The Impacts of Factor Inputs-Subsidies on the Agricultural Structural Transformation of the Rice Sector

Abstract

The major objective of this chapter is to quantitatively investigate the effects of factor input-subsidies on the urgent policy issue of transforming small-scale inefficient and low-productive rice farming into efficient and highly-productive rice farming on larger-scale paddy lands. In order to pursue this objective, we will quantitatively evaluate the impact of factor input-subsidy programs on the five key economic indicators of rice farming: (i) the quantity of the supply of rice, (ii) the demands for variable factor inputs such as machinery, intermediate, and other inputs, (iii) the amount of variable profits, (iv) the degrees of returns to scale, and (v) the shadow value of paddy land.