Implication of Grain Policy on Agricultural Restructuring China

Abstract

The paper is aimed to analyse the impact of grain policy on the structure and growth of grain sector in China. The study applied econometric analysis to test empirically the impact of grain policy on the structure and growth of grain sector in China. The study revealed that agricultural policy, especially grain policy, has had a great impact on agricultural production in China. In periods of government mandating increase in grain production, policy has diverted resources, especially land, into grain production, which could otherwise have been used to produce higher value crops. This inevitably results in lower growth in agriculture, as well as in farmers' income. Such policy might be justified by the long history of grain shortage in China, as efficiency in resource allocation is overweighed by the goals in the national security in food supply and in social stability. Show more