Agrichemical Reduction Policy: Its Effect on Income and Income Distribution

Abstract

When farm chemical use is restricted, gross farm income rises, but net income may fall. A 10-sector applied general equilibrium model was used to arrive at this assessment. Compared are a chemical use tax, an input restriction on chemicals, and a farm sales restriction imposed on input suppliers. The tax and sales restrictions reduce net income because of rising costs, while the input restriction holds the potential for raising net farm income.

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