The Impacts of Input Subsidies on Structural Change

Abstract

The major objective of this chapter is to investigate the effects of input subsidies on the urgent policy issue of transforming the small-scale inefficient and low productive farming to more efficient and high productive farming on large-scale farms. In order to pursue this objective, we are going to quantitatively evaluate the impacts of input subsidy programs on the following five important economic indicators of farming. These are exactly the same as in the previous Chapters 1 through 3, that is, (i) the output supplies of crops and livestock, (ii) the demands for variable factor inputs such as machinery, intermediate, and other inputs, (iii) the maximized profits, (iv) the degrees of RTS, and (v) the shadow value of land.