Growth and Evolution in China's Agricultural Support Policies

60 Pages Posted: 10 Sep 2013

See all articles by H. Frederick Gale

H. Frederick Gale

U.S. Department of Agriculture (USDA) - Economic Research Service (ERS)

Date Written: August 2013


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.

Keywords: China, agricultural subsidies, price supports, direct payments, grain, World Trade Organization

Suggested Citation

Gale, H. Frederick, Growth and Evolution in China's Agricultural Support Policies (August 2013). USDA-ERS Economic Research Report No. 153, Available at SSRN:

H. Frederick Gale (Contact Author)

U.S. Department of Agriculture (USDA) - Economic Research Service (ERS) ( email )

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