Rationalizing Agricultural Export Subsidies

Abstract A conventional view is that export subsidies are inferior to output subsidies as a means of supporting farm prices. However, when there is an excess burden associated with general taxation measures, due to the distortions in markets arising from collection of taxes and any other costs associated with tax collections, export subsidies may be a component of the most efficient producer price support policy. The arguments in this paper provide a more persuasive rationale for pervasive agricultural export subsidies than does much of the recent literature.