Subsidy Scheme Research Articles

Options for reforming agricultural subsidies from health, climate, and economic perspectives

Agricultural subsidies are an important factor for influencing food production and therefore part of a food system that is seen as neither healthy nor sustainable. Here we analyse options for reforming agricultural subsidies in line with health and climate-change objectives on one side, and economic objectives on the other. Using an integrated modelling framework including economic, environmental, and health assessments, we find that on a global scale several reform options could lead to reductions in greenhouse gas emissions and improvements in population health without reductions in economic welfare. Those include a repurposing of up to half of agricultural subsidies to support the production of foods with beneficial health and environmental characteristics, including fruits, vegetables, and other horticultural products, and combining such repurposing with a more equal distribution of subsidy payments globally. The findings suggest that reforming agricultural subsidy schemes based on health and climate-change objectives can be economically feasible and contribute to transitions towards healthy and sustainable food systems.

Optimization Models for Urban Rail Transit Systems with Subsidy Schemes

Optimization Models for Urban Rail Transit Systems with Subsidy Schemes

Product differentiation and export incentive schemes: A game theory approach

In order to improve economic growth, many governments use public policies to promote their countries? degree of internationalisation. When designing optimal public incentive schemes for internationalisation it is fundamental to consider the characteristics of export markets, such as size, competition degree, tax system, and product differentiation. This paper analyses whether product differentiation has any impact on optimal internationalisation incentive policies, focusing on export subsidy schemes. We develop a two-stage game for three different scenarios: (1) no subsidy, (2) a fixed-subsidy scheme, and (3) a subsidyper-quantity-exported scheme. Using numerical analysis, we revisit the analysis of schemes designing optimal public incentives for internationalisation and conclude that for export markets with low product differentiation a subsidy-per-quantity exported scheme is best at stimulating internationalisation, while for export markets with high product differentiation a fixedsubsidy scheme is the preferable policy.

Study on the Taxi Subsidy Scheme as a Public Service for Mobility of Elderly People in Rural Areas

Study on the Taxi Subsidy Scheme as a Public Service for Mobility of Elderly People in Rural Areas

Designing Subsidy Scheme for Marine Disaster Index Insurance in China

Designing Subsidy Scheme for Marine Disaster Index Insurance in China

Comparison of Educational Subsidy Schemes in an Endogenous Growth Model

Comparison of Educational Subsidy Schemes in an Endogenous Growth Model

Evaluating Air Transport Barriers to Tourism Development in Island States and How Air Service Subsidy Scheme Can Help to Overcome Such Barriers – a Case Study: The Maldives North & South Regions

Evaluating Air Transport Barriers to Tourism Development in Island States and How Air Service Subsidy Scheme Can Help to Overcome Such Barriers – a Case Study: The Maldives North & South Regions

Impact of MAPs on improving the socio-economic situation of rural families in Kosovo

he medicinal and aromatic plants sector is considered a very important sector for the economy of Kosovo since it can provide employment, income, and export growth. Based on this, we assess the impact of the subsidy schemes from the Ministry of Agriculture, Forestry, and Rural Development (MAFRD) using a
 propensity score matching improving the farmers' gross income. The main purpose of the study was to assess whether subsidy schemes have an impact on the farmer's gross income by using a propensity score matching model to match beneficiaries to non-beneficiaries. Results showed that beneficiaries of subsidy schemes make 3,682.09 Euros more per year than non-beneficiaries (95% confidence interval 2,349.9 Euros to 5,012.90 Euros). Using logistic regression, we found that subsidy schemes, market prices, and reductions of unfair competition are the three most important factors affecting farmers' decisions to collect and cultivate MAPs.

Impact of government’s motorcycle subsidy on job performance of agriculture extension officers in Southern province in Sri Lanka

Agricultural Extension is an ongoing, non-formal educational process that takes place over a period of time to transfer knowledge to rural farmers. In Sri Lanka, the ratio of farmers to extension officers is 800:1, and therefore, one extension officer has to extensively work with a larger group of farmers with a limited resource capacity. Considering these facts, the Sri Lankan government decided to provide motorcycle subsidy under National Budget Circular 2/2014 to increase the job performance and well-being of the Agricultural Inspectors. Even though the foresaid objective of this subsidy scheme is to improve the performances, there were no follow-up monitoring and evaluation system for this scheme. Therefore, this research is aimed at evaluating the impact of the government’s motorcycle subsidy on job performance and well-being of Agricultural Inspectors in the southern province of Sri Lanka. The sample of 48 Agricultural Inspectors was randomly selected from 70 Agricultural Inspectors in the Galle district. Descriptive and inferential statistics tests were mainly used to analyze the data. Among the general constraints faced by the Agricultural Inspectors, the distance to be traveled, a higher number of farmers and area to be covered per day and less infrastructural facilities were major constraints. Importantly, the study revealed that the motorcycle subsidy has significantly affected the job performance of the Agricultural Inspectors directly by facilitating to perform their job roles and saving more time for Agricultural Inspectors to enhance their personal and career development through knowledge acquisitions.

