In theory, moving from price-based subsidies for agriculture to less-distorted income support programs makes sense. In practice, income-support programs have many shortcomings, and developing countries may lack the support mechanisms needed to make them effective.Drawing on experience with...

Drawing on experience with direct income-support programs recently introduced in the European Union, Mexico, and the United States, the authors highlight problems that may arise when a developing economy's agricultural sector moves from price-based subsidies to income support programs. They...