Impacts of alternative agricultural income support schemes on multiple policy goals

This paper analyses and classifies four agricultural income support programmes (an output subsidy, a land subsidy, and a decoupled payment with and without mandatory production) according to their ability to achieve three domestic policy goals (income support, maintenance of a maximum number of farmers and reduction of negative externalities arising from non-land input use) as well as according to their effects on trade. The results show that no programme uniformly dominates others. They also show the key importance for the ordering of policy impacts of two parameters, the elasticity of output supply with respect to land used, and the derived demand elasticity of land with respect to output.