Simulating the Impacts of Credit Policy and Fertilizer Subsidy on Central Luzon Rice Farms, the Philippines | Zendy

Rosegrant Mark W. | Zendy; Herdt Robert W. | Zendy

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Simulating the Impacts of Credit Policy and Fertilizer Subsidy on Central Luzon Rice Farms, the Philippines

Author(s) -

Rosegrant Mark W.,

Herdt Robert W.

Publication year - 1981

Publication title -

american journal of agricultural economics

Language(s) - English

Resource type - Journals

SCImago Journal Rank - 1.949

H-Index - 111

eISSN - 1467-8276

pISSN - 0002-9092

DOI - 10.2307/1241208

Subject(s) - subsidy , production (economics) , fertilizer , consumption (sociology) , economics , agricultural economics , dual (grammatical number) , business , natural resource economics , microeconomics , agronomy , market economy , art , social science , literature , sociology , biology

The effects of credit policy and fertilizer subsidy on farmers' input choices, production, and income are examined with a multiseason decision‐making model. Stochastic production technology, risk‐neutral and risk‐averse decision rules, short‐term savings/consumption behavior, and a dual financial market are considered. Results indicate the risk‐neutral rule is more consistent with actual choices than risk‐averse rules. Estimated yields increased 21% to 30% from joint credit and fertilizer subsidies. Benefits are greater on irrigated than on rainfed farms. A substantial default rate in the institutional market reduces credit program benefits.

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