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The Economic Analysis of the Adjustment of Paddy Field and Uplands Utilization Program on Set-Aside, Rotation and Government Purchasing on Grain and Rice
Production structure of rice has to be adjusted to avoid the economic damage due to free trade since Taiwan has joined World Trade Organization and will allow rice imported. Three alternative programs: Set-Aside, Rotation, and Foresting are allowed rice farmers to shift their cropping patterns to these alternatives. However, the economic incentive of these alternative programs has to be greater than planting rice in order to attract framers' shifting. The main purpose of this study is to use mathematical program skill to formulate an economic model for simulating the gap of economic incentive among rice and these alternative programs. Four aspects: Supply and Demand Balance in Food, Regulation of WTO, Functions of Ecological, and Government Budget are used to evaluate the advantages and dis-advantages of these programs. Finally, the price dropping of rice by free trade is considered in this study and the economic model could simulate the possible distribution of these alternative programs in acreage due to price change. The priorty and its adjustment of each alternative program is proposed according to alternative policy goals.
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