The Nature and Distortions to Agricultural Incentives in China and Implications of WTO Accession

UC Davis, Dept. of Agricultural & Resource Economics Working Paper No. 02-006

71 Pages Posted: 21 Oct 2002

See all articles by Jikun Huang

Jikun Huang

Chinese Academy of Sciences (CAS)

Scott Rozelle

University of California, Davis - Department of Agricultural and Resource Economics

Date Written: February 2002

Abstract

The overall goal of our paper is to understand how WTO will affect the agriculture sector in China. To accomplish this goal we have two specific objectives. First, we seek to provide measures of the distortions in China's agricultural sector at a time immediately prior to the nation's accession to WTO. Second, we seek to assess how well integrated China's markets are in order to understand which areas of the country and which segments of the farming population will likely be isolated from or affected by the changes that WTO will bring. Ultimately, with a knowledge of the size and magnitude of the impacts, researchers will be better able to begin working on understanding how the policies that WTO will impose on China will change the gap between the domestic and international price and affect imports and exports, domestic production and production, income and poverty.

To meet these objectives, the rest of the paper is organized as following. First we will seek to provide a context for our analysis of the current distortions that affect China's agriculture. Second, after briefly discussing our data and way of collecting information for calculating the gap in prices between international and domestic markets, we present measures of NPRs for a set of commodities for China. The next section then discusses how these distortions should be expected to change as China implements its WTO obligations and gains access (or not) to the promises that were made to it. The fourth section of the paper then analyzes the transmission of prices through the economy. The final section discusses the implication of our findings.

Keywords: Distortion of agricultural sector, effect of WTO on agriculture

JEL Classification: Q13, Q18

Suggested Citation

Huang, Jikun and Rozelle, Scott, The Nature and Distortions to Agricultural Incentives in China and Implications of WTO Accession (February 2002). UC Davis, Dept. of Agricultural & Resource Economics Working Paper No. 02-006, Available at SSRN: https://ssrn.com/abstract=331781 or http://dx.doi.org/10.2139/ssrn.331781

Jikun Huang

Chinese Academy of Sciences (CAS) ( email )

Center for Chinese Agricultural Policy (CCAP)
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Scott Rozelle (Contact Author)

University of California, Davis - Department of Agricultural and Resource Economics ( email )

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Davis, CA 95616
United States
530-752-9897 (Phone)

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