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Abstract

This paper focuses on the analysis of supply and demand structure of soybean, and estimation of welfare effects of the procurement program. The acreage response functions of the paddy and upland soybean, yield function and demand function were estimated. To predict the supply and demand change and welfare effects of the procurement program, three scenarios were set; Baseline scenario is to stop the government procurement program, Scenario 1 is to procure paddy soybean at higher price than upland soybean procurement price as well as market price as currently, and scenario 2 is to procure paddy and upland soybean at the same higher price. Soybean acreage was predicted to decrease less in scenario 2 than in scenario 1, which would decrease less than baseline. Producers' surplus of scenario 2 is the biggest, and scenario 1 is lower than baseline. Government budget and deadweight loss for scenario 2 are the biggest, scenario 1 is the next, and zero for baseline. With respect to the social net welfare, scenario 1 is the best, baseline is the next, and scenario 2 is the worst. And with respect to the social equity, scenario 1 baseline is the best.

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