Agricultural Export Subsidies and Intermediate Goods Trade

Philip L. Paarlberg

American Journal of Agricultural Economics, 1995, vol. 77, issue 1, 119-128

Abstract: In this paper I examine the effects of export subsidies when a bulk commodity is an intermediate good which is either exported or processed into a higher-value agricultural good for domestic or export sale. The analysis shows that while the industry producing the subsidized good benefits, the industry producing the other good may not. A bulk commodity export subsidy may lower the price of the higher value agricultural commodity. An export subsidy on the higher-value agricultural commodity may lower the bulk commodity's price. The outcome depends on the relative excess supply and excess demand elasticities and on the market structure.

Date: 1995
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Persistent link: https://EconPapers.repec.org/RePEc:oup:ajagec:v:77:y:1995:i:1:p:119-128.

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