"Status of Farm Machinery Manufacturing in Madhya Pradesh: A Case study"

"The objective of this paper was to assess the current status of farm machinery manufacturers in Madhya Pradesh along with farm machinery market size, production potential and demand of farm machinery using primary data. To achieve the goal, primary data were collected through pre-tested and wellstructured proforma in 2017-18 adopting post-stratified random sampling technique. The market size of farm machinery manufacturing sector was estimated to be INR 7.56 (±0.21) Billion. There were 53% manufacturers with an annual turnover less than INR 10 Million and only 3 % manufactures had annual turnover more than INR 150 Million. High coefficient of variation for advance tools like vertical milling centre (660%) and CNC (Computer numeric control) machine (358%) indicated non uniform utilization of advance tools which affects the quality of manufactured farm implements. The survey conducted in the study region had manufactures producing around 45 different farm implements for agriculture. Investigation revealed that the production of the implements like rotavator, laser land leveler, reaper, combine harvester, chaff cutter and spray were less than its demand, which prompted the users to import these implements from neighboring States like Gujarat, Rajasthan and Punjab. The study showed that 43 % of the total manufacturers were integrated with Madhya Pradesh Government subsidy scheme. The manufactures of Madhya Pradesh also exported farm implements like reversible Mould Board plough to South Asian country and other developing country"

Investigating an underutilized subsidized routes scheme: Underlying reasons and policy recommendations

The subsidized routes scheme in the Turkish air transport sector began in 2013, being relatively late in comparison with other nations. However, the air carriers in Turkey have not paid much attention to this and the subsidized routes scheme is underutilized. The aim of this study is to identify the underlying problems behind this underutilization and offer potential solutions that can be implemented by interviewing participants from the DGCA, (Turkey’s aviation authority), and airlines in Turkey. The data were collected by means of semi-structured interviews conducted with 10 participants, 7 from airlines and 3 from the DGCA, serving various positions related to route management and those who are responsible for the subsidy scheme. The reasons for the underutilization of the Turkish subsidized routes scheme and suggested improvements to this were extracted from the transcripts through an inductive thematic analysis method. The reasons of the underutilization of the scheme were categorized into four main themes: problems with the content of the legislation, problems arising from the dynamics of the sector/economy/politics, stakeholder interests/interactions, and airport related reasons. Additionally, suggestions for the subsidy scheme were identified and grouped into four main areas: suggestions with the theory and practice of the subsidized routes mechanism, more inclusive policy recommendations, suggestions directly affecting airlines, and suggestions related to stakeholders. Gaining a better understanding of the current problems of this subsidy scheme and proposing possible solutions for the root causes will allow initiatives to design more widely used subsidy schemes in the future.

Why don’t employers hire long-term unemployed entitled to a wage subsidy? The employer’s perspective on subsidised employment

Despite a generous system with high wage subsidies for the long-term unemployed and newly arrived immigrants, many Swedish employers do not make use of this opportunity. This study seeks to increase knowledge of why some employers use the opportunity and others do not. Both register and survey data and combined register and survey data are used. One finding is that employers lack information about the subsidy programmes, although employers that had previously employed subsidised workers were much more likely to employ them in the future. Thus, a key policy question is how to present these subsidies to employers to reduce this barrier. The study also found that some employers hired people from these groups from altruistic motives. However, some employers responded that they would not employ a person entitled to a subsidy, regardless of the content of the subsidy scheme.

Does diversity make collaborative subsidies effective? ICT sector in Korea

ABSTRACT Research and development (R&D) collaboration becomes essential as technology becomes more complex, and technological change occurs at an unprecedented rate in high-tech sectors such as information and communication technologies (ICT). However, no concrete evidence exists on the benefits of collaboration diversity in terms of government support. Therefore, this study investigates whether a firm’s innovation increases not only as R&D collaboration partners’ diversity increases but also as firms engage in cross-sectoral R&D collaboration. Government subsidies for ICT firms that collaborate with other firms and research institutions at the same time have significantly positive effects on firm performance. Interestingly, cross-sectoral collaborations increase innovation activity. The results suggest that firm innovation can be efficiently achieved through R&D partner diversity, and the R&D subsidy scheme needs to focus on collaboration with diverse R&D partners with different knowledge to generate innovative outcomes.

