Who Really Benefits from Agricultural Subsidies? Evidence from Field-Level Data

Barrett Kirwan and Michael Roberts

No 62028, 2010 Annual Meeting, July 25-27, 2010, Denver, Colorado from Agricultural and Applied Economics Association

Abstract: The idea that agricultural subsidies are fully capitalized into farmland values forms the foundation of the argument that subsidies are entitlements and removing them would drastically reduce farmland asset values. Surprisingly little evidence substantiates this claim. Using field-level data and explicitly controlling for potentially confounding variables we find that landlords only capture between 14 – 24 cents of the marginal subsidy dollar. The duration of the rental arrangement has a substantial effect on the incidence. Initially, landlords extract 44 cents of the marginal subsidy dollar, but the incidence falls by 1.5 cents with each additional year of the rental arrangement. This duration effect reveals that rental market frictions play an important role in the farmland rental market.

Keywords: Agricultural; and; Food; Policy (search for similar items in EconPapers)
Pages: 26
Date: 2010
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Citations: View citations in EconPapers (3)

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Related works:
Journal Article: Who Really Benefits from Agricultural Subsidies? Evidence from Field-level Data (2016)
Working Paper: Who Really Benefits from Agricultural Subsidies? Evidence from Field-level Data (2015)
Working Paper: Who Really Benefits from Agricultural Subsidies? Evidence from Field-level Data (2015)
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Persistent link: https://EconPapers.repec.org/RePEc:ags:aaea10:62028

DOI: 10.22004/ag.econ.62028

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