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Assessment & implications of the business cessation support system for farmers: focus on the grape business

  • Han, Sukho (Department of Agricultural Economics, Chungnam National University) ;
  • Youm, Jungwon (Korea Rural Economic Institute) ;
  • Jang, Heesoo (Department of Agricultural Economics, Chungnam National University) ;
  • Koo, Seungmo (Department of Agricultural Economics, Chungnam National University)
  • 투고 : 2020.05.25
  • 심사 : 2020.07.21
  • 발행 : 2020.09.01

초록

In this paper, we conducted a dynamic ex-post assessment on the grape business cessation support System. Based on the analysis results, in the short term, there was an increase in grape price due to a decrease in production and accompanying increases in the prices of consumption substitution items. However, in the long run, grape prices fell again due to an increase in grape production because of the entry of new grape farmers and the growth of adult grape trees. In addition, the analysis showed that the balloon effect caused by the conversion of crops caused indirect damage such as an increase in the production volume of substitution crops and a decrease in prices. When analyzing the social welfare measurement, the results showed that the support system for business cessation increased the overall social welfare due to an increase in producer welfare because of a price increase in the short term, but in the long term, both producer and consumer welfare decreased. In the end, it is necessary to review the system because the government's intervention may cause market distortion and inefficient resource allocation. Above all, it is necessary to minimize the indirect effect of the industry's contraction and balloon effect due to excessive business cessation. For this, conditional support should be provided in parallel with post management rather than unconditional support. In addition, it is necessary to provide a strategic support system that considers substitution items in addition to those items to be supported.

참고문헌

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