IDEAS home Printed from https://ideas.repec.org/a/bla/chinae/v14y2006i6p58-69.html
   My bibliography  Save this article

China's New Rural Income Support Policy: Impacts on Grain Production and Rural Income Inequality

Author

Listed:
  • Nico Heerink
  • Marijke Kuiper
  • Xiaoping Shi

Abstract

This paper analyses the impact of agricultural tax abolition and direct income payments to grain farmers on grain production and rural inequality in China. To separate the impact of the income support measures from recent price trends for grains and inputs, and to account for differences in household responses, we use a village-level general equilibrium model that we calibrate for two villages with different degrees of market access in Jiangxi province. The results show that the income support policy does not reach its goal of promoting grain production. The increased incomes allow farm households to buy more inputs for livestock production and involve other activities that are more profitable than grain farming. Selling of rice outside the villages declines more than rice production, because households in the villages consume more rice when incomes rise. We further find that the income support measures tend to reduce income within a village, but that tax abolition tends to widen income inequality between villages. Copyright The official journal of The Institute of World Economics and Politics, Chinese Academy of Social Sciences (CASS) 2006.

Suggested Citation

  • Nico Heerink & Marijke Kuiper & Xiaoping Shi, 2006. "China's New Rural Income Support Policy: Impacts on Grain Production and Rural Income Inequality," China & World Economy, Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 14(6), pages 58-69.
  • Handle: RePEc:bla:chinae:v:14:y:2006:i:6:p:58-69
    as

    Download full text from publisher

    File URL: http://www.blackwell-synergy.com/doi/abs/10.1111/j.1749-124X.2006.00045.x
    File Function: link to full text
    Download Restriction: Access to full text is restricted to subscribers.

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Bowlus, Audra J. & Sicular, Terry, 2003. "Moving toward markets? Labor allocation in rural China," Journal of Development Economics, Elsevier, vol. 71(2), pages 561-583, August.
    2. Albert Park & Hehui Jin & Scott Rozelle & Jikun Huang, 2002. "Market Emergence and Transition: Arbitrage, Transaction Costs, and Autarky in China's Grain Markets," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 84(1), pages 67-82.
    3. Hans Löfgren & Sherman Robinson, 1999. "Nonseparable Farm Household Decisions in a Computable General Equilibrium Model," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 81(3), pages 663-670.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Wang, Xiaxin & Shen, Yan, 2014. "The effect of China's agricultural tax abolition on rural families' incomes and production," China Economic Review, Elsevier, vol. 29(C), pages 185-199.
    2. Jim Hansen & Francis Tuan & Linxiu Zhang & Agapi Somwaru, 2011. "Do China's agricultural policies matter for world commodity markets?," China Agricultural Economic Review, Emerald Group Publishing, vol. 3(1), pages 6-25, January.
    3. Ding, Shijun & Meriluoto, Laura & Reed, W. Robert & Tao, Dayun & Wu, Haitao, 2011. "The impact of agricultural technology adoption on income inequality in rural China: Evidence from southern Yunnan Province," China Economic Review, Elsevier, vol. 22(3), pages 344-356, September.
    4. repec:wyi:journl:002171 is not listed on IDEAS
    5. 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.
    6. Shijun Ding & Laura Meriluoto & W. Robert Reed & Daoyun Tao & Haitao Wu, 2010. "The Impact of Agricultural Technology Adoption of Income Inequality in Rural China," Working Papers in Economics 10/41, University of Canterbury, Department of Economics and Finance.
    7. Zhang, Yingqiang & Eriksson, Tor, 2010. "Inequality of opportunity and income inequality in nine Chinese provinces, 1989-2006," China Economic Review, Elsevier, vol. 21(4), pages 607-616, December.
    8. Binjian, Binjian & Sakamoto, Hiroshi, 2013. "Market Reform and Income Distribution in China : A CGE–Microsimulation Approach," AGI Working Paper Series 2013-13, Asian Growth Research Institute.
    9. Bennett, Michael T. & Mehta, Aashish & Xu, Jintao, 2011. "Incomplete property rights, exposure to markets and the provision of environmental services in China," China Economic Review, Elsevier, vol. 22(4), pages 485-498.
    10. Yi, Fujin & Sun, Dingqiang & Zhou, Yingheng, 2015. "Grain subsidy, liquidity constraints and food security—Impact of the grain subsidy program on the grain-sown areas in China," Food Policy, Elsevier, vol. 50(C), pages 114-124.
    11. Meng, Lei, 2012. "Can grain subsidies impede rural–urban migration in hinterland China? Evidence from field surveys," China Economic Review, Elsevier, vol. 23(3), pages 729-741.
    12. Yi, Fujin & Sun, Dingqiang, 2014. "Grain Subsidy, Liquidity Constraints and Food security—Impact of the Grain Subsidy Program on the Grain-Sown Areas in China," 2014 Annual Meeting, July 27-29, 2014, Minneapolis, Minnesota 169779, Agricultural and Applied Economics Association.
    13. Li Jiang & Yonghui Zhang, 2016. "Modeling Urban Expansion and Agricultural Land Conversion in Henan Province, China: An Integration of Land Use and Socioeconomic Data," Sustainability, MDPI, Open Access Journal, vol. 8(9), pages 1-12, September.

    More about this item

    JEL classification:

    • O20 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - General
    • Q12 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Micro Analysis of Farm Firms, Farm Households, and Farm Input Markets
    • R15 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Econometric and Input-Output Models; Other Methods

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:chinae:v:14:y:2006:i:6:p:58-69. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Wiley-Blackwell Digital Licensing) or (Christopher F. Baum). General contact details of provider: http://edirc.repec.org/data/iwepacn.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.