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Research On The Effect Of Dairy Imports On The Development Of Domestic Dairy Sector Of China

Posted on:2019-10-09Degree:DoctorType:Dissertation
Country:ChinaCandidate:Y J WeiFull Text:PDF
GTID:1369330602968683Subject:International Trade
Abstract/Summary:PDF Full Text Request
Dairy industry,well known as grain-saving,economical and effective industry all over the world,plays an important role in the coordination among primary industry,secondary industry and tertiary industry.It is regarded as one of landmarks for agricultural modernization and contributes a lot to the increase of farmers' inciome,the improvement of agricultural structure,food safety,and security of nutrition and health.Since China became a member of WTO,dairy tariffs have decreased substantially and some Free Trade Zones have been opened.As a result,dairy imports have been increasing rapidly these years,among which most were whey and milk powder,accounting for more than 70%.Meanwhile,the imports of some other dairy products such as liquid milk,yogurt,eheese,butter and condensed milk have also been increasing more rapidly in recent years even though the amounts were still smaller compared with the imports of milk powder and whey.It's shown in the "The Agricultural Outlook of China" that dairy imports of China will continue to increase in the long run.It is estimated that the equal number of raw milk imports will reach 16.03 million tons,with 59.25%more than 2016.It's believed that China,as a net diary importer,will surely continue to import more dairy products.As a result,the rapid increasing dairy imports caused some concerns and worries that dairy imports may have negative effects on the development of domestic dairy processing sector and eow fanning seetor who are the key suppliers for dairy products and raw milk respectively of the dairy industry chain.Some worried that the increasing dairy imports caused survival crisis for dairy processing enterprises and cow farming sector,resulting running loss.There is also a popular explanation for the phenomenon that "many Chinese farmers slaughter cows and dump the milk".A conclusion was drawn that the domestic dairy cow farming sector is substantially affected by dairy imports.However,is it true?What inferred above may not be completely true with following facts not taken into consideration.In recent years,both dairy farming sector and dairy processing sector have improved a lot in all.Firstly,the whole output value of dairy industry reached 236.11 billion yuan in 2011 from 19.54 billion yuan in 2000.Secondly,significant improvements have taken place to dairy processing sector,with the growth of dairy products output,total assets from 18.6 billion yuan to 256.5 billion yuan,sales from 19.3 billion to 332.85 billion yuan from 2000 to 2015.In 2016,Yili and Mengniu ranked 8th and 11th all over the world.Thirdly,cow farming sector has also improved a lot,with the number of dairy cow stocks increasing from 5.66 to 15.07 million,raw milk production increasing from 10.26 to 37.55 million tons,and cow yield increasing from 2786 to 6000 kg/headjyear,1.7,2.7,1.2 times growth from 2001-2015.Fourthly,structural scale of cow farming sector has changed with 53%scaling dairy farms in 2016.Even though the phenomenon "many Chinese farmers slaughter cows and dump the milk,existed,there are still some large profitable farms shown from the statistics of Ministry of Agriculture of China.Besides,the quality of milk has also been better,which even reached the international advanced level.The facts and analysis above indicate that the inference that dairy imports do harm to China' dairy industry substantially may not be rational.It's necessary to study empirically about the real effect of dairy imports on the development of domestic dairy farming sectors and operating performance of dairy processing enterprises.Theory of Industrial Organization believes that mark-up is one of the most important indicators to indicate the operating performance.Theory of Endogenous Growth holds the point that to improve the productivity is the key for sustainable development of industry.New Trade Theory has analyzed the effect of trade liberalization on the operating performance which has shown that imports may cause reduction of mark-up through competition effect while contribute to the growth of productivity through both competition effect and learning-by-doing.New-new Trade Theory developed further based on firm level data.On the one hand,the imports of intermediate and inputs had positive effect on the productivity of firms through "horizontal effect" and "vertical effect" with more varieties increase and higher quality.On the other hand,more imports competition made firms mark-up down,while some others found that there was a positive effect on the mark-up from intermediate and inputs imports.Besides,Heterogeneity Theory further concluded that the effects of imports differ by productivity of importers.The effects of imports may be negative if the firms develop behind with low productivity,while it would promote the firms to improve productivity if they survive during the heavy competition.According to the China Dairy Report from USDA,powder and whey imported were mainly served as processing material for domestic dairy processing firms,while liquid milk,yogurt,cheese,butter imported could replace domestic dairy products and would be on sale directly.With lower price but higher quality,powder and whey imported may contribute to the improvement of firm,s operating performance.The