The effect of grain trade liberalization on food security of grain farm households in China

The dissertation examines how border liberalization in agricultural markets, which results in a lower grain prices affects the food security of the farm households.; The analysis of food security is from the demand side and it focuses on the ability of farm households to be able to obtain an adequate amount of staple food to maintain an active and healthy life. The importance of staple food grains in Chinese diet is shown by the Food Balance Sheets data from FAOSTAT (2004), that 50% of the daily calorie intake per person in China is from staple food grains in 2002. Therefore, analyzing grain consumption should be informative to consider food security of Chinese grain farmers. Moreover, I recognize that households are both producers and consumers of grains, therefore, while a leftward shift of the probability distribution of the price of staple grains makes producers worse off as income decreases, it allows farmers as consumers to buy the same quantity at lower prices, thus providing them with a positive effect.; The dissertation proceeds as follows. Chapter 2 reviews the existing literature on the effect of border liberalization in China. Anderson, Huang and Ianchovichina (2004) found a downward shift in the mean of the price distribution at the border markets as one result of trade liberalization. Poor farm households, who are the most vulnerable in terms of food security, live in the inland regions far from the border markets, and they may be affected by the liberalization depending on the extend to which domestic markets are integrated. Building on previous research on Chinese grain market integration (Huang, Rozelle and Chang 2004a,b) Chapter 3 estimates how much of this shift will be transmitted to inland markets.; Chapter 4 examines the relationship between the changes of grain prices and the changes of the grain consumptions of the rural farm households. Chapter 5 develops a practical method to decompose the impact of a grain price change on the change in farm household grain consumption, and provides the framework with which we will analyze food security. Chapter 6 derives a measure of food security and parameterizes a simulation model to examine the effect of the change of grain price distributions on the grain consumption distributions under alternative scenarios. Chapter 7 compares the consumption distributions and the food security status of farm households under a baseline scenario to alternative post-liberalization scenarios. Chapter 8 concludes this dissertation.