--- title: "Equity and sustainability assessment of agricultural subsidies" output: rmarkdown::html_vignette vignette: > %\VignetteIndexEntry{Equity and sustainability assessment of agricultural subsidies} %\VignetteEngine{knitr::rmarkdown} %\VignetteEncoding{UTF-8} --- ```{r setup, include = FALSE} knitr::opts_chunk$set(collapse = TRUE, comment = "#>", fig.width = 6, fig.height = 4) ``` ```{r} library(agriEquity) ``` Policy-matrix calculations measure how much support agriculture receives. They do not show **who** receives it, whether it reaches smallholders, women farmers and resource-poor regions, or what the same budget could achieve if allocated differently. `agriEquity` answers these questions with household-level data in four steps: incidence, progressivity and equity, distributional effects, and budget-neutral reallocation with explicit productivity-equity-sustainability trade-offs. The `farm_subsidy` data are **simulated** for 1,500 households with three types of support: an input (fertiliser) subsidy, a flat income transfer and an irrigation power subsidy. ## 1. Who receives support? ```{r} bi <- benefit_incidence(farm_subsidy, "fertiliser_subsidy", group = "size_class", weights = "weight", area = "land_ha", income = "farm_income") bi[, c("group", "population_share", "benefit_share", "parity_ratio", "benefit_per_hectare")] ``` Marginal farms make up almost half of households but receive about an eighth of the input subsidy. ## 2. Is it progressive? ```{r} with(farm_subsidy, progressivity_index(fertiliser_subsidy, farm_income, weights = weight)) with(farm_subsidy, progressivity_index(income_transfer, farm_income, weights = weight)) ``` ## 3. Equity across farm size, gender and region ```{r} se <- subsidy_equity(farm_subsidy, "fertiliser_subsidy", dimensions = c("size_class", "gender", "region"), weights = "weight", target = list(size_class = c("marginal", "small"), gender = "female", region = c("Rainfed-East", "Hill-Tribal"))) se$summary ``` `theil_between_share` shows how much of the inequality in benefits is explained by each dimension. ## 4. Effects on inequality and poverty ```{r} de <- with(farm_subsidy, distributional_effects( farm_income, list(fertiliser = fertiliser_subsidy, transfer = income_transfer, power = power_subsidy), weights = weight, poverty_line = 60000)) de$summary[, c("scenario", "gini", "fgt0", "fgt1", "lifted_out_share", "cost_per_household_lifted")] ``` ## 5. Budget-neutral reallocation The same fertiliser-subsidy budget is reallocated under alternative rules. The productivity response (`marginal_return`) and the environmental damage cost per unit of support (`env_cost_per_rupee`) are simulated household attributes; in applied work they come from production-function estimates and environmental valuation. ```{r} fs <- farm_subsidy prio <- with(fs, 1 + (size_class %in% c("marginal", "small")) + 0.5 * (gender == "female") + 0.5 * (region %in% c("Rainfed-East", "Hill-Tribal"))) br <- budget_reallocation(fs$farm_income, fs$fertiliser_subsidy, weights = fs$weight, area = fs$land_ha, priority = prio, target = fs$size_class %in% c("marginal", "small"), return_rate = fs$marginal_return, env_cost = fs$env_cost_per_rupee, inequality_aversion = 1, env_weight = 1, poverty_line = 60000) m <- br$metrics m[, c("rule", "productivity_gain", "environmental_cost", "gini_post", "target_share", "poverty_headcount")] ``` ## 6. Productivity-equity-sustainability trade-offs ```{r} tf <- tradeoff_frontier(fs$farm_income, fs$fertiliser_subsidy, weights = fs$weight, target = fs$size_class %in% c("marginal", "small"), return_rate = fs$marginal_return, env_cost = fs$env_cost_per_rupee, aversion = c(0, 0.5, 1, 2), env_weights = c(0, 1, 3)) tf plot(tf) ``` The current allocation (star) lies inside the frontier: in this simulated example, the same budget could deliver higher productivity, lower inequality and lower environmental cost at once.