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General Equilibrium Analysis of the Farm Bill: Food Versus Farm Subsidies

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  • Weerasooriya, Senal
  • Reimer, Jeff

Abstract

Food and farm subsidies, in the form of SNAP and farm safety net programs, account for more than 90 percent of farm bill spending. The national impact of these programs is examined using a general equilibrium model calibrated to match the detailed structure of the U.S. economy, including multiple households and agricultural sectors, for the year 2010. Results show that SNAP increases and slightly decreases the economic welfare of low- and high-income households, respectively. It expands food and agriculture output, draws labor into these industries, and increases prices. Farm subsidies have relatively less impact on national output or welfare. When both types of subsidies are considered together, the impact of SNAP dominates, but the combination of the two modestly expands the size of the food and agricultural sector more than food or farm subsidies do on their own.

Suggested Citation

  • Weerasooriya, Senal & Reimer, Jeff, 2017. "General Equilibrium Analysis of the Farm Bill: Food Versus Farm Subsidies," Conference papers 332877, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    • Handle: RePEc:ags:pugtwp:332877
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    References listed on IDEAS

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