title: How to design a targeted agricultural subsidy system: efficiency or equity?
abstract: 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.
authors.affiliation: Centre for Environmental and Climate Research, Lund University, Lund, Sweden. cascong@126.com
authors.forename: Rong-Gang
authors.initials: RG
authors.lastname: Cong
authors.forename: Mark
authors.initials: M
authors.lastname: Brady
mesh_terms: D000383:Agriculture / Q000191:economics* / Q000331:legislation & jurisprudence; D000465:Algorithms; D018803:Models, Economic; D013660:Taxes / Q000191:economics / Q000331:legislation & jurisprudence; D000078329:Workforce