What Drives China’s New Agricultural Subsidies?

Abstract

Following market reforms three decades ago, China's agricultural policy has undergone a fundamental transformation and now involves a wide array of policy instruments that range from output and input subsidies to public infrastructure expenditures. Chinese agricultural policies underwent a fundamental shift from farm taxation, typical of developing countries, to farm subsidies and direct payments more typical of developed countries. i Because the People's Republic of China is the world's largest importer, producer, and consumer of agricultural products, its policy changes have significant impact on world markets, including developing countries that rely on agricultural trade for export revenues or on imports of agricultural staples to ensure food security. This highlights the need to better understand the drivers of policy changes in China. After its establishment in 1949, the new Chinese regime adopted a Soviet-style, heavy industry-oriented development strategy as its main economic objective. Until 1978, agricultural production was organized into cooperatives and people's communes, a form of supracooperative (Lin, 1990; Party History Research Center of the CPC Central Committee of China, 2011), with the government generally procuring commodities at below-market prices via state monopsonies to subsidize urban consumption and industrial development (Carter et al., 2002). As urban residents' incomes and industrial production subsequently increased, widespread urban food subsidies became less necessary amid increasing concerns about the widening gap between rural and urban incomes and insufficient investments in agriculture. These factors

State Regulation in China in the Light of Its WTO Membership

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“…As only China has remained a communist state, in which state influence over the economy in different forms has already existed, discussion held by economists, politicians and the civil society on different forums is very often led by the idea if China has really liberalised its market for suppliers from foreign countries. The subject of frequent criticism is especially the existence of state-owned enterprises (SOEs) in China with respect to the fact that they are connected with subsidisation (Lee et al, 2017;Lopez et al, 2017) and other types of preferential treatment (OECD, 2016), including privileged access to information, tax concessions, preferential financing and other measures that deform market conditions. On the whole, state-owned enterprises are global competitors and they might also be more willing to shoulder political risk (OECD, 2016).…”

Behavior-Based Pricing of Organic and Conventional Agricultural Products Based on Green Subsidies

“…When 2 3 < x 0 < 1, the inherited market of organic agricultural products is dominant, and the pricing strategies of the two types of agricultural product enterprises are as follows:…”

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Policy Support and Agricultural Development Within China’s First 10 Years of Reform: Strategies and Achievements

“…Prior to the great reform of over four decades ago, Chinese economy was backward, poor and stagnant (Morrison, 2018). Development in China over the past four decades has passed through various policy transformations which could be traced back to the change in land tenure system where the household responsibility system (contract responsibility system) was used to replace the collective land ownership system (Jiancheng, Jinbao, Shaoyong, & Qiang, 2008;Lin, 1992;Lopez, He, & De Falcis, 2017). This was first introduced at the countryside of Anhui Province and later adopted as a nationwide practice (Lau & Zheng, 2017;Zhao & Tang, 2018) which brought progressive change in the Chinese agricultural and rural economic sectors leading to sustained development (Jiancheng et al, 2008).…”