An analysis of alternative rice policies in Taiwan
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Date
1991
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Abstract
Most activities of the rice industry in Taiwan are affected by rice policy. Accordingly, it is important to impose an appropriate rice policy. Previous research indicates that rice policy has had different major objectives at different time periods. The original objective of rice policy was to encourage rice production. But rapid economic growth and increases in per capita income have led to the changes in rice consumption. For example, the income elasticity for rice in Taiwan changed from positive to negative. Rice production in Taiwan has faced surplus, income, and cost problems created by the current policy. In order to avoid these problems, this study developed a flexible rice policy simulation model which links planning variables together with in the rice model. In order to provide the optimal values of the control instruments, optimal control theory will be applied. The model's objective function will maximize the difference between farmers' total net revenue and government cost. The output variables are the farmers' total net revenue and government cost. The state variables are to ta l expense of government purchased rice, cost of storage, and ending stocks. Three control variables include a government guaranteed purchase price (the support price), quantity purchased per hectare, and the government planning cultivated area. The period of simulation is three years. In addition, econometric dynamic models are used as a constraint function. The penalty function of ending stocks is included in the optimization procedure.
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Vita
Major subject: Agricultural Economics
Vita
Major subject: Agricultural Economics
Keywords
Major agricultural economics, Agriculture, Economic aspects, Rice, Government policy