Study on Agricultural Product-coupled Subsidy Policy Considering Output Uncertainty and the Development of Tobacco Agriculture

Abstract

Objectives: The health and well-ordered development of tobacco agriculture is very important. The incentive effects of plant-coupled subsidies and output-coupled subsidies on farming decisions with the consideration of uncertainty are investigated. The study shows that if the same unit subsidy is adopted, the incentive effect of the two policies will be determined by the expected output. When the expected output is higher, the incentive effect of the output-coupled subsidy is better than that of the plant-coupled subsidy. And when the expected output is lower, the incentive effect of the plant-coupled subsidy is better. If the implementation scheme limits the total amount of subsidies, it is better to determine subsidy policy by optimal output. The higher the optimal output is, the better the plant-coupled subsidy is. And when the optimal output is relatively low, the output-coupled subsidy shows a better incentive effect. Meanwhile, the study results also show that the incentive effects of the two coupled subsidy policies for increasing production and income are consistent, and the advantages of the policy with better incentive effects increase as the amount of subsidies increases.