An Empirical Study On The Profit Of Grain Production For Farmers In China

How to improve the profit of grain production for famers is a key issue for China’s food supply security and rural farmers’ income raise. Increasing profit of grain production for farmers integrates the overall goal for the government to guarantee the food supply and the micro appeal of farmers for the pursuit of maximizing family income, therefore, it gains great significance for raising famers’ income and guaranteeing food supply security by giving consideration to both increasing farmers’ income and promoting grain production. This study uses large samples of micro households data collected from fixed watch points nationwide, apart from macro data in the statistical yearbook, through empirical research, analyses and discusses the impact of land scale and market price on the profit of grain production for farmers, hoping to gain some valuable conclusions and policy suggestions on increasing profit of grain production for farmers.Using macro data, this article first gives an in-depth analysis on the change features of the production, price, cost and profit of China’s main grain. Based on that, the article then gives an empirical research of the impact of land scale change on grain production and average cost for farmers by using micro household data collected from rural fixed watch points nationwide, in order to investigate the role of land scale in raising profit of grain production. After that, it gives an empirical research of the impact of factor price and product price on grain yield for farmers through micro household data, it also measures and calculates the marginal internal rate of return for factor input through macro data to investigate the impact of market price on the profit of grain production for farmers.The study has shown that:enlarging land scale at present stage increases profit of grain production for farmers. Enlarging land scale raises the level of farmers’ grain production effectively, it boosts absolute value of grain income in circumstance that the price doesn’t change; there exists slight increasing returns to scale in the production of wheat and corn, which brings extra production to farmers and raise net income for farmers; enlarging land scale benefits saving production cost and boosts net profit of grain production for farmers.Enlarging land scale benefits volume increase of wheat and corn while harms volume increase of rice. Return to scale of the production of wheat and corn increases while which of rice decreases; once land scale enlarges, per unit yield of wheat and corn increases slightly, while per unit yield of rice decrease.Increasing grain price promotes grain yield for rural households in a significant way, while increasing single factor price results in a reduction of grain yield in a low level. The incentive function which grain price have on increasing production of rice and corn appears more evidently in recent years, while its incentive function for increasing production of wheat is weakening; the output elasticity of single input factor price grain is small generally, the impact of different factor prices differs with its varieties. The impact of price on the profit of grain production mainly reflects in:returning value of material elements input in wheat production is low relatively, while in the production of corn and rice is high; in the production of rice and corn, the marginal rate of return to scale of seed and mechanical equipment input is high comparatively, while the marginal rate of return to scale of chemical fertilizer and pesticide is low. The amount of subsidy puts a compensation action towards grain production cost for farmers, while doesn’t have a significant acceleration for farmers’ increasing grain yield. Using subsidies for superior crop varieties promotes grain yield; direct subsidy for crop have a slight acceleration for increasing rice yield while not promoting corn production.With the purpose of increasing the profit of grain production for farmers, boosting enthusiasm of farmers in growing grain, and guaranteeing nation’s food supply security, we should promote moderate scale management for grain production in areas where necessary conditions are satisfied. In the mean time, we should make efforts in improving the policy of minimum purchase price and protective price for grain, and give play to the role of market price in profit of grain production and promoting of grain yield. It also calls for further improving of current grain subsidy policy, increasing subsidy especially special subsidy, and put some detailed policies into the framework of new agricultural management system to coordinate reform.