AbstractThe purpose of this study was to measure the impact of government influence on competitive advantage and disadvantages in trade for case farms in the United States, Canada, and Australia. The study focused on government tax policy, major social programs, and farm programs and their role in determining the after‐tax changes in farmer wealth. The results indicate that government tax and social programs in Australia provide that country's farmers with a competitive advantage in trade, particularly for the small and medium‐sized farms. However, the lack of government farm programs in Australia generally offsets the tax and social program advantage. Canadian tax laws and social programs likewise provide its farmers with a competitive advantage over their US counterparts, but not to the same extent as Australia. © 1993 John Wiley&Sons,