Review of agricultural supply responses for international policy models

Various methods of estimating own-price supply elasticities and their shortcomings are explained, and a review of studies that have estimated price elasticities of supply (including the limitations of each study) is presented. While the literature provides a wide range of estimates for supply responses, the weight of the evidence supports the following conclusions: (1) supply elasticities for individual crops, for cash crops, and in developed countries tend to be larger than those, respectively, for aggregate farm output, for subsistence crops, and in developing countries; (2) policies aimed at increasing output prices are more likely to increase output levels than policies that subsidize input prices; and (3) the importance of non-price variables (e.g., credit, irrigation, fertilizer, and education) in increasing output should not be overlooked. Appendices include own-price supply elasticity tables for Canada, the United States, other developed countries, and African and Asian countries and a 6-page bibliography. (Author abstract, modified)