Assessing the opportunity costs of Chinese herder compliance with a payment for environmental services scheme

Addressing serious grassland degradation without exacerbating already low herder incomes is a major challenge for the Chinese government. In response, the Grassland Ecosystem Subsidy and Award Scheme (GESAS) was introduced in 2011 where herders receive payments if they comply with specified stocking rates set at more sustainable levels. However, compliance with GESAS, as well as low herder incomes in some years, is an ongoing issue. Using a stochastic, dynamic bioeconomic model of representative herder households in the desert steppe grasslands of Inner Mongolia Autonomous Region, the opportunity costs for herders in meeting specified stocking rates under different states of nature are identified and compared with GESAS payments. In addition, the impacts on productivity and environmental services provided by herders operating within or outside of GESAS are identified. The results highlight states of nature under which no incentivising payments are needed for compliance or when the opportunity costs greatly exceed the GESAS payments, thereby increasing the risk of non-compliance. The study highlights the need to unbundle the environmental incentive and welfare components of GESAS if the twin objectives are to be achieved, and the need to define and understand the distribution of possible outcomes in designing grassland and ecocompensation policies.

Cost-related analysis of implementing energy-efficient retrofit measures in the residential building sector of a middle-income country – A case study of Bosnia and Herzegovina

This study presents an in-depth analysis of the cost structure when planning EE retrofit measures in the residential sector in Bosnia and Herzegovina. The analysis showed that implementing EE retrofit measures would result in substantial energy savings in single-family houses, however, the specific cost of implementing EE retrofit measures per resident for single-family houses is on average 2.8 times higher than for the other three categories; multi-family houses, apartment buildings, and high-rise buildings. When considering the ratio between the investment costs and GDP per capita showed that the citizens in Bosnia and Herzegovina have four times lower ability to finance EE retrofit measures compared to three other representatives EU members and therefore government subsidy schemes may be inevitable for successfully implementing EE retrofit strategies. The general conclusion based on the cost-effective analysis is that EE retrofit investments, may not be financially viable in single-family houses, multi-family houses, and apartment buildings even if supported by government subsidies due to the very low prices of energy sources (coal and wood) used in these specific building prototypes. On contrary, high-rise buildings, that are mainly driven by natural gas and light distillate fuel oil, show a great EE retrofit-driven profitability in. Looking at the financial assessment outcomes, the most significant benefits are mainly related to retrofit scenario that accounts for improvement in the external wall insulation, window glazing, and improving the heating station efficiency. Looking at the carbon emission outcomes, the most significant benefits in reducing the relative and averaged CO2 emission are strongly related to replacing the existing partly coal-burned furnaces (80% firewood + 20 % coal) in single-family houses with exclusive firewood fueled heating systems. This measure may have an enormous impact on reducing the CO2 emission from single-family houses (minimum 83.1 %), which cover 93.1 % of the total residential building stock in Bosnia and Herzegovina. This study may benefit low and middle-income governments in their aim to translate potential EE retrofit measures in the residential sector to a nationwide economic energy-saving policy.

Optimal subsidy scheme design for promoting intermodal freight transport

Waterborne transport is known to have low environmental impacts compared to other modes. This paper investigates the optimal container subsidies for shippers to promote intermodal shipping involving waterways in a regional transportation network. We consider a linear subsidy scheme consisting of a fixed-rate component and a variable component proportional to the sailing distance. The optimal subsidy design problem is formulated as a bilevel program to maximize the intermodal transport split of demand and minimize the subsidy expenditure. Faster methods are developed to solve the optimization problems of two special subsidy forms, i.e., fixed-rate and distance-based schemes. A case study of the Pearl River Delta region in China suggests that an optimally designed subsidy scheme can increase the intermodal split of container transport by 16%. Many insights are unveiled from the case study regarding the performance comparison between different subsidy schemes, the optimal schemes’ environmental impacts, and their effects on individual shippers and feeder ports. For example, the subsidy is less effective for shippers originating too far from or too close to the hub port and for highly time-sensitive or time-insensitive goods. Moreover, two commonly-used objectives, maximizing the intermodal split and minimizing the CO2 emissions, are well aligned as they yield similar solutions. These insights can assist the local governments in determining the appropriate subsidy schemes and better understanding their overall effects.

Agent-based modelling to simulate farmers’ sustainable decisions: Farmers’ interaction and resulting green consciousness evolution

Agent-based models (ABMs) have been adopted to simulate different kinds of complex systems, from biological systems to complex coupled human-natural systems (CHANS). In particular, when used to simulate man-managed systems, they allow considering human behavioural aspects within the modelling framework. On the other hand, environmental Life Cycle Assessment (LCA) has become an acknowledged tool in research, industry and policy to assess systems’ environmental sustainability. More recently, LCA is being applied to assess the potential environmental impacts of large scale policy actions (e.g., actions to combat climate change). This paper describes the application of a coupled ABM-LCA model to simulate cropping activities in the Grand Duchy of Luxembourg. The ABM considers farmers’ proneness to risk, which was assessed via a naïve Bayesian model trained with the results of a survey distributed to the farmers of the study region. The goal of the study is to assess the effects of the agents’ interactions, that can take place in a farmers’ social network, on the agricultural activities. Geographic Information System (GIS) information, national statistics and naïve Bayesian model are used to parameterize agents’ behaviour and interaction rules. We believe such assessment is necessary for the successful design of public adaptation strategies and subsidy schemes since governmental adaptation actions are needed to reduce emissions due to agricultural activities. Two scenarios (with different levels of farmers’ environmental awareness) were simulated. The results show that the mean and variance of the distribution of farmers’ environmental awareness change due to the effect of the interactions and, as a consequence, farmers’ long-term decisions concerning agricultural activities are affected. This is reflected in the environmental impacts generated by such activities.

