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Growth and Evolution in China's Agricultural Support Policies

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  • Gale, Fred

Abstract

China is perhaps the most prominent example of a developing country that has transitioned from taxing to supporting agriculture. In recent years, Chinese price supports and subsidies have risen at an accelerating pace after they were linked to rising production costs. Per-acre subsidy payments to grain producers now equal 7 to 15 percent of those producers’ gross income, but grain payments appear to have little influence on production decisions. Chinese authorities began raising price supports annually to bolster incentives and Chinese prices for major farm commodities are rising above world prices, helping to attract a surge of agricultural imports. U.S. agricultural exports to China tripled in value during the period when China’s agricultural support was accelerating. Overall, China’s expansion of support is loosely constrained by World Trade Organization (WTO) commitments, but the country’s price-support programs could exceed WTO limits in coming years. Chinese officials promise to continue increasing domestic policy support for agriculture, but the mix of policies may evolve as the Chinese agricultural sector becomes more commercialized and faces competitive pressures.

Suggested Citation

  • Gale, Fred, 2013. "Growth and Evolution in China's Agricultural Support Policies," Economic Research Report 155385, United States Department of Agriculture, Economic Research Service.
    • Handle: RePEc:ags:uersrr:155385
    DOI: 10.22004/ag.econ.155385
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    References listed on IDEAS

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    Cited by:

    1. Jie Lyu & Xiaolei Li, 2019. "Effectiveness and Sustainability of Grain Price Support Policies in China," Sustainability, MDPI, vol. 11(9), pages 1-13, April.
    2. Beckman, Jayson & Dyck, John & Heerman, Kari, 2017. "The Global Landscape of Agricultural Trade, 1995-2014," Economic Information Bulletin 265270, United States Department of Agriculture, Economic Research Service.
    3. Tian, Qing & Holland, John H. & Brown, Daniel G., 2016. "Social and economic impacts of subsidy policies on rural development in the Poyang Lake Region, China: Insights from an agent-based model," Agricultural Systems, Elsevier, vol. 148(C), pages 12-27.
    4. Na Lu & Kira M. Villa, 2022. "Agricultural support and contaminated spillovers: The effects of agricultural water pollution on adult health in China," Applied Economic Perspectives and Policy, John Wiley & Sons, vol. 44(2), pages 788-821, June.
    5. Chavas, Jean-Paul & Li, Jian, 2016. "On the Economics of Commodity Price Dynamics and Price Volatility," 2016 Annual Meeting, July 31-August 2, Boston, Massachusetts 235070, Agricultural and Applied Economics Association.
    6. Zhang, Rui & Tian, Qing & Jiang, Luguang & Crooks, Andrew & Qi, Shuhua & Yang, Ruixin, 2018. "Projecting cropping patterns around Poyang lake and prioritizing areas for policy intervention to promote rice: A cellular automata model," Land Use Policy, Elsevier, vol. 74(C), pages 248-260.
    7. Gale, Fred & Arnade, Carlos, 2015. "Effects of Rising Feed and Labor Costs on China’s Chicken Price," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association, vol. 18(A), pages 1-14, July.
    8. Wang, Sun Ling & Huang, Jikun & Wang, Xiaobing & Tuan, Francis, 2019. "Are China’s regional agricultural productivities converging: How and why?," Food Policy, Elsevier, vol. 86(C), pages 1-1.
    9. Lai, Wangyang, 2017. "Pesticide use and health outcomes: Evidence from agricultural water pollution in China," Journal of Environmental Economics and Management, Elsevier, vol. 86(C), pages 93-120.
    10. Yao, Guolin & Hertel, Thomas W. & Taheripour, Farzad, 2017. "Understanding China's Soybean Boom from Historical Validation," 2017 Annual Meeting, July 30-August 1, Chicago, Illinois 258373, Agricultural and Applied Economics Association.
    11. Hao Wang & Jan Fidrmuc & Qi Luo & Mingzhong Luo, 2018. "What Stayers Do? Capital Endowments and On-Farm Transitions in Rural China," CESifo Working Paper Series 7306, CESifo.
    12. Li, J. & Chavas, J.-P., 2018. "How Have China s Agricultural Price Support Policies Affected Market Prices?: A Quantile Regression Evaluation," 2018 Conference, July 28-August 2, 2018, Vancouver, British Columbia 277557, International Association of Agricultural Economists.
    13. Tristan Kenderdine, 2018. "Insurance Plus Futures: Agricultural Commodity Price Reform in China," Asia and the Pacific Policy Studies, Wiley Blackwell, vol. 5(2), pages 331-346, May.
    14. Tian, Qing & Lemos, Maria Carmen, 2018. "Household Livelihood Differentiation and Vulnerability to Climate Hazards in Rural China," World Development, Elsevier, vol. 108(C), pages 321-331.
    15. Feng Ye & Zhongna Yang & Mark Yu & Susan Watson & Ashley Lovell, 2023. "Can Market-Oriented Reform of Agricultural Subsidies Promote the Growth of Agricultural Green Total Factor Productivity? Empirical Evidence from Maize in China," Agriculture, MDPI, vol. 13(2), pages 1-20, January.
    16. Joseph Glauber & Simon Lester, 2020. "China - Tariff Rate Quotas for Certain Agricultural Products: Against the Grain: Can the WTO Open Chinese Markets?," RSCAS Working Papers 2020/91, European University Institute.
    17. MacDonald, Stephen & Gale, Fred & Hansen, James, 2015. "Cotton Policy in China," MPRA Paper 70863, University Library of Munich, Germany.
    18. Hong, Yu & Berentsen, Paul & Heerink, Nico & Shi, Minjun & van der Werf, Wopke, 2019. "The future of intercropping under growing resource scarcity and declining grain prices - A model analysis based on a case study in Northwest China," Agricultural Systems, Elsevier, vol. 176(C).
    19. Arnade, Carlos & Cooke, Bryce & Gale, Fred, 2017. "Agricultural price transmission: China relationships with world commodity markets," Journal of Commodity Markets, Elsevier, vol. 7(C), pages 28-40.
    20. Brink, Lars & Orden, David, 2017. "The United States WTO Complaint on China’s Agricultural Domestic Support: Preliminary Observations (Paper)," Proceedings Issues, 2016: Climate Change and International Agricultural Trade in the Aftermath of COP21, December 11-13, 2016, Scottsdale, Arizona 253002, International Agricultural Trade Research Consortium.
    21. Rada, Nicholas & Wang, Chenggang & Qin, Lijian, 2015. "Subsidy or market reform? Rethinking China’s farm consolidation strategy," Food Policy, Elsevier, vol. 57(C), pages 93-103.
    22. Gale, Fred & Hansen, James & Jewison, Michael, 2015. "China’s Growing Demand for Agricultural Imports," Economic Information Bulletin 198800, United States Department of Agriculture, Economic Research Service.

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    Agricultural and Food Policy; International Development; International Relations/Trade;
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