GOVERNMENT POLICIES AND THEIR EFFECTS ON RESOURCE USE IN THE U.S. GRAIN AND OILSEED SECTORS

Three policies widely used by governments around the world--market price supports, direct payments, and input subsidies--are analyzed for their implications for resource use and effectiveness in transferring income to growers. Results indicate that direct payments are the most effective while input subsidies are least effective in transferring income to farmers. All policies result in expanded input use with input subsidies having the largest effect while direct payments have the least impact.