Price Support versus Input Subsidy for Food Self‐Sufficiency in Developing Countries

Self‐sufficiency in food grains has been a publicized goal of government policy in many developing countries. Among various alternatives to achieve this goal, two policy options, output price support and input subsidy, both characterized by the government intervention into market pricing, are evaluated by applying a simple demand‐supply model to the Philippine rice economy. The results demonstrate a possibility that a subsidy applied to modern inputs, such as fertilizer, that are being used below optimum can be more beneficial than supporting product prices.