Study On China’s Paddy Supply Response Model

Paddy is the staple food for more than60%of the population in China. Stable supplication of paddy is the key of food security. This paper is based on the basic theory and related papers. First of all, it gives a descriptive analysis of various types of paddy supply fluctuation. Then, the overall model of paddy supply was built. After that, two separated models were built for two important subclasses of paddy:japonica paddy supply response model, and incida paddy supply response model.Finally, the results of the models were carefully estimated and analyzed.The results of the models have shown that:the area adjustment of paddy, has a long delay in response to the price change; the substitution effect of wheat to early indica paddy is obvious due to the trend that wheat prices rose significantly and the price of early indica paddy decrease; the area of early indica paddy is sensitive to non-agricultural employment opportunities, as the opportunities increased, it may cause loss of paddy labor, which may lead to the decreasing of early indica area; paddy area growth is due to the government’s subsidy policies since2004;and mechanical operation becomes the major reason of yield increasing taking the place of the use of chemical fertilizers.Based on the above results, this paper puts forward policy suggestions as follows: First, improve the efficiency of the paddy market, and strengthen the services and guidance to farmers, which can make a rational response according to the market price. Second, encourage multi-cropping in a rational manner. Third, further improve the system of subsidies. Last but not least, encourage mechanical operation and put more effort in agricultural basic research which ensures better income for producers and stable grain supply for the country.