," Ecological Economics, Elsevier, vol. 65(4), pages 753-764, May.
    3. Won W. Koo & P. Lynn Kennedy, 2006. "The Impact of Agricultural Subsidies on Global Welfare," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 88(5), pages 1219-1226.
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