Grain Price Stability And Farmer Decision Making In China
In this paper we find that real grain prices in China have displayed increased volatility in the past decade. This is true for rice, wheat, corn, and for most of provinces. Farmers in China are found to be risk averse because when they make acreage allocation decisions. Given the widespread access to land in China, farmers mostly respond negatively in their sown area decisions towards price risk. The large price variations from 1984-1995 may have contributed to the slowdown in agricultural output growth from 1984-1995.
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