On Grain Supply And Food Subsidies

Bread is the staff of life. The grain problem has been critical to the survival and development of human from early ages on. With the development of technology and economy, grain supply increases massively. However, the situation of grain is not so optimistic in the world due to the diverse causes ranging from the worsening of natural environment and the decreasing of cultivated land resource, etc. As a matter of fact,Every country should encounter,more or less, some kind of grain security no matter whether its grain is in short supply or not. Many countries adopt the grain subsidy policy to maintain grain security. But behind high subsidies are also many contradictions and problems. Like other countries China has enhanced the grain subsidization in recent years. From an economic point of view,how to avoid repeating the same mistakes of high subsidies and low efficiency as in Europe and American?What kind of subsidy mode can be effective for grain security?The author tries to seek some reference for solving these questions. It is of practical significance in improving efficient grain subsidy policy and to safeguarding the food security of China and the whole world at large.Adopting the analysis framework of Supply-demand and the normative and positive analytical method,starting from the study on the nature of grain subsidies, this dissertation systematically demonstrates the regulating and controlling mode, in which the government should free the price and provide subsidy to the consumers in the period of grain shortage, while in the period of grain surplus, providing the producers allowance to reduce some elements from grain production in the period of grain surplus. It is of certain theoretical significance in studying the problems of the grain subsidy and macro-control of commodities concerning national economy and the people's livelihood.This dissertation consists six chapters. Chapter one gives reviews and comments on grain subsidy policies at home and abroad. Chapter Two demonstrates that the nature of grain subsidies is that the government buys grain security from the peasants, and that there exists grain security problems both in China and the world. Chapter Three analyzes the behavior of grain producers during the periods of subsidizing consumption, subsidizing circulation and subsidizing production. The author finds that whether peasants grow grain and how much they grow relates to grain yield and the opportunity cost of grain growing. Chapter Four analyzes the behavior of consumers under the subsidy system. It proves that in the time of grain shortage, consumers are willing to buy grain at a high price, while in the time of surplus the proportion of expenditure for grain in the overall resident income decreases and grain wasting becomes common. Chapter Five analyzes the merits and demerits of grain subsidy policies ever implemented in China, including price protection, direct subsidization for production and design the grain subsidy schemes under the conditions of grain shortage and surplus. Chapter Six introduces some grain subsidy policies of Europe, America and Japan. Some useful and enlightening conclusions are reached for China at the end of the dissertation, taking into accounts the current conditions and situations of China.The possible innovations of this paper are as follows. First, it studies the behaviors of producers and consumers under the conditions of subsidizing consumption, subsidizing circulation and subsidizing production. Little research has been conducted on the opportunity cost of grain growing and the behavior of consumers in the time of grain shortage or in the time of grain surplus. Based on the statistics analysis of grain price, benefit of grain growing, cost of grain growing, cost of migrating work and income of urban residents under different subsidy systems,the thesis studies the factors influencing the behavior of grain producers and the behavior of the grain consumers. To a certain degree,it is pioneering because the thesis provides a theoretical basis and policy tools in safeguarding food security and reduce food waste.Secondly,this dissertation sorts out and evaluates the merits and demerits of China grain subsidy systems in the periods of shortage and surplus. It demonstrates more effective methods for grain subsidization and designs a feasible subsidy solution for it. In terms of grain subsidy,the academic seldom identifies the two statuses of inadequate supply for demand and surplus supply for demand, nor the specific subsidy schemes designed for them. This thesis gives a particular solution of subsidizing the urban poor people to buy grains in the time of shortage and subsidizing the fallowing in the time of surplus. So the thesis makes a preliminary explore on the efficiency improvement of the grain subsidy policy that can be better applied to practice.