Impacts of direct government payments on US agriculture: evidence from 1960‐2010 data

Abstract

Purpose

The purpose of this paper is to examine the impacts of direct government payments on agricultural production and exports in the USA.

Design/methodology/approach

Alternative regression models are estimated using the time‐series data of 1960 to 2010 from ERS/USDA to address the research questions.

Findings

Regression results suggest that current direct government payments had negative influences on US agricultural production and exports, and the lagged influences were positive, but as a whole the impacts of direct government payments were very limited.

Practical implications

Findings from this study provide useful information to agricultural policymakers in the USA, as well as other nations such as China. China may learn from the US experience in developing agricultural subsidies that are effective and allowed under WTO.

Originality/value

While many agricultural trade disputes under WTO are related to the question of whether domestic government supports have boosted agricultural production and exports or reduced imports, this paper addresses the question based on empirical analysis.

Citation

Zou, Y. and Wang, Q. (2012), "Impacts of direct government payments on US agriculture: evidence from 1960‐2010 data", China Agricultural Economic Review, Vol. 4 No. 2, pp. 188-199. https://doi.org/10.1108/17561371211224773