Classical Horizontal Inequities in the Provision of Agricultural Income Support

This paper explores the redistributive effect of classical horizontal inequities induced by agricultural support policy. Within farm type horizontal inequity (HI) is associated with differences in the level of support received by farms of a given type and level of pre-support income, whereas between farm type HI arises from systematic differences in support levels between commodity regimes. The overall redistributive effect of HI in Scottish agriculture is shown to be substantial, though systematic discrimination between farm types proves not to be the major cause. The imperfect targeting of support revealed by the empirical findings has implications for the design of policy.