Research On Subsidy Policy Of External Environment Cost Control In Scale Livestock And Poultry Breeding

The development of animal husbandry, especially the scaled livestock and poultry cultivation brings about increasing wastes which put substantial pressure on the environment. Livestock and poultry breeding has been sources of pollution in agricultural ecology and rural lives, and in turn problems of ecological damage and environmental pollution constrained sustainable development of animal husbandry. Since the subsidy policy of external environment cost control can encourage breeders to reduce pollution from livestock and poultry. The control of external environmental cost becomes an integrative policy to balance the development of animal husbandry and protection of rural environment.This thesis focuse on theoretical and empirical studies of the scaled livestock and poultry breeding and subsidy policy of external environmental cost. It first defines the connotation and formation of external environment cost, then extends to policy means which restrained the external cost in breeding livestock and poultry, and finally put an emphasis on the essence, theoretical grounds and mechanism of external cost control so that the framework of this study was set up. Quantitive study on subsidy standard is one of the core issues, and the thesis takes an example of the biogas construction allowance for scaled livestock and poultry breeders (households) in Chongqing city. It estimated the range of subsidy standard value; analyzed factors that affected breeders’response to subsidy policy, and finally, based on the above theoretical and empirical research, put forward to policy suggestions to perfect subsidy policy of external environmental cost control in large-scale animal husbandry in China.The study came to essential conclusions as follows:First, the external environment cost of scaled animal husbandry in Chongqing city in2009is around1.571billion RMB by estimation,4.92%of total value of livestock output, which means average external environment cost of each hog for sale is as high as99.86RMB. High cost of pollution abatement is so high that animal breeders cannot afford, therefore the principle of "Those who created pollution to clearing it up" will hinder the development of our industry of livestock and poultry cultivation. The integration of environmental policy instruments is suggested to put emphases on both "big stick" and "carrot", that means the government is supposed to make subsidy policy of motivation, to share private cost resulted from pollution abatement in raising animals, to guide breeders to decrease sources of pollution by clean production such as the use of biogas, to control external environment cost in animal husbandry, to achieve the win-win target of industrial development and environmental protection and finally to realize sustainable development.Second, the subsidy policy of external cost control in scaled breeding includes essential factors such as the subject, object, standard and forms of subsidy with the core issue of quantitive standard of subsidy. Subsidy, from the standpoint of the government is supposed not to higher than the external environment cost resulted from pollution abatement by animal breeders; and from the standpoint of breeders subsidy is suggested to ensure the breeders’income that will increase or at least not decrease when they take measures to control external environment cost. In practice, the final subsidy standard refers to WTA of animal breeders.With the estimation of external environment cost in large scale livestock and poultry cultivation in the city of Chongqing, this paper analyzes the environmental economic benefits of current technical model in controlling external environmental cost--biogas engineering. Theoretically, application of biogas technology in disposal of animal wastes will reduce1.155billion RMB external environment cost of water pollution and greenhouse effect which can be referred as total amount of biogas engineering allowance in Chongqing City.The construction of each cubic meter biogas engineering will decrease367RMB external environment cost, which can be taken as top limit of biogas subsidy. Various by products of biogas have different financial percent conversion and breakeven point which require different amount of subsidy from government. The study investigated the WAT of breeders to respond to subsidy policy of external environment cost control in large scale cultivation, and estimated breeders expected subsidy standard of334RMB per cubic meter for biogas engineering which can be referred as final subsidy for it is lower than external environment cost. By surveying the WAT of breeders to respond to subsidy policy of external environment cost control in large scale cultivation, the case of biogas engineering shows that most scaled breeding farmers are willing to respond to government subsidy policy to construct facilities of biogas that means the motivation policy to control external environment cost is effective, that scaled breeding farmers expect subsidy standard averages40.18%of biogas engineering; that scaled breeding farmers prefer to cash subsidy and need other subsidy such as technical guidance from government; that major barriers to respond subsidy policy are "excessive maintenance cost" and "shortage of technical guidance" that confirmed the necessity to share external environment cost of breeders and to provide technical support subsidy.By empirical study on factors influencing breeders’ response to subsidy policy in controlling external environment cost, the thesis found that whether breeders respond to government subsidy policy is affected by multi factors such as net benefits from technology of external environment cost control, assessment of pollution degree from animal raising, government supervision of environment and the willing of farmers to respond. The government needs to design integrated measures to motivate animal breeders to respond to control external environment control for these factors are of remarkable correlation.The thesis put forward to policy suggestion as follows:First, there is no special subsidy for pollution abatement of scaled animal husbandry besides small amounts of subsidies from authorities of local governments, environmental protection or animal husbandry; consequently the insufficient subsidy can hardly propel animal breeders to treat problems of pollution. It is suggested to establish special subsidy for pollution abatement by scaled breeding which is different from other subsidies to support breeding industry, to arrange enough finance for special subsidy in budget, to guarantee the finance and its proper use with high efficiency, and finally to establish long-term mechanism that control external environment cost.Second, it is suggested to make scientific plan of subsidy and implement subsidy policies actively. The present subsidy polices have the problems such as small coverage, single means, insufficient amounts etc. that requires to strengthen financial subsidy, to expand subjects of subsidy, and to encourage breeders of scaled production to employ pollution-control technology and/or construct pollution abatement facilities. It is also advised to provide additional means of subsidy besides cash, for instance, the availability of biogas technical service, the establishment of technical stations, the supply of discount loan to breeders who build pollution control facilities, tax deductions to breeders who are active to control pollution to increase their internal rate of return, subsidy increase for pollution control facilities operation, reuse of wastes and manure application, etc.. When implementing subsidy polices, it is recommended to give subsidy afterwards or replace subsidy by award in order to improve their motivation of pollution abatement and avoid "just waiting, depending and claiming".Third, it is suggested to establish and complete supporting measures of subsidy policies. Some factors, for instance, net benefits from pollution abatement, farmers’ assessment of pollution from livestock and poultry breeding, and governmental supervisor of environment protection, have great influences upon breeders willing to respond subsidy policies, therefore the government is supposed to establish and perfect supporting measures to promote efficiency of government subsidy. The supporting measures include the following:to increase economic benefits by establishing long term mechanism, to strengthen environmental education and increase the recognition of pollution from scaled husbandry, to promote consciousness of pollution treatment, to strengthen environmental supervision and to integrate policy instruments of environment policies.The thesis has innovations as follows:First, it innovated the content of study by systematical investigation of internal mechanism to control external environment cost. It also illustrated the theoretical grounds of subsidy polices, and designed the structural factors of subsidy policy, and empirically surveyed the factors influencing breeders willing to respond to polies.Second, it did quantitive researches on subsidy standard both theoretically and empirically, which is one of the essential factors to control external environment cost and has a fresh perspective for study.