The Effectiveness Assessment of Agricultural Subsidy Policies on Food Security: Evidence from China’s Poverty-Stricken Villages

Abstract

This paper builds a theoretical model based on a representative peasant household in the neoclassical model, comprehensively considers three types of farmer households in China, and evaluates the effects of the agricultural subsidy policy under equilibrium conditions. Based on the two bottom lines of guaranteeing China’s grain security and ensuring no large-scale return to poverty, this paper uses 2010, 2012, and 2014 tracking survey data from the Mutual Aid Fund for Poverty-Stricken Villages in China to construct an econometric model to evaluate agricultural subsidy effectiveness from the three aspects of farmers’ total sown area, total grain output, and total income. The research draws the following conclusions: (1) Agricultural subsidies can significantly increase the sown area, grain production, and total income of farmers in poverty-stricken areas, which is conducive to improving the farmers’ comprehensive capacity for grain production as well as income, and this conclusion remains valid after performing a series of robustness tests and solving endogeneity problems. (2) The effects of the agricultural subsidy policy are affected by natural conditions, economic development levels, and functional orientation of grain production in different regions, and they have divergent influences on farmers’ total sown area, total output, and total income. (3) Agricultural subsidies boost farmers’ willingness to cultivate grain, reduce land abandonment, and increase the total sown area, total output, and total grain income. The willingness to cultivate grain is an important mechanism that affects the effectiveness of the agricultural subsidy policy.

Do Farm Subsidies Effectively Increase Grain Production? Evidence from Major Grain-Producing Regions of China

“…It is possible that the risk-reducing effect of agricultural subsidies on the low- and middle-income classes is statistically significant, and that agricultural subsidies would then indirectly affect the volume of grain production by affecting the scale of cultivation [ 33 ]. The willingness to grow grain is likewise an important mechanism affecting the effectiveness of agricultural subsidy policies [ 34 ], and reducing the risk of growing grain may increase the willingness to grow and incentivize rural households to expand the scale of cultivation. However, at the same time, this effect is not thought to be identical across recipients, and there are differences in the effects of agricultural subsidy policies on a rural households’ sown area [ 35 ].…”

Decoupling Effect, Driving Factors and Prediction Analysis of Agricultural Carbon Emission Reduction and Product Supply Guarantee in China

“…"The 2022 World Food Security and Nutrition Report" showed that though world food production kept pace with population growth, but 828 million people might be affected by hunger and about 2.3 billion people (29.3%) around the world might face moderate or severe food insecurity in 2021. In the continuation to promote the activities of carbon emission reduction in agricultural field, it is necessary to ensure that everyone can buy and afford the basic food they need at any time [4][5][6][7]. In March 2022, the newspaper of "Farmer's Daily" in China, reported "How to Balance Agricultural Carbon Emission Reduction and Growth under the 'Double Carbon' Goal?-Dialogue with Zhao Lixin, Jin Shuqin and Huang Xianjin", and pointed out that agricultural carbon emission (ACE) reduction and agricultural product supply (APS) guarantee are dialectical unity, and the responsibility for agricultural production cannot be shirked in the name of carbon emission reduction.…”

Sustainable Food Production from a Labor Supply Perspective: Policies and Implications

“…Subsidies are distributed between landowners and actual operators, and the ratio varies greatly among the different studies within a country or between countries [21][22][23]. Another aspect of research is the effect of direct-agriculturalsubsidy policies on food output [24][25][26][27][28]. The output effect of subsidies mainly depends on the change of farmers' production behavior, including the change of crop-planting area, input of agricultural-production means, and agricultural-labor decision.…”

“…The output effect of subsidies mainly depends on the change of farmers' production behavior, including the change of crop-planting area, input of agricultural-production means, and agricultural-labor decision. Some studies show that the direct-subsidy policy has a significant incentive effect on the increase of farmers' planting area and other inputs [17,28,29]. Using tracking survey data, Li et al find that agricultural subsidies can significantly increase the sown area of farmers in povertystricken areas [28].…”

“…Some studies show that the direct-subsidy policy has a significant incentive effect on the increase of farmers' planting area and other inputs [17,28,29]. Using tracking survey data, Li et al find that agricultural subsidies can significantly increase the sown area of farmers in povertystricken areas [28]. But other scholars dispute these conclusions, arguing that decoupled transfer payments do not distort production, and therefore, do not change decisions [30][31][32][33].…”