Decoupled payment, domestic subsidy and trade barrier under imperfect competition

Jianyu Yu ()

European Review of Agricultural Economics, 2013, vol. 40, issue 3, 487-505

Abstract: This paper investigates the optimal reform of introducing decoupled payments in the agrofood sector. The model captures the vertical structure of the sector where the domestic processors exert potential oligopsony power towards farmers and compete with foreign firms in the home market. The results suggest that the government may face a potential trade-off of introducing decoupled payment, while committing to the restriction of trade barriers. The presence of imperfect competition makes it more likely for the government to keep a high level of trade barriers and production subsidy after the introduction of decoupled payment. , Oxford University Press.

Date: 2013
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European Review of Agricultural Economics is currently edited by Timothy Richards, Salvatore Di Falco, Céline Nauges and Vincenzina Caputo

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