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Growth and Evolution in China's Agricultural Support Policies

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  • Gale, Fred

Abstract

China is perhaps the most prominent example of a developing country that has transitioned from taxing to supporting agriculture. In recent years, Chinese price supports and subsidies have risen at an accelerating pace after they were linked to rising production costs. Per-acre subsidy payments to grain producers now equal 7 to 15 percent of those producers’ gross income, but grain payments appear to have little influence on production decisions. Chinese authorities began raising price supports annually to bolster incentives and Chinese prices for major farm commodities are rising above world prices, helping to attract a surge of agricultural imports. U.S. agricultural exports to China tripled in value during the period when China’s agricultural support was accelerating. Overall, China’s expansion of support is loosely constrained by World Trade Organization (WTO) commitments, but the country’s price-support programs could exceed WTO limits in coming years. Chinese officials promise to continue increasing domestic policy support for agriculture, but the mix of policies may evolve as the Chinese agricultural sector becomes more commercialized and faces competitive pressures.

Suggested Citation

  • Gale, Fred, 2013. "Growth and Evolution in China's Agricultural Support Policies," Economic Research Report 155385, United States Department of Agriculture, Economic Research Service.
  • Handle: RePEc:ags:uersrr:155385
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    File URL: http://purl.umn.edu/155385
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    References listed on IDEAS

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    1. Lohmar, Bryan & Gale, H. Frederick, Jr. & Tuan, Francis C. & Hansen, James M., 2009. "China's Ongoing Agricultural Modernization: Challenges Remain After 30 Years of Reform," Economic Information Bulletin 58316, United States Department of Agriculture, Economic Research Service.
    2. Gale, H. Frederick, Jr. & Buzby, Jean C., 2009. "Imports From China and Food Safety Issues," Economic Information Bulletin 58620, United States Department of Agriculture, Economic Research Service.
    3. Huang, Jikun & Wang, Xiaobing & Zhi, Huayong & Huang, Zhurong & Rozelle, Scott, 2011. "Subsidies and distortions in China’s agriculture: evidence from producer-level data," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 55(1), March.
    4. Gale, H. Frederick, Jr. & MacDonald, Stephen, 2013. "Untangling China's Cotton Policy (Power Point)," Agricultural Outlook Forum 2013 146854, United States Department of Agriculture.
    5. Huang, Jikun & Wang, Xiaobing & Rozelle, Scott, 2013. "The subsidization of farming households in China’s agriculture," Food Policy, Elsevier, vol. 41(C), pages 124-132.
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    Cited by:

    1. Gale, Fred & Arnade, Carlos, 2015. "Effects of Rising Feed and Labor Costs on China’s Chicken Price," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association (IFAMA), vol. 18(A).
    2. MacDonald, Stephen & Gale, Fred & Hansen, James, 2015. "Cotton Policy in China," MPRA Paper 70863, University Library of Munich, Germany.
    3. Rada, Nicholas & Wang, Chenggang & Qin, Lijian, 2015. "Subsidy or market reform? Rethinking China’s farm consolidation strategy," Food Policy, Elsevier, vol. 57(C), pages 93-103.
    4. Gale, Fred & Hansen, James & Jewison, Michael, 2015. "China’s Growing Demand for Agricultural Imports," Economic Information Bulletin 198800, United States Department of Agriculture, Economic Research Service.
    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. Brink, Lars & Orden, David, 2017. "The United States WTO Complaint on China’s Agricultural Domestic Support: Preliminary Observations (Paper)," Proceedings Issues, 2016: Climate Change and International Agricultural Trade in the Aftermath of COP21, December 11-13, 2016, Scottsdale, Arizona 253002, International Agricultural Trade Research Consortium.
    7. Chavas, Jean-Paul & Li, Jian, 2016. "On the Economics of Commodity Price Dynamics and Price Volatility," 2016 Annual Meeting, July 31-August 2, 2016, Boston, Massachusetts 235070, Agricultural and Applied Economics Association.
    8. repec:eee:jeeman:v:86:y:2017:i:c:p:93-120 is not listed on IDEAS

    More about this item

    Keywords

    China; agricultural subsidies; price supports; direct payments; grain; World Trade Organization; Agricultural and Food Policy; International Development; International Relations/Trade;

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