Taxes, farm programs, and competitive advantage for U.S. and Canadian farmers: a case study

• Published in: American journal of agricultural economics Vol. 74; no. 2; pp. 299 - 309
• Main Authors: Perry, G.M. (Oregon State University), Nixon, C.J, Bunnage, K.J
• Format: Journal Article
• Language: English
• Published: Menasha, Wis Oxford University Press 01-05-1992; American Agricultural Economics Association; American Farm Economic Association
• Subjects: ACCORD COMMERCIAL; ACUERDOS COMERCIALES; Agricultural economics; Agriculture; ALBERTA; BLE; Canada; Competitive advantage; COMPORTAMIENTO ECONOMICO; COMPORTEMENT ECONOMIQUE; COSTOS DE PRODUCCION; COUT DE PRODUCTION; Crop economics; Crop production; Crops; CULTIVOS; EXPLOITATION AGRICOLE; EXPLOTACIONES AGRARIAS; Farmers; Fiscal policy; GATT; Government programs; Income taxes; MODELE DE SIMULATION; MODELOS DE SIMULACION; MONTANA; PLANTE DE CULTURE; POLITICA FISCAL; POLITICA SOCIAL; POLITIQUE FISCALE; POLITIQUE SOCIALE; Property taxes; Q170; Q180; RELACIONES DE INTERCAMBIO; RENTABILIDAD; RENTABILITE; RESULTADOS DE LA EXPLOTACION; RESULTAT DE L'EXPLOITATION AGRICOLE; Simulation; simulation model; Social policy; social programs; Social security tax; State income tax; Tax payments; taxes; TERME DE L'ECHANGE; Total taxes; trade; TRIGO; U.S.A; United States
• ISSN: 0002-9092; 1467-8276
• DOI: 10.2307/1242484

The objective of this study was to understand the impact of tax and social program policies on competitiveness in trade. A case study approach was used, comparing returns to representative wheat farms located in Montana and Alberta. The principal analytical tool was a financial simulation model. The results suggest farmers in Alberta have significant tax and social program advantages and that, for the base scenario, these advantages outweighed government farm program and production cost advantages enjoyed by the Montana farmer. Taxes and social program advantages became relatively less important with an increase in farm size.