How to Design a Targeted Agricultural Subsidy System: Efficiency or Equity?

Research output: Contribution to journalArticle


In this paper we appraise current agricultural subsidy policy in the EU. Several sources of its inefficiency are identified: it is inefficient for supporting farmers’ incomes or guaranteeing food security, and irrational transfer payments decoupled from actual performance that may be negative for environmental protection, social cohesion, etc. Based on a simplified economic model, we prove that there is ‘‘reverse redistribution’’ in the current tax-subsidy system, which cannot be avoided. To find a possible way to distribute subsidies more efficiently and equitably, several alternative subsidy systems (the pure loan, the harvest tax and the income contingent loan) are presented and examined.


Research areas and keywords

Subject classification (UKÄ) – MANDATORY

  • Earth and Related Environmental Sciences
  • Economics
Original languageEnglish
Article numbere41225
JournalPLoS ONE
Issue number8
StatePublished - 2012
Publication categoryResearch

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