in the extreme these transaction costs may be so high that the farmer remains cutoff from the market altogether producing only for home consumption that is subsistence under these circumstances a subsistence farm household may not benefit from higher farm prices and could in fact lose via induced increases in land rental rates or in the prices paid for locally available inputs a third aspect is that rural households are heterogeneous in terms of their income sources expenditure patterns and ownership of factors particularly land and will therefore be affected diversely by the direct and indirect impacts of policies