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Agricultural Subsidies and Rural Development
Author(s) -
Daniel Karine,
Kilkenny Maureen
Publication year - 2009
Publication title -
journal of agricultural economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.157
H-Index - 61
eISSN - 1477-9552
pISSN - 0021-857X
DOI - 10.1111/j.1477-9552.2009.00214.x
Subject(s) - subsidy , agriculture , payment , welfare , agricultural economics , business , economies of agglomeration , direct payments , rural area , service (business) , economics , natural resource economics , economic growth , geography , finance , market economy , medicine , archaeology , pathology , marketing
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.