China's New Farm Subsidies

16 Pages Posted: 20 Feb 2006  

H. Frederick Gale

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

Bryan Lohmar

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

Francis C. Tuan

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

Date Written: February 2005

Abstract

In 2004, China entered a new era in its approach to agricultural policy, as it began to subsidize rather than tax agriculture. China introduced direct subsidies to farmers, began to phase out its centuries-old agricultural tax, subsidized seed and machinery purchases, and increased spending on rural infrastructure. The new policies reflect China's new view of agriculture as a sector needing a helping hand. The subsidies are targeted at grain producers, but they do not provide strong incentives to increase grain production.

Keywords: China, agricultural policy, subsidies, agricultural tax, seed, machinery, grain marketing

JEL Classification: Q18, P2, O13

Suggested Citation

Gale, H. Frederick and Lohmar, Bryan and Tuan, Francis C., China's New Farm Subsidies (February 2005). USDA-ERS WRS-05-01. Available at SSRN: https://ssrn.com/abstract=759444 or http://dx.doi.org/10.2139/ssrn.759444

H. Frederick Gale (Contact Author)

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

355 E Street, SW
Washington, DC 20024-3221
United States
202-694-5215 (Phone)

Bryan Lohmar

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

355 E Street, SW
Washington, DC 20024-3221
United States
202-694-5226 (Phone)

Francis C. Tuan

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

355 E Street, SW
Washington, DC 20024-3221
United States

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