Subsidies, Production Structure and Technical Change: A Cross-Country Comparison
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The effect of subsidies on production and technical change of crop farms in France and the
United Kingdom (UK) during 1980-2006 is investigated. Subsidies were not neutral on
production decisions, in terms of production intensity and type. Crop farms in both countries
have experienced technical progress during the period studied, higher in France. Technical
progress has favoured labour and chemicals in both countries, land in France, capital in the
UK, while it has disfavoured land in the UK and capital in France. Technical change has been
slowed down by crop area subsidies but increased by agri-environmental subsidies in both
countries.