Daniel K., Kilkenny M., 2009 – Agricultural subsidies and rural development. Journal of Agricultural Economics, volume 60 issue 3, pages 504 – 529. https://doi.org/10.1111/j.1477-9552.2009.00214.x

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.

Keywords : computable general equilibrium, idle land, new economic geography, policy analysis, rural welfare, service sector, transport costs, welfare, policy, impacts, cap, industrialization, competition, economy, support