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Modeling China’s agriculture support policy effects

Author

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  • Shuquan He

Abstract

Purpose - China has shifted its agricultural policy from tax agriculture to support it. The purpose of this paper is to examine the agricultural policy changes of China in recent years, focussing on the support policy. China supports its agriculture sector through tax elimination, area payment and input subsidy. In this paper, the author intends to evaluate China’s agricultural support policy effect with a modified policy evaluation model (PEM). Design/methodology/approach - The author modifies PEM used by OECD to estimate the effects of these support policies on production and farmer’s income. Findings - The main findings are input subsidy policy has more effect than area payment policy in general; input subsidy policy has more effects on production while area payment has more effects on farmer’s income; and the sensitivity analysis further indicates that input subsidy policy has more influence than area payment as regarding production impact ratio, while area payment has more influence on income impact ratios. Practical implications - Based on these findings, when it comes to the support policy in terms of area payment and input subsidies only, the author puts forward the following policy implications: to increase input subsidy in budgets and expand the covering scope, and to continue implementing area payment policy with more budgets. However, support policies playing an important role in improving production efficiency and marketing support should be given priority. Originality/value - The main contributions of this paper are modifying the OECD PEM to China’s conditions; and quantifying China’s agricultural policy effects.

Suggested Citation

  • Shuquan He, 2016. "Modeling China’s agriculture support policy effects," Journal of Economic Studies, Emerald Group Publishing Limited, vol. 43(5), pages 763-779, October.
    • Handle: RePEc:eme:jespps:v:43:y:2016:i:5:p:763-779
    DOI: 10.1108/JES-05-2015-0071
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    Citations

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    Cited by:

    1. Figueiredo, Paulo N. & Piana, Janaina, 2018. "Innovative capability building and learning linkages in knowledge-intensive service SMEs in Brazil's mining industry," Resources Policy, Elsevier, vol. 58(C), pages 21-33.
    2. John Ssozi & Simplice Asongu & Voxi Heinrich Amavilah, 2019. "The effectiveness of development aid for agriculture in Sub-Saharan Africa," Journal of Economic Studies, Emerald Group Publishing Limited, vol. 46(2), pages 284-305, March.

    More about this item

    Keywords

    China; Agriculture support policy; Policy effects; Policy simulation; C51; O53; Q18;
    All these keywords.

    JEL classification:

    • C51 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Construction and Estimation
    • O53 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East
    • Q18 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Policy; Food Policy; Animal Welfare Policy

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