Who benefits from agricultural subsidies is an open question. Economic theory predicts that
the entire subsidy incidence should be on the farmland owners. Using a complementary set
of policy quasi experiments, I find that farmers who rent the land they cultivate capture 75
percent of the subsidy, leaving just 25 percent for landowners. This finding contradicts the
prediction from neoclassical models. The standard prediction may not hold because of less
than perfect competition in the farmland rental market; the share captured by landowners …

Each year US farmers receive more subsidies than needy families receive through welfare
assistance or post-secondary students receive through student aid grants. Yet, who benefits
from agricultural subsidies is an open question. Economic theory predicts the entire subsidy
incidence should be on the farmland owners. Since non-farmers own nearly half of all
farmland, this implies that a substantial portion of all subsidies accrue to non-farmers while a
significant share of all farmers receive no benefits. Using a complementary set of policy …