Farmer's Dilemma; Good or Bad Harvest; Purchasing Program; Tariff Quota
농업경영.정책연구, v.39, no.4, pp.753 - 772
This study examines the traditional farmer's dilemma issue as good or bad harvest is expected to happen more frequently than ever before with increasing climate changes. An analytical framework to explain the farmer's dilemma is explored, and then some policy implications are derived based on the theoretical analyses. The results show that the farmer's dilemma depends on the price elasticities of demand and the extent of good or bad harvest. The results also show that under the farmer's dilemma there exists high possibility that individual farmers will always face welfare loss assuming that good and bad harvests happen with equal probabilities. Furthermore, this study demonstrates that an expost purchasing program is inevitable in the years of good harvest, but tariff quota scheme which has been frequently used in agricultural markets should be very carefully introduced as it gives serious welfare loss to farmers even when a purchasing program is put in force.