The Local Impacts of Agricultural Subsidies: Evidence from the Canadian Prairies

Abstract

We estimate the impact of removing an export subsidy on the local economies of Alberta, Saskatchewan and Manitoba, exploiting the large regional variation of a 1995 reform. We find that the loss of the subsidy resulted in significantly lower farm value-added, farm asset values and local non-farm employment. The results suggest that the subsidy removal had detrimental spillover effects on the local non-agricultural economy that varied spatially across the Prairies. The point estimates suggest that the marginal effect of the subsidy loss on non-agricultural employment was five times as large as those obtained from traditional estimates of the multiplier effect.

Keywords

Agricultural trade liberalisation; export subsidy; local labour markets; market access; spillovers

Published in

Journal of Agricultural Economics
2019, volume: 70, number: 2, pages: 507-528

SLU Authors

• Ferguson, Shon

  • Research Institute of Industrial Economics

UKÄ Subject classification

Business Administration

Publication identifier

• DOI: https://doi.org/10.1111/1477-9552.12309

Permanent link to this page (URI)

https://res.slu.se/id/publ/101559