Understanding China's grain procurement policy from a perspective of optimization

Esther Y.P. Shea

China Economic Review, 2010, vol. 21, issue 4, 639-649

Abstract: This paper develops an optimization model to analyze the policy formulation under China's dual-track grain procurement system. By capturing the redistribution objective and the urban food security objective in a political preference function, we provide some rigorous explanations of three important aspects of China's grain policies: the choice of the dual-track procurement system over the lump-sum tax scheme as a means of extracting economic surpluses from the grain sector; the suppression of the procurement price to its minimum until the mid-1990s; and the switch from taxing to subsidizing grain production at end-1996. Our findings underscore the paramount importance of the urban food security objective behind the evolution of China's grain procurement policy, including the liberalization of the system in the 2000s.

Keywords: China; Grain; procurement; policy; Political; preference; function; Sectoral; income; distribution; Food; security (search for similar items in EconPapers)
Date: 2010
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:chieco:v:21:y:2010:i:4:p:639-649

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