The theory of factor market distortions deals largely with taxing inputs. However, input subsidies are not only common in manufacturing. For example, U.S. agriculture is heavily dependent on input subsidies.
If water subsidies in the production of California cotton were removed, along with commodity payments, production of cotton in California would likely cease. Likewise, transportation subsidies were common in both the U.S. and Canada, and still prevail in the U.S.

After twenty years of Ag Mediation’s assistance to the American rural areas, there are a number of key developments which I would like to highlight for the Bureau of Land Management and others interested in mediation and dispute resolution. These include background, law, and efforts by states and federal government to focus on mediation as a way of settling disputes. Finally, I would like to enumerate the lessons we have learned.

Contains a dynamic programming algorithm for projecting policy parameters based on a storage model of international markets featuring uncertainty, forward-looking rational expectations and non-negative storage. This algorithm is motivated by the need for a non-analytical solution to the competitive equilibrium in a storage model of U.S. and foreign cotton policy regimes. Obtaining an analytical solution is difficult, except in a limited number of special cases. The numerical solution algorithm essentially consists of multiple nested numerical approximations that reach convergence simultaneously when the relationship between domestic storage and expected farm price achieves stationarity. Given the stationary relationship between storage and expected farm price, we then run the model forward in time (given a sequence of annual realized yield disturbances) under alternative policy regimes representing FACT and FAIR.