Adjustment Of Input Subsity Policy And Effect On Agricultural Production & Income

After 20 years' reform and opening, great changes have taken place in China's agricultural sector. At the same time, we must keep a clear mind that agriculture is still a relatively weak sector in China's economy. Agriculture still lags behind others, which makes a conspicuous problem. The growth of peasants' income entrapped in a stagnant state. With the advancement of globalization of the economy around the world, the international trade of agri-product reveals a trend of free trade. After china's entry to the WTO, the biggest impact will be undertaken by producers in agricultural sector , and it will directly affect their income and the quality of life. Hence, priority must be given to the welfare of agri-producers when it comes to adjust policy in agricultural sector. Between income-support policy and subsidy policy, the adjustment of the agri-input subsidy policy, can directly affect the cost of agricultural production and the interest of agri-producers , and consequently affect the sustainable development of agriculture . For there is a hot debate on the subsidy to agri-input at home and abroad, and there leaves rooms for the adjustment of this policy, this dissertation will mainly focus on the adjustment of agri-input subsidy policy.The design objective of agri-input subsidy policy is to reduce production cost, stabilize producers' income, enhance agri-product's capability to compete with other countries'. Inputs subsidy may change the proportion of the inputs , and have different effect on different product, so it has no substantial good to agricultural production and the growth of peasant's income .Because of the lack of quantitative analysis, there is no unanimous conclusion at present. In addition, for agri-input subsidy is prone to arose distortion in agricultural production, it belongs to "amber box policy" and needs to promise to cut. Therefore, there several views on the adjustment of agri-input subsidy policy at present. The majority of experts and scholars always try to use qualitative analysis, they did not carry out quantitative analysis. For those reasons, using positive analysis, to measure subsidy's effects, to determine adjustment's direction, and to bring forward corresponding policy advisement, has a very practical significance to enhance Chinese agri-products' capability to compete, to lessen the impact of China's entry to the WTO's on agriculture.The dissertation is based on the theory of resource allocation, using price-supply reaction model to estimate the increase or decrease of the sown area of different productsunder different plans of the adjustment of the subsidy. Then by using Cobble-Douglas function and program model, the dissertation measures the yield and the profit of every main grain under different adjustment plans, and gives scientific reference to the authority.On analyzing the theory and effect of agri-input subsidy policy and its reform and development in some developed and developing countries, including EU, USA, Japan, Mexico and Egypt, combining Chinese agri-inputs subsidy policy and its reality, this research qualitatively narrates the possible adjustment direction of Chinese agri-inputs subsidy policy, afterwards carry out positive analysis on China's grain production. At first, the dissertation studies sown areas changes of main grains (include paddy, wheat, maize, soybean, broomcorn and millet) and cash crops (such as peanut, rapeseed, cotton, tobacco, sugarcane, beet, apple and orange) in china according to different adjustment projects when agri-input subsidy policy changes.Then, by analyzing the proportion changes of inputs, namely seeds, fertilizer, labor, draught animal, diesel oil for agricultural purpose, electricity for agricultural purpose, the power of agricultural machinery, we can compare the production value per Mu, profit per Mu and total profit under those changes, and draw the conclusion. The conclusion is that under free trade, by abolishing agri-input subsidy, we can get the maximum of output and income. That means we s...