To evaluate the impacts of variable support price on the components of government welfare costs in the markets for wholesale and on farm production for wheat

Document Type : Original Article

Abstract

    This paper develops a theoretical model and that its results are applied to analyze the welfare effects of variable price support (VPS) schedule for wheat output in both retail farm market and the wholesale market in the framework of partial equilibrium. It turns out that the farm price support program leads to lower its inefficiency impacts on social welfare because net consumer surplus becomes higher as compared with net producer surplus in the wholesale market. However, producers are benefited net surpluses more than the consumers in the retail farm market.     

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