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Agricultural support and spatial price transmission: evidence from China’s maize sector

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  • Dai, Jiawu
  • Feng, Yuchen
  • Wang, Yan
  • Wang, Xiuqing

Abstract

A market-oriented reform of China’s 2016 Temporary Purchase and Storage Policy (TPSP) is important for improving the price-forming mechanism of maize. Using monthly, province-level panel data and a dynamic spatial econometric model, this study distinguishes the heterogeneous spatial price transmissions of maize under officially supportive and market-oriented regimes. Our empirical results show that the spatial transmission of maize prices was remarkably distorted under the TPSP. Simultaneously, its market-oriented reform has greatly reduced regional price differences and generated a more flexible and much smoother spatial price transmission. The reform provides important insights for improving agricultural support regimes for other products in China.

Suggested Citation

  • Dai, Jiawu & Feng, Yuchen & Wang, Yan & Wang, Xiuqing, 2022. "Agricultural support and spatial price transmission: evidence from China’s maize sector," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association, vol. 26(2), November.
    • Handle: RePEc:ags:ifaamr:335092
    DOI: 10.22004/ag.econ.335092
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