Impacts of China’s Minimum Grain Procurement Price Program on Agrochemical Use: A Household-Level Analysis

Min Su, Nico Heerink, Peter Oosterveer, Tao Tan and Shuyi Feng
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Min Su: China Resources, Environment and Development Academy, Nanjing Agricultural University, Nanjing 210095, China
Peter Oosterveer: Environmental Policy Group, Wageningen University, 6706 KN Wageningen, The Netherlands
Tao Tan: China Resources, Environment and Development Academy, Nanjing Agricultural University, Nanjing 210095, China
Shuyi Feng: China Resources, Environment and Development Academy, Nanjing Agricultural University, Nanjing 210095, China

Agriculture, 2021, vol. 11, issue 10, 1-20

Abstract: China’s minimum grain procurement price program aims to boost grain production and ensure food self-sufficiency. It may also affect the already very high levels of chemical fertilizer and pesticides consumption, but little is known about these potential side-effects. In this paper, we apply panel data regression techniques to a large rural household-level data set for the period 1997–2010 to examine whether and how the minimum grain procurement price program affected households’ agrochemical use. We find that the minimum grain procurement price program negatively affected both chemical fertilizer and pesticides use, with pesticides use being more responsive than the use of fertilizer. The higher wheat and rice prices that resulted from the program stimulated the use of agrochemicals, but they also stimulated area expansion which contributed to lower agrochemical use per unit of land. These counteracting indirect effects were overshadowed by the large negative direct effect of the minimum procurement price of rice on the use of fertilizer and pesticides.

Keywords: minimum grain procurement price; fertilizer; pesticides; sown area; households; China (search for similar items in EconPapers)
JEL-codes: Q1 Q10 Q11 Q12 Q13 Q14 Q15 Q16 Q17 Q18 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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