Impacts of Set-Aside and R&E Policies on Agricultural Productivity in Japan, 1965-97

This paper estimates "input-saving" and "output-augmenting" productivity (PGX and PGY) with respect to the stock of technological knowledge resulting from public R&E investments as well as returns to scale (RTS) at farm level in Japanese agriculture for the period 1965-97. It also investigates the impacts of set-aside and public R&E policies on PGX, PGY, and RTS. In attaining objectives, a multi-product translog variable cost function is estimated using farm management data for Japanese agriculture excluding the Hokkaido district. Empirical results show that both PGX and PGY have experienced decreasing trends, while returns to scale have shown increasing trends since 1972. Additionally, the set-aside programs seemed to have the effect of discouraging larger-scale farming. Meanwhile, public R&E activities have encouraged larger-scale farming but have had negative effects on PGX and PGY. The negative effects may have been caused mainly by declining effciency in the utilization of research outputs on the part of farmers probably because of dampened incentives due partly to the set-aside programs.

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Journal Article
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Japanese Journal of Rural Economics, Volume 05
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 Record created 2017-04-01, last modified 2017-04-28

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