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The Impact on Investment and Production of Different Agricultural Policy Instruments

Principal Findings

All types of agricultural support measures are likely to have an impact on investment. This is particularly the case of the most coupled forms of support such as market price support. However, the dimension of the investment impacts may differ significantly across policy measures since they have different impacts on the farmer’s decision environment. For instance, they have different impact on effective incentive prices and different income transfer efficiency. Under these circumstances the investment effects can be very different, requiring a specific empirical analysis.

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