Research On Grain Financial Direct Subsidy Based On HeXie Management Theory

Great importance has always been attached to food security and farmers' income growth by the Party and governments in China. Subject to the declining grain planting area and grain yield and the expanding differences between urban and rural areas since the 1990s, a series of policies and measures including the "grain financial direct subsidy" policy were issued in 2004. As the focus and core of agricultural subsidies in China, the purposes of these policies were to boost grain production, to safeguard farmers' income, and to ensure food security. As the current world economy is recovering more slowly than expected, the economic outlook are full of uncertainties,and China is entering into a "new normal" economy with rapid urbanization and escalating grain production costs, several questions should be comprehensively discussed, carefully analyzed and summarized, so that the process, performance and direction of "grain financial direct subsidy" will be more scientific and reasonable and the internal and external environmental changes can be responded to more quickly and effectively. These questions include (1) what is the performance of the "grain growth" and "farmers' income growth" during the 10 years since the "grain financial direct subsidy" policy was implemented, (2) which is the core task of subsidy policies,grain growth or income growth, and (3) what is the policy trend of subsidies in the future.This study is based on HeXie management theory because it can effectively solve organization and social management problems in fast changing and complex environments. Employing content analysis, econometric model analysis, evolutionary game analysis and nonlinear dynamics, this study investigates the issues related to HeXie theme, He principles, Xie principles, HeXie coupling, HeXie theme drift of the"grain financial direct subsidy" policy. It analyzes whether the "grain financial direct subsidy" policy solves the central problem under the fast changing and complex environment, what the core task is, and whether the working focus should be adjusted.In addition, the weaknesses of the policy are discovered for improvement and the future policy development direction is predicted. The results of this study are shown as follows.(1) There is deficiency in the "actually implemented HeXie theme" of the"grain financial direct subsidy" in the period between 2004-2012, so the "drift"shall be sped up to get rid of the non-HeXie status. It is recognized by major events of grain yearbooks that the "actually implemented HeXie theme" of the "grain financial direct subsidy" is "grain growth first, farmers' income growth the primary",while the "desired HeXie theme" based on the EOL model is that the "grain growth and farmers' income growth should develop simultaneously". The results show that the two themes are different. It can be seen from the implementation effect of "grain financial direct subsidy" that the performance of grain growth was better than that of farmers' income growth,which indicates that the "actually implemented HeXie theme" of the "grain financial direct subsidy" fails to solve the issue of "farmers'income growth",so it shall be "drifted" as soon as possible.(2) In terms of grain growing, the farmers' subjective initiative ("He principles") is highly relevant to the strength of "grain financial direct subsidy".In order to simulate the subjective initiative of farmers, the generalized grain time(including time spent on grain fields such as soil preparing, planting, weeding,fertilizing, spraying insecticide, irrigating and harvesting; preparation time such as purchasing chemical fertilizers, pesticides, seeds and agricultural machinery; and time spent to sell grains and to participate in agricultural technology training) contributed by farmers shall be maintained at a certain basic level,which helps to ensure food security. The evolutionary game results indicate that the evolution results and convergence time of farmers' behaviors are influenced by not only the initial proportion of farmers selecting the high time input strategy,but also the initial proportion of governments selecting the high subsidy strategy. The larger the initial proportion of governments selecting the high subsidy strategy is, the better the subsidy effect will be and the faster the subsidy policy will take effect. However, only paying attention to the generalized time input while ignoring the input of material and technology, farmers'income is not idealized. In addition,the mindless increase in funds (on the abuse of pesticide, fertilizer, etc.) will also exacerbate the inferior situation.(3) The policy mechanisms ("Xie principles") in the U.S.,EU,Korea and other developed countries and regions, which have their HeXie theme evolved from "grain growth" to "farmers' income growth" provide lessons and inspirations to China. Because their good grain production conditions can produce sufficient grain supply, U.S., EU and Korea all have their HeXie theme evolved from"grain growth" to "farmers' income growth". In contrast,with a large population but limited arable land,Japan always focuses on "grain growth",but also emphasizes to"farmers, income growth" and the play of grain versatility. The enlightenments of grain subsidy policy mechanism in such developed countries and regions include: the grain subsidy shall be intensified appropriately; the subsidy structure shall be optimized; the pricing support approaches shall be employed selectively; the general service support structure shall be optimized; the resource- and environment-friendly subsidy shall be improved; and the institutionalization development of subsidy policy shall be enhanced.(4) The "HeXie coupling" nonlinear dynamic simulation suggests that the grain financial direct subsidy will undergo the process of rising first and then declining steadily. The simulation also shows "steady production" and "farmers'income growth”. The "HeXie coupling" of "grain financial direct subsidy" is characterized by nonlinearity and complexity. We developed a nonlinear dynamic evolution model for the empirical analysis of evolution behaviors among grain financial direct subsidy, grain yield and farmers' grain income. It is found that: with the increase in time input, the grain financial direct subsidy exhibited the fastest increase at the beginning and then slowed down after passing the highest point, which not only generally conforms to the evolution in the developed countries, but also fits with the "new normal" economy in China; the grain yield grew continuously at first,and stabilized later; the farmers' grain income kept a steady growth rate.(5) In the next stage,the "HeXie theme" of the "grain financial direct subsidy" shall be drifted to "farmers' income growth first,steady production the primary",and "farmers' income growth” should be set as a type of national strategic innovation. It is indicated by the new changes in the subjective and objective motives of "HeXie theme drift" of "grain financial direct subsidy" since 2013 that the "drift" pressure has already been generated, and it will be drifted to"farmers' income growth first, steady production the primary" from the task "grain growth first,farmers' income growth the primary" from 2004 to 2012. The "drift" is primarily supported by innovative thinking at a national strategic level. On the one hand,although "food security" as the goal of the "grain financial direct subsidy" has become a national strategy,"food security" is often misunderstood as "the increase of grain production". By setting up a "warning mechanism of food security level", we can enhance the understanding of "food security strategy". We should make it clear that both grain shortage and surplus can adversely affect food security, and steady production is the desired "satisfactory solution" and the ideal "new normal". On the other hand,the fact that the "farmers' income growth" has not become the strategic goal of the "grain financial direct subsidy", let alone the national strategy, has limited the performance of the subsidy. By making it a national strategy,we can both enrich the content of the strategic goal of the "grain financial direct subsidy" and make income distribution more in favor of farmers. This will contribute to the success of the"food security strategy", increase the performance of the subsidy policy, and help to realize the WTO's vision.In the "No. 1 Document" by the Central in 2015, it is proposed that: "Farmers shall become rich before China is prosperous"; "the efficiency of the agricultural subsidy policy shall be improved"; "such policies as the grain direct subsidies, the subsidies for growing superior grain cultivators, the subsidies for purchasing agricultural machinery and tools,and the general subsidies for agricultural production supplies shall be continued"; and "new achievements have been made on the increase in farmers' income". Great importance has been attached to issues of "agriculture,rural areas and farmers" such as "farmers' income growth" and "grain financial direct subsidy" by the Party and governments in China. It is anticipated that the results of this study will provide a practical and forward-looking decision-making foundation for the optimization and improvement of "grain financial direct subsidy",thus achieving the harmonious development of "grain financial direct subsidy",promoting farmers' income growth, and ensuring food security.