Understanding China's grain procurement policy from a perspective of optimization
AbstractThis paper develops an optimization model to analyze the policy formulation under China's dual-track grain procurement system. By capturing the redistribution objective and the urban food security objective in a political preference function, we provide some rigorous explanations of three important aspects of China's grain policies: the choice of the dual-track procurement system over the lump-sum tax scheme as a means of extracting economic surpluses from the grain sector; the suppression of the procurement price to its minimum until the mid-1990s; and the switch from taxing to subsidizing grain production at end-1996. Our findings underscore the paramount importance of the urban food security objective behind the evolution of China's grain procurement policy, including the liberalization of the system in the 2000s.
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Bibliographic InfoArticle provided by Elsevier in its journal China Economic Review.
Volume (Year): 21 (2010)
Issue (Month): 4 (December)
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Web page: http://www.elsevier.com/locate/chieco
China Grain procurement policy Political preference function Sectoral income distribution Food security;
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