Reseach On The Effect Of Comprehensive Agricultural Subsidies Implement In Fujian

The comprehensive agricultural materials subsidy (“the Subsidy”) isdirectly given by the State to the farmers to stimulate their enthusiasm,offset the increase in their expenditure and lower their cost in grainproduction. That’s to say, the Subsidy aims directly to offset the farmers’increase in expenditure for agricultural materials, and ultimately to boosttheir grain yield and income. Since2006, Fujian Province began to implementthe Subsidy policy, which involved farmers from82county-leveladministrative territories (accounting for96.5%of all the county-leveladministrative territories in the province). What’s the effect of the Subsidy?What changes have taken place in the grain production behaviors of farmerssupported by the Subsidy? Has the Subsidy increased farmers’ income? Allthese questions test the effectiveness of this policy.In an effort to explore the effectiveness of the Subsidy of Fujian Province,this paper places emphasis on the following respects:1. Farmers’ Understanding of the Subsidy policyBased on the farmers-related survey data, this research comes up withthree findings as follows:(1) the farmers’ awareness of the Subsidy policyremains low.7years after the Subsidy policy was put into effect, nearly15%of the farmers surveyed still do not know their accessibility to the Subsidy inpurchasing agricultural materials;70.2%do not know well or at all the detailsof the Subsidy policy;88.2%do not know exactly the coverage of the Subsidypolicy.(2) the farmers’ understanding of the Subsidy policy began to bedivided. A majority of them commented positively on the Subsidy policy, but10%did not think highly of it. A large proportion of the farmers believed thatthe Subsidy policy fails to incentivize them in grain production, but amajority of them believed the Subsidy policy boosted their income.(3) thepersonal and family conditions of the farmers have an impact on theirunderstanding of the Subsidy policy, and the communication andimplementation of the policy exert an particularly important impact on thefarmers’ understanding.2. Farmers’ Satisfaction with the Subsidy Policy and the Factors inRelationBased on the data obtained from surveys among the farmers, thisresearch makes analyses on the farmers’ satisfaction with the Subsidy policy,and furthermore, on the factors that affects such satisfaction based on theLogistic regression model.The research finds that the farmers’ satisfaction with the Subsidy policystood at the level of56%. This means that, among all the farmers surveyed,56%of them believed that the Subsidy policy is good or very good. In otherwords, a majority of the farmers commented positively on the Subsidy policy.The factors that affect the farmers’ satisfaction with the Subsidy policy are many. In fact, the growing area, direct grain subsidy policy, directfertilizer and pesticide subsidy policy and direct fine seed subsidy policy areoutstanding in affecting the farmers’ satisfaction with the Subsidy policy.3. The Impact of Subsidy Policy on the Farmers’ Grain ProductionBehaviorsEmpirical research based on the Logistics model and the multiple linearregression model finds that the prominent factors affecting the farmers’ grainproduction decision making include the farmers’ anticipation on their incomefrom grain production, the labor force available for agricultural production,the area of land contracted, the farmers’ view on the state minimum pricefor grain purchase, the farmers’ view on the direct grain subsidy rate, and thefarmers’ view on the comprehensive agricultural materials subsidy policy, etc.Of them, the farmers’ anticipation on their income from grain production isthe most crucial factor that works throughout the farmers’ decision makingprocess regarding whether or not and to what extent to increase the growingarea. The higher the farmers’ satisfaction level with the state minimum pricefor grain purchase, the direct grain subsidy and the comprehensiveagricultural materials subsidy, the better the farmers’ anticipation on theirincome from grain production and the higher their enthusiasm in increasingtheir rice growing area.4. The Impact of the Subsidy on the Farmers’ Income GrowthThe multiple regression model for the farmers’ income growth showsthat the Subsidy has a significant impact on the farmers’ income growth. TheSubsidy is in a positive relationship with the farmers’ income growth. As apart of the income from grain production, it plays an important role inboosting the farmers’ income.The research also finds out the following problems while implementingthe Subsidy policy: the Subsidy rate needs to be raised; the Subsidydistribution procedures are not transparent and standardized; and somefarmers’ interest is not secured, etc.In an attempt to enhance the effect of the Subsidy policy, this researchproposes the following countermeasures to the foregoing problems:intensifying publicity of the Subsidy; distributing the Subsidy according to theactual growing area; raising the Subsidy rate; and flexibly innovating in theSubsidy methods, etc.