Decoupled Payments: A Dynamic, Economywide Perspective

Terry Roe, Agapi Somwaru and Xinshen Diao

No 331392, Conference papers from Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project

Abstract: This report demonstrates the relationship, over time and in an economywide context, between the decoupled payments to U.S. agricultural producers and market/trade distortions. If agricultural capital markets are complete, decoupled payments have longrun effects on land rents and land values, but they have no effect on production. If capital markets are not complete, production effects are small (0.2 percent) in the short run and disappear in the long run. The only permanent effects are on land rental rates and, therefore, on land values, which increase by about 10 percent in the short run tapering off to slightly above 8 percent in the long run.

Keywords: Land Economics/Use; International Relations/Trade (search for similar items in EconPapers)
Pages: 17
Date: 2005
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Persistent link: https://EconPapers.repec.org/RePEc:ags:pugtwp:331392

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