U.S. Cotton Subsidies: Drawing a Fine Line on the Degree of Decoupling

The impact of the U.S. cotton policy depends on several interrelated factors; how input subsidies interact with producer price supports, producer price expectations, and the extent to which price supports are decoupled from production. Cotton subsidies have a direct impact on world cotton prices, depending on the extent to which price supports are coupled to production. At one extreme, there is a price impact of 12.4% when producers make decisions at the loan rate, but the average price impact is 20.9% when producers make decisions based on the target price. Results are presented for intermediate cases of decoupling.


Issue Date:
2007-04
Publication Type:
Journal Article
Record Identifier:
http://ageconsearch.umn.edu/record/6621
PURL Identifier:
http://purl.umn.edu/6621
Published in:
Journal of Agricultural and Applied Economics, Volume 39, Number 1
Page range:
135-149
Total Pages:
15
JEL Codes:
Q17; Q18; Q25; Q28




 Record created 2017-04-01, last modified 2018-01-22

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