A flexible and efficient hybrid agricultural subsidy design for promoting food security and safety

Abstract

The quantity and quality of edible agricultural products are critical for food security (quantity) and safety (quality). Supplying consumers with enough safe food is the key responsibility of food production firms. Still, this aim is not always guaranteed because of input capacity constraints and other limitations in the agricultural sector. A hybrid subsidy, a mix of quantity and quality subsidy, could help achieve food security and safety in a country its flexibility. However, the advantages of the hybrid have not been fully investigated. Thus, this paper designs a hybrid subsidy for edible agricultural products by considering cost uncertainties and input resource constraints. All conclusions are obtained by theoretical mathematical analysis. (1) equilibrium solutions under different conditions—cost uncertainties and input constraints—are obtained, and comparative analyses is offered. (2) the results show that the hybrid subsidy is convenient in the trade-off between food quantity and quality, which means a hybrid subsidy policy design is flexible and efficient for food security and safety. (3) cost uncertainties and input resource constraints have significant impacts on the efficiency of the hybrid subsidy. Findings show that the hybrid subsidy is ideal for supporting edible agricultural products. Additionally, we argue that cost uncertainties and input constraints should be considered when making policy efficiency evaluations. This study has a novel contribution to agricultural support policy design.