Accession Number:

ADA093752

Title:

The Benefits to the Netherlands of Certain Internal Investment Subsidies in Light of Common Market Policies,

Descriptive Note:

Corporate Author:

RAND CORP SANTA MONICA CA

Personal Author(s):

Report Date:

1980-09-01

Pagination or Media Count:

17.0

Abstract:

As Dutch policymakers consider alternative agricultural investment strategies, they confront special economic incentives to the Netherlands arising from membership in the European Economic Community, popularly known as the Common Market. In particular, membership subjects the Netherlands to the Common Markets agricultural price controls and its program for agricultural modernization. This paper asks Is it in the interest of the Netherlands people for their government to subsidize farmers investments in more mechanized equipment. The answer presented here takes specific account of the Communitys two principal agricultural policies. This paper has two main parts. First, we consider the EEC agricultural pricing policies. Within this context, we determine whether the Dutch Government should induce Dutch agricultural producers to invest in more mechanized equipment. Our finding here is that the Dutch people as a group cannot be expected to gain from more than the amount of investment freely chosen by Dutch producers. Second, we describe the EEC subsidy program for agricultural modernization, and determine the conditions under which the Netherlands gains by accepting the EEC investment subsidy to farmers. Under this additional complication, we find that Dutch policymakers should accept the subsidy for Dutch agricultural products with highly elastic export demands otherwise, they should reject the subsidy. Author

Subject Categories:

  • Agricultural Economics
  • Government and Political Science

Distribution Statement:

APPROVED FOR PUBLIC RELEASE