Output-Oriented Agricultural Subsidy Design
研究了四种农业补贴形式（种植补贴、收获补贴、组合补贴和选择性补贴）对产出、农民收入分配、预算效率和社会福利的影响，发现收获补贴虽能提高资源效率和社会福利，但加剧农民收入不平等；种植补贴在适度增产时平衡收入效果最好，但激进目标下表现不佳；组合补贴则能以最少预算实现产出目标并均衡收入。
Many governments subsidize the agricultural industry, trying to raise the market outputs either for domestic needs or for export. In many countries, particularly developing countries, the producers’ market may be fragmented, involving a large number of farmers with variable productivity levels. The format of subsidies can have significantly different implications for farmers in different market segments. In this study, we examine four types of subsidies. A planting subsidy is paid to a farmer based on the amount of input, and a harvesting subsidy compensates a farmer for the cost incurred during the process of output collection and distribution. The government may also offer a combined subsidy under which a farmer gets paid for both planting and harvesting, or it may offer a selective subsidy under which a farmer can choose to be subsidized on either planting or harvesting but not both. In addition to examining the efficiency of budget spending and social welfare, two common performance measures studied in various contexts, we thoroughly analyze the implications of subsidies on the output and wealth distributions among the farmers. In general, subsidizing on harvesting or overly compensating on planting can increase the disparity among the farmers, whereas an appropriate level of planting subsidy helps to balance the distributions of the farmers’ output and profit. A comprehensive evaluation of the government’s policies reveals that the harvesting subsidy, while inducing the most dispersed output and profit distributions, leads to the most efficient use of input resources and the highest social welfare. The planting subsidy, although being the most effective in balancing the farmer income for a moderate output increase, performs poorly in budget spending, resource usage, and welfare generation when the government sets an aggressive target for output increase. In such a situation, the combined subsidy can offer the most evenly distributed farmer income, with the least amount of budget needed to achieve the output target. This paper was accepted by David Simchi-Levi, operations management. Funding: This work was partially supported by the National Natural Science Foundation of China [Grants 71471062, 72032001 and 71972071] and the Shanghai Sailing Program [Grant 22YF1451000]. Supplemental Material: The online appendix is available at https://doi.org/10.1287/mnsc.2023.4749 .