EconPapers    
Economics at your fingertips  
 

What Drives China’s New Agricultural Subsidies?

Rigoberto Lopez (), Xi He () and Eleonora De Falcis

World Development, 2017, vol. 93, issue C, 279-292

Abstract: China’s agricultural policy has undergone a fundamental transformation in the four decades since the introduction of market reforms in 1978 and now involves a wide array of policy instruments that range from output and input subsidies to public infrastructure expenditures. This article analyzes the political-economic determinants of China’s agricultural subsidy changes using producer subsidy equivalents (PSEs) drawn from annual data from 1984 to 2015 on 16 agricultural commodity sectors that include multiple policy instruments. Empirical results indicate that national factors, such as high rates of economic growth and a lower share of agriculture in the economy, have been the primary drivers of increases in PSEs, and that larger, more geographically concentrated agricultural sectors are more likely to be subsidized at a higher PSE rate. Finally, China’s joining the World Trade Organization in December 2001 led to significant increases in PSEs that were not already explained by internal national or commodity-specific factors. In essence, China’s agricultural subsidy programs and levels increasingly resemble those of developed countries, primarily as a result of economic transformation and the ability to structure agricultural policies within the WTO rules. Moreover, this article predicts that agricultural subsidies will trend slightly upward in the next decade and that the strongest opportunities to export to China will be in animal products or grains that are utilized for feed or processed foods, where the levels of subsidies are predicted to increase but remain lower than for traditional food crops.

Keywords: China; political economy; agricultural policy; WTO; agricultural subsidies (search for similar items in EconPapers)
Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5) Track citations by RSS feed

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0305750X1630211X
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:wdevel:v:93:y:2017:i:c:p:279-292

DOI: 10.1016/j.worlddev.2016.12.015

Access Statistics for this article

World Development is currently edited by O. T. Coomes

More articles in World Development from Elsevier
Bibliographic data for series maintained by Catherine Liu ().

 
Page updated 2022-01-14
Handle: RePEc:eee:wdevel:v:93:y:2017:i:c:p:279-292