Decisions on design and planning of solar-assisted hydroponic farms under various subsidy schemes

Due to rapid urbanization in developing countries, it is necessary for respective governments to seek new approaches to providing sustainable fresh food and clean energy supplies. The implementation of photovoltaic (PV) systems in hydroponic farms offers an innovative solution to shortages of energy and fresh food in urban areas. These shortages have become increasingly serious during the Covid-19 lockdown periods. This paper proposes an approach to analyzing the impacts of the PV system subsidy schemes on solar-assisted hydroponic farm (SAHF) design and planning, in terms of the profit and outputs of the SAHF and the effectiveness of the subsidies. The subsidy schemes considered include the improving electricity tariff (IET), feed-in tariff (FIT) scheme, and investment co-funding (ICF) scheme. A quadratic programming model is developed to optimize the type and capacity of the PV system simultaneously. The proposed model can be solved by most commercial solvers using the linearization approach proposed in this study. A case study in Qatar is analyzed and incentive thresholds that promise PV system adoption profitability for SAHFs under IET, full FIT, surplus FIT, and ICF subsidies are identified. The thresholds are 0.0425 $/kWh, 0.0063 $/kWh, 0.027 $/kWh, and 14.90%, respectively. The subsidy conditions that lead to optimum benefits for hydroponic farmers and the government are identified via sensitivity analysis. Our method helps policymakers to optimize subsidy levels and therefore reduces subsidy inefficiency. For hydroponic farmers, it is profitable to take full advantage of the available space to enlarge their PV systems if the surplus electricity can be sold to the grid or other entities.

Cost-reducing strategy or emission-reducing strategy? The choice of low-carbon decisions under price threshold subsidy

Different from the traditional subsidy scheme previously studied, we explore the incentive of price threshold subsidy scheme (PTS) for the sustainable operation of automobile enterprises. A product differential model on gasoline vehicles (GVs) and battery energy vehicles (BEVs) is analyzed within a PTS mechanism. We examine and compare the economic and environmental effectiveness of two low-carbon strategies: BEV cost reduction (BCR) strategy and GV emission reduction (GER) strategy. The results indicate that the PTS forces the manufacturer to deploy three different pricing decisions based on BEV production costs. Raising the price threshold is a positive sign for the manufacturer. However, when the government implements the PTS policy mainly to increase BEV sales, blindly raising the price threshold under the medium-cost case will be counterproductive. Besides, the active BCR strategy can bring significant economic and environmental benefits compared to the strategy without cost investment. We unexpectedly find that high consumer environmental concerns trigger BCR strategy to generate greater cost advantages. But the BCR strategy is not always the optimal choice. When the initial carbon emissions of GV are low and the emission reduction efficiency is high enough, the GER strategy is more effective than the BCR strategy in terms of profit and total carbon emissions. And this advantage expands with the increase in BEV cost and emission-reducing subsidy.

Green Taxation Promotes the Intelligent Transformation of Chinese Manufacturing Enterprises: Tax Leverage Theory

A key issue that concerns governments is how to formulate optimal technology subsidies and green tax standards to promote the intelligent transformation of manufacturing enterprises. In this work, the Pollutant Emission Indicator Trading Mechanism (PEITM) is proposed, and green taxes are divided into Tax of Pollutant Emissions (TPE) and the Tax of Excess Pollutant Emissions (TEPE). On this basis, we study the impact of green taxes and technology subsidies on the intelligent transformation of enterprises in different manufacturing environments from the government’s perspective and provide the optimal government subsidy scheme under different green tax policies. Although it seems counter-intuitive, enterprises’ usual responses to increases in TPE and TEPE are non-monotonic. Moreover, we find a threshold effect for the government’s green taxation. Blindly increasing or reducing taxes may not promote intelligent transformation, but instead force enterprises towards negative choices. Lastly, an effective measure for the government to promote the intelligent transformation of manufacturing enterprises is proposed: by properly adjusting TPE and TEPE, governments can produce more cost-effective intelligent products than ordinary ones. Consequently, intelligent products will sell better than ordinary products, and manufacturing enterprises will be able to consciously carry out intelligent transformation to remain viable.