A Study On The Effect Betweeen Agricultural Trade And Agricultural Environment In China

Over the past years since WTO accession, China has become the world’s leading agricultural exporting country and importing country. The development of agricultural trade has played a crucial role in improving farmers’ income, consolidating the fundamental position of agriculture and maintaining the political and economic security. However, with the rapid development of agricultural modernization and the continuous improvement on the trade openness, the agricultural production in China has showed a high-input, high-energy-consumption and high-pollution trend, which has led to a series of agri-environmental issues, such as groundwater pollution, eutrophication, soil structure damage and unqualified agricultural products. As the demands for trade liberalization increase and the problems of agricultural non-point source pollution become more serious, the study on effect between agricultural trade and environment in China has great theoretical and practical significance.On the basis of the review of the literature related to agricultural trade and environment issues, this paper theoretically and empirically analyzes the effect between agricultural trade and environment, and related policies combined with China’s current situation. Theoretical analysis mainly elaborates the fundamental mechanism of agricultural trade on environment, theoretically investigates both positive and negative effects of trade on the environment that may arise, and analyzes the agricultural environmental policy and trade policy under the background of trade openness. The empirical study is divided into two parts:the first part uses the time series model to analyze the long-term equilibrium relationship, short-term dynamic relationship and causal relationship between agricultural trade and agricultural environment in China in reality; the second part uses provincial panel data to give a comparative study on agricultural trade-environmental effect in eastern, central and western China. In addition, under the background of globalization and the concept of sustainable development, this paper also focuses on the coupling relationship between agricultural trade and environment in China. The last part summarizes the paper conclusions and put forward policy suggestions to promote the coordinated development of agricultural trade and environment.In the chapter of theoretical analysis, through the establishment of an agricultural trade-environment general equilibrium model under an open economy, we find that agricultural pollution is influenced by agricultural production scale, production structure, technology, trade barriers, world market price, consumer population and real per capita income level. Agricultural trade openness can affect agricultural environment through scale effect, composition effect, technique effect, income effect and external effects. The above effects could be positive or negative on the environment, which depends on the individual and collective behavior in real life and whether the governments are able to adopt the reasonable and effective policies combined with their own situation.In the case of fixed agriculture environmental standards, agricultural trade openness would improve the environment of the country which imports "dirty agricultural products", and harm the environment of the country which exports "dirty agricultural products". Regarding the fixed agricultural emission permits or quota, the impact of trade openness on agricultural environment could be basically negligible. In terms of the flexible agricultural environmental policies, agricultural trade openness would improve the environment of the country which imports "dirty products"; regarding the country which exports "dirty products", the result would depends on the elasticity of farmers’ income level to agricultural pollution damage. In the long run, reasonable agricultural green barriers may have the technique substitution and imitation effect, and have an incentive impact on the environmental technology of developing countries. However, in the name of environmental protection to impose trade restrictions on developing countries by the green barriers would bring negative effects to the agricultural export enterprises with lower technique. In this case, the rational utilization of the green subsidies could help these agricultural enterprises overcome the limits of environmental quality standards set up by the importing country, and achieve the interiorization of the agricultural pollution external effect.From the results of time series analysis, we find there are long-term equilibrium relationship, short-term dynamic relationship and two-way causal influence between agricultural trade and agricultural environment in China. Although the explanation of agricultural environment to trade is not as good as trade to environment, from the overall results of the analysis, there is a reverse regulatory trend of agriculture environment to foreign trade:better environment will increase farmers’income level and improve the development of agricultural trade, while worse environmental pollution will have an negative impact on income level and trade development. China is still short of an effective market mechanism and price adjustment means with environment. Thus, it is difficult for environment to play a role in trade. There is a vicious circle pattern usually happening that damage the environment first and remedy it then.Based on the analysis of agricultural trade-environment effect in China by region we find:the scale effect is negative, the technique effect is positive, the scale effect dominates the technique effect; the composition effect is negative; the direct trade effects of fertilizer, pesticide and agricultural film are all positive; agricultural environmental pollution is also affected by the trade-induced ERE and KLE, the ERE increases agricultural pollution, while the KLE decreases agricultural pollution. The empirical results confirm the exist of pollution haven hypothesis and factor endowment hypothesis in China’s agricultural environment. The results of regional effects are basically consistent with the theoretical expectations and the results of the whole national effects. The horizontal comparison among the regions indicates the environmental effects of the eastern, central and western region are quite different and have obvious area features. In terms of the trade-induced composition effects:the KLE is significant in the eastern region, the ERE is significant in the central region, the results of the western region depend on different pollution indicators.The research on the coupling relationship between agricultural trade and environment illustrates that agricultural trade and environment can reach an optimum development state and promote each other under the valid policies and healthy economic conditions. The indicators of agricultural trade and environment both increase constantly, and the overall momentum is good. The coupling degrees in recent years are relatively high but there are periodic fluctuations. The coupling coefficient, static degree and dynamic degree all have a clear downward trend after 2010. The growth rate of foreign trade is higher than the improvement rate of environment, and the gap is widening year by year. The coupling relationship is in the short-term cyclical downturn period caused by "catch one and lose another". The environment indicators approximately have a zero growth from 2012 to 2013, and the static coupling degree decreases greatly. It follows that if we stimulate the development of agricultural trade blindly and ignore the agricultural environmental protection, these behaviors will inevitably lead to the stagnation of environmental governance or even the deterioration of environment, and in turn impede the development of agricultural economy.