The benefits to the Netherlands of certain internal investment subsidies in light of common market policies

by Velma Montoya Thompson

Purchase Print Copy

 FormatList Price Price
Add to Cart Paperback17 pages $20.00 $16.00 20% Web Discount

As Dutch policymakers consider alternative agricultural investment strategies, they confront special economic incentives to the Netherlands arising from membership in the European Economic Community (EEC). In particular, they confront the EEC agricultural pricing policies, and the EEC subsidy for agricultural modernization which Member States may selectively accept. In this context, this paper asks whether the Netherlands would benefit from Dutch government subsidies to farmers' investments in more mechanized equipment. The paper finds, within the context of the EEC agricultural pricing policies, that the Dutch people cannot be expected to gain from more than the amount of investment freely chosen by Dutch producers. Under the additional complication of the EEC subsidy, the Netherlands gains from the EEC subsidy only for agricultural products with highly elastic export demands; otherwise, it does not. Available evidence indicates that Dutch policy towards agricultural investments corresponds to these findings.

This report is part of the RAND Corporation Paper series. The paper was a product of the RAND Corporation from 1948 to 2003 that captured speeches, memorials, and derivative research, usually prepared on authors' own time and meant to be the scholarly or scientific contribution of individual authors to their professional fields. Papers were less formal than reports and did not require rigorous peer review.

Our mission to help improve policy and decisionmaking through research and analysis is enabled through our core values of quality and objectivity and our unwavering commitment to the highest level of integrity and ethical behavior. To help ensure our research and analysis are rigorous, objective, and nonpartisan, we subject our research publications to a robust and exacting quality-assurance process; avoid both the appearance and reality of financial and other conflicts of interest through staff training, project screening, and a policy of mandatory disclosure; and pursue transparency in our research engagements through our commitment to the open publication of our research findings and recommendations, disclosure of the source of funding of published research, and policies to ensure intellectual independence. For more information, visit

The RAND Corporation is a nonprofit institution that helps improve policy and decisionmaking through research and analysis. RAND's publications do not necessarily reflect the opinions of its research clients and sponsors.