other dairy imports would lead to heavier market competition,with positive effect on the TFP of firms but negative effect on the mark-up.Finally,dairy products imported would also lead raw milk market to severer,which may bring different effects on raw milk suppliers with differing scale.Then,what accurate impact do the dairy imports have on the operating performance of domestic dairy processing firms?What effects do the dairy imports have on TFP and mark-up respectively?As to the different kinds of dairy imports,is there any difference among the effects?What's the difference among the effects of dairy imports on raw milk suppliers with differing scales?Based on the above theories,this study will answer these questions through empirical analysis,so that the whole situation of dairy imports and domestic dairy industry could be made clear.Then suggestions for the adjustment about dairy trade policy and the improvement of China's dairy industry development to make China turn from large dairy country to strong dairy country could be proposed.Specifically,the main contents and conclusions are summarized as follows:Part1:The whole situation of China,s dairy imports and dairy industryAnalyze whole situation of dairy imports through statistical analysis on the quantitative characteristics of the amount,the product structure,imported sources of dairy imports of China.Through the same method,analyze the cow farming sector and dairy processing sector.Make an introduction of the background for the research on the whole.Part 2:Analysis Framework for the influence of dairy imports on domestic dairy industryBegin with the inferences that "dairy imports do harm to domestic dairy industry",then analyze the influencing mechanism that dairy imports affect dairy processing firms and cow farmers.1)TFP and mark-up are the two main indicators to indicate dairy firms operating performance.In theory,dairy imports may have positive effects on TFP,while negative effects on mark-up of diary firms.Powder and whey imported which are served as processing material mainly,may contribute to both TFP and mark-up.Liquid milk,yogurt,butter,cheese,which replace some of the domestic dairy products,may affect TFP positively while have negative effect on mark-up.2)The increase of dairy imports means that they will finally cause a severer eompetition market.As a result,dairy imports may have different kinds of effects on the cow farmers with differing scale.Part 3:Analysis on the effect of dairy imports on the operating performance of dairy processing firms:from the perspective of TFPWith dairy processing enterprise data collected from China,s industrial enterprise database matching custom database,the TFP was evaluated through O-P and L-P methods.Then analyze the effects of dairy imports and different kinds of dairy imports on the TFP of dairy firms,and results are shown:1)Dairy imports eontribute to the growth of TFP;2)There are significant positive effects from powder and whey imported on the TFP,while the effects from other dairy imports on the TFP were not significant.Part 4:Analysis on the effect of dairy imports on the operating performance of dairy processing firms:from the perspective of mark-upBased on the research method of De Loecker and Warzynski(2012),mark-up of dairy enterprises was evaluated.Then analyze the effects of dairy imports and the specific kinds of dairy imports on the mark-up of dairy enterprises.The results are as follows:1)Overall,dairy imports have positive effects on the improvement of mark-up.2)Specifically,the positive effects of powder imported on mark.up of dairy enterprise are significant.3)While the effects of whey imported are not significant.4)Other dairy imports have no significant effects on mark-up of dairy enterprise.Part 5:Analysis on the effects of dairy imports on cow farmer with differing scale:from the perspective of efficiencyBased on the measurement of efficiency of cow farming with different scale sizes through SFA,study empirically the impact of dairy imports on technical efficiency of cow farming with different scale sizes through technological gap model.The results show that:1)There is a positive effect of dairy imports to promote the integration of domestic cow farming sector on the whole.2)Specifically,there is a negative effect of dairy imports on the technical efficiency of scattered small farmers.3)While dairy imports have a positive effect on the technical efficiency of small scale,middle scale and large scale operations,of which the positive effect on small operations is the largest,on middle scale ones is larger,and on large scale ones the effect is a little.Part 6:Analysis on the effects of dairy imports on cow farmer with differing scale:from the perspective offarming modeWith indicator of the proportion of farms number accounting for the whole to indicating market share of cow farmers of differing scales,analyze the impact of dairy imports on the market share of different cow farmers.The results were concluded:1)The increase of dairy imports contribute to the scaling and intensification of cow farming sector in general.2)Dairy imports lead to reduction of market share of scattered small farmers which accelerate the exit from cow farming,whose scale were less than 100 heads,especially less than 20 heads.3)Dairy imports promoted the expand of market share of dairy farmers of larger scale whose scale were more than 100 head,particularly scale more than 200 heads.
Keywords/Search Tags:Dairy Imports, TFP, Mark-up, Farming Mode, Efficiency
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