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Analyzing the effect of advanced agriculture development policy

Author

Listed:
  • Xiaochun Li
  • Qin Shen
  • Chunlei Gu
  • Meng Ni

Abstract

This paper broadens the scope of current theoretical studies, divides rural agriculture into two sectors—advanced and traditional, and takes into consideration the land factor and the urban informal sector. Under the assumption that wages in the advanced agricultural sector are higher than in the traditional agricultural sector, this paper analyzes the effect of policies to promote advanced agricultural development with the comparative static method. The main conclusions of this paper are: wage subsidization of the advanced agricultural sector, in addition to having the same economic impact as interest subsidies on the advanced agricultural sector, could also increase the land employment in the advanced agricultural sector and reduce that in the traditional agricultural sector. Therefore, the effect of wage subsidizing policies is stronger than that of interest subsidies, while land rent subsidies for the advanced agricultural sector have the same economic effect as wage subsidies.

Suggested Citation

  • Xiaochun Li & Qin Shen & Chunlei Gu & Meng Ni, 2013. "Analyzing the effect of advanced agriculture development policy," Journal of Economic Policy Reform, Taylor and Francis Journals, vol. 16(4), pages 349-367, December.
    • Handle: RePEc:taf:jecprf:v:16:y:2013:i:4:p:349-367
    DOI: 10.1080/17487870.2013.812516
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