How much do decoupled fixed direct payments affect Korean rice production?

다국어 초록 (Multilingual Abstract)

A large body of literature examines the question of whether decoupled payments affect production. Our study focuses on analyzing the effect of decoupled fixed direct payments on Korean rice production. First, a mixed estimation is used to test two hypotheses regarding Korean agricultural subsidies: (1) Decoupled fixed direct payments affect rice area. (2) Fixed and variable direct payments have the same impact on rice areas. Second, we simulate the impact of fixed direct payments on farm income based on the results of the two hypotheses. Finally, we conduct two sensitivity tests: (1) an increase in the target price and (2) an increase in the fixed direct payment. Since domestic rice prices have continued to fall over time, our initial results show evidence that fixed direct payments lead to less rice harvested area reduction than would have otherwise occurred. Second, the simulation results show the impact of direct payments on areas dependent on the area’s relationship with fixed direct payments.

참고문헌 (Reference)

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