Research On The Effects Of Grain Farmers’ Income Subsidy Policy In China

Ensuring national food security is always a major issue of our government. The new National Food Security Strategy was proposed in the Central Economic Work Conference of 2013, and ensuring that “cereals can be basically self-sufficient while rations of foodstuffs are absolutely secured” has become the core strategic requirements of China’s food security. However, food production, especially rations production, faced a growing number of conflicts in recent years,, especially since the “eleven-year consecutive increasing”, for instance, the differences between domestic and international food prices, the increasing impacts of the decline of comparative effectiveness, the constantly tightening constraints of resources and environment and the growing demands of urban and rural residents for the quality and safety of grains. Being the significant policy tool to ensure absolute safety of rations, China’s grain subsidies play an important role. Considering the background mentioned above, this study researches the effects of China’s grain farmers’ income subsidy policy. Besides, suggestions on further improvement of China’s grain subsidy policy are put forward.First, based on perspective of welfare economics, this dissertation studies the economic impact of China’s grain farmers’ income subsidy policy. Secondly, questionnaire was designed focusing on related indicators of the effects of income subsidy policy. Selecting Heilongjiang, Shandong and Hubei provinces as the investigation sites, the writer went to 30 administrative villages of 7 towns of 6 counties by random sampling survey and received 297 valid questionnaires. According to the data obtained by investigation, statistical analyses on the effects of China’s grain farmers’ income subsidy policy are made. What’s more, by using indicators such as farmers’ material capital input in grain production, the actual acreage of grain and farmers’ grain growing willingness and using some models including double logarithmic function model, multiple linear regression model and ordered logistic multivariate model, this article make empirical analyses on the effects of the policy.Conclusions are as follows: China’s grain farmers’ income subsidy policy brings benefits to both producers and consumers, while consumers get more benefits; China’s grain farmers’ income subsidy policy increases financial burden of the government and results in the total welfare loss and market inefficiencies; income subsidies account for only 1.16% of total farm household income, thus the policy plays a limited role in increasing household income; the factors affecting farmers’ material capital input in grain production consist of “gender of household head”, “uses of grain subsidies”, “areas” and “local non-farm employment opportunities”; given the fact that income subsidies account for only 17.9% of farmers’ costs of food production, the policy has no effect on the farmers’ decisions of food production inputs; the factors affecting grain area are comprised of “early grain area”, “age of household head”, “education level of household head” and “the size of the labor force”, not including the income subsidies; the factors affecting farmers’ grain growing willingness are made up of “age of household head”, “sideline activity” and “total cultivated area”, also not including the income subsidies.According to the conclusions above, policy recommendations are proposed as follows. First, in order to be more precise and efficient, the mechanism of subsidies linked to food production is supposed to be explored actively. Secondly, the directivity of income subsidies should be enhanced, so as to guarantee the grain income of the new type of agricultural management main body. What’s more, land transfer subsidies mechanism is expected to be explored and socialized service system of food production is expected to be improved.