A Research On The Effects And Reform Of Grain Subsidy Policies In Jiangsu Province

Agriculture is the foundation of one country’s economic, Changes in grainproduction is directly related to the country’s food security. Because of the heavyagricultural tax and the low price of grain, the comparative advantage of grainproduction was very thin, farmers were seriously frustrated. As a result, Chinese foodproduction had continued to decline in the period of1997to2003.China implements aseries of reforms on agriculture form2004, including abolition of agricultural tax anddirect subsidies to farmers. Now, Chinese grain subsidy policies include four differentspices: direct subsidy for grain grower, subsidy for agricultural material, subsidy forgood seeds and subsidy for agricultural machinery purchasing. Our government’sexpenditure on grain subsidy has continued to increased in the past7years, It is veryimportant for us to know how these polices act and what about their actual effects.Jiangsu province is a major grain producing areas of China, this dissertation makes asystematic research on the grain subsidy policies’ effect in Jiangsu province to supplysome evidence and basis for Chinese policies of grain subsidy to reform.The first part of this dissertation studies on the theory about grain subsidy andJiangsu province’s practical act on grain subsidy policies. The second part is the coreof this dissertation which elevating the systematic effects of the grain subsidy policeson economics, environment and society. The result shows that grain subsidy policesbring a good economical effects by promoting grain production and adding farmer’sincome, But this effect falls off gradually. The policies perform better on addingfamer’s income than on improving grain production.The policies works better onincreasing grain planting area than on increasing its’ production per unit area. Thegeneral subsidy performs better than special subsidy. The grain subsidy encouragesthe use of fertilizer and farm chemicals thus polluting the environment and reducinggrain’s quality. grain subsidy consolidates the social stability in rural areas, but it isnot conducive to large-scale food production, and it hinders the marketization of grainproduction and transaction. Generally, the grain subsidy policies in Jiangsu bring agood short-term effect but does not meet the principles of sustainable development ofagriculture. The third part of this thesis sets a long-term and a short-term targets for Chinesegrain subsidy policies following the principal of sustainable of development.Corresponding to the targets we indicate the paths to the long-term targets andmethods to the short-term targets. The main paths include increasing financial supportto agriculture, Improving the agricultural infrastructure, Increasing grain subsidiesaccounted for the proportion of fiscal expenditure on agriculture, simplify the methodof subsidies, implementing environment subsidy and adhere to developing large-scaleand professional grain production. Besides that we should supply direct subsidy tomore kinds of grain, formulate the minimum purchase price for grain properly, supplydifferent farmer with different grain subsidy and carry out new kinds of grain subsidywhich is essential to the sustainable of agricultural development.