The Financial Support Model For Major Grain-Producing Areas In China

Since the reform and opening-up, China's agricultural has made great achievements in its development, the total grain output maintains rapid growth, and formed a capacity of 500 billion kilograms of grain production. But compared with developed countries, China's food industry is relatively backward, mainly in low grain production efficiency, shorten food industry chain, backwardness technical equipment of food processing enterprises and weak capacity of deep processing. Besides, the food industry is less of high value-added products, and the construction of food service support system lags behind, and so on.On the other hand, because of the construction of agricultural infrastructure in major grain-producing areas is backward, which results in its weekly service functions, coupled with the weaked grain macro-control capacity, China's grain industry has been volatile in the development, and food production and price changes shows obvious short-term features since 1978. Since the 1990s, China's grain production and supply accessed into a relative surplus period, but the grain growing earnings was not improvment with the increase of food production. On the contrary, because of the relative decline in food prices, grain farmers'income was not increase which continued for five years after 1998, and this phenomenon is especially serious in the grain-producing areas, which are in Northeast China Plain, the North China Plain and the middle and lower reaches of the Yangtze River. Because of China's major grain-producing areas is the core areas of grain production and commodity grain supply, the benefit of grain production and the grain farmer's income level directly affect the farmers enthusiasm of grain production, then affect the national macro grain supply and demand pattern and even food security.A judgement can be formed from the development trend that in the context of the continued population growth, rapidly economic development and the growth in household income, the transformation of the pattern of urban and rural residents'food consumption led to the rapid growth of demand of grain, particularly, the processed grain products, thus led to the tightly grain supply of the nation and national food security issues in a long time. Therefore, in the socialist market economic environment, some important problems must be resolved which are effectively use public financial policies to support the major grain-producing areas, and further stabilize and improve China's comprehensive capacity of grain produce, as well as ensure the grain industrial system to increase the effectiveness and grain farmers to incresae their income steadily, and national food security. Theoretical study and practice of domestic and international development experience shows that financial support as an important means is irreplaceable to enhance the economic benefits of grain production and market competitiveness, and to increase income for grain farmers, and to protect national food security. For the development of major grain-producing areas, although the government has abolished the agricultural tax and promulgated a series of agricultural policies, and these policies has already plays a very important role in promote the development of food industry, especially in ensure sustained increase of food production in the past four years. However, a generally judgement is that there's many problems exist in the design and implementation of the financial policies, such as the current policy lacks stability and long-term, the funds for supporting agriculture structure can not be reasonablely and efficiently make use of. At the same time, the existing policy system need to be adjust based on the WTO rules, particularly, the "green box" rules and "yellow box" rule.Based on the above background, the theme on the investment model of financial support for major grain-producing areas was choosen, the main object is to explore the development and characteristics of the food industry in the main producing areas, evaluation the effect of financial policies support for major grain-producing areas since reform and opening up, and search for the investment model of financial support for major grain-producing areas under the conditions of the market economy and open trade, which can meet the interests of China's grain security strategy, and follow the international practice and WTO rules.This dissertation consists of eight chapters, the main content of each chapter is as follows:Chapter 1 briefly introduces the background, purpose and significance of this paper, and discusses the details of the current develope tendency of domestic and abroad.Chapter 2 is a general analysis of the basic theories of financial support for the development of major grain-producing areas. Mainly related concepts is defined and its connotation and extension is in-depth study. At the same time, the basic theory of this paper was analized.Chapter 3 is about the international experience and enlightenment of financial support for food industry. According to America, Australia and other agricultural resources-rich countries, the EU countries, Japan and other agricultural resources scarce countries, India and other developing countries, study their financial support polciies for major grain-producing areas and law of the development of the dynamic process, then draw the conclusions that China's major grain-producing areas should attach more importance to the development of agricultural infrastructure, food industry service system, food quality inspection and monitoring system for the building, and the importance of cultivation and support for famers'professional cooperation organizations.Chapter 4 is about financial support for the development of major grain-producing areas and its effects. Some problems are existed in the course of financial support for the development of major grain-producing areas such as the shortage of the total agricultural expenditure and the imbalance of the structure, and the grain price support system and the agricultural subsidies policies are imperfect. A conclusion can be drawn from food production and farmer income two angles that authough the total expenditure on agriculture of major grain- producing areas plays a significant role in promote food production increasing and improve the income of grain farmers, there are greater efficiency losses. Based on the analysis of policy objects of financial support for major grain-producing areas, government should choose to support the development of food industry organizations grow, to support the food industrial structure transformation, and optimized the food industrial distribution as the main objects.Chapter 5 gives an analysis of the investment model of financial support for the development of the organizations of grain industry. This chapter use empirical analysis and case analysis, analyzed the behavior characteristics and economic functions of the food producers and related industry organizations of grain industry. The results shows that the financial support for the grain industry organizations should choose various organizations of food industries as the main objects, including the creation and development of various grain professional cooperation, and tax relief, free use of the financial funds combining with the compensation use, direct investment, loan discount and equity investment management shouod be choosed as investment methods.Chapter 6 gives an analysis of the investment model of financial support for the transformation of the food industrial structure. The impact of financial support for food industrial structure is analyzed from the angle of the supply of funds, and the food industrial structure transformation of the main grain producing areas is analyzed from two levels. The first level is transformation of the basis of the grain industrial structure , that is to say, food production restructuring, mainly referring to the crop cultivation restructuring. The second level is to make food industrial structure upgrade, that is the conversion ratio between the basis of food industry, food industry and food-service industry. Then, there is further study of the financial mechanism to guide the industrial conversion. The result shows that financial support for the transformation of the food industrial structure should choose to adjust the production structure of food industry, improve the competitiveness of leading industries, and lead the food industry into the community service system as the investment directions, especially to enhance the competitiveness of the food industry.Chapter 7 gives an analysis of the investment pattern of optimize the distribution of food industries. Major regional comparative analysis is used to analyze the changing course of major grain-producing areas, and the discipline of the financial support for commodity grain base construction from the perspective of historical developments, and study the principles and laws of financial support for optimize the distribution of food industries in the main producing areas, the results shows that the construction of the advantage regions, upgrade potential regions, stability regions and the strategic reserve regions should be choosed as the objects of financial support for layout optimize of grain industry, and the advantage regions of and the strategic reserve areas should be the focus of the finacial investment.Chapter 8 put forword some advices of financial support for the development of major grain-producing areas. From the main line of the investment behavior, and on the basis of the analysis of fiscal policy trends and characteristics since the reform, proposed long-term policy recommendations of financial support for major grain-producing areas development.