The Reform Of Grain Circulation System Under An Angel Of Food Security

The thesis holds an opinion that food security is public goods provided by thegovernment, just as national defense. The legitimacy of the rule will be damage if thegovernment can't guarantee the food security within its territory. Food security isconsisted of the following three dimensions: supply, circulation, and demand. Amature food security system should guarantee from those three aspects.The author reviewed the three reforms of grain circulation system from 1978 to 1999,and found a paradox in the reform. It is described as following. At first, thegovernment raises the procurement price. Then the government can't afford too muchsubsidies for the surplus grains and have to change the current food circulation system.However, that change causes fluctuation in grain market and finally the governmenthas to raise the procurement price again.The thesis points out that, the target of the reform of grain circulation system shouldbe to guarantee the food security because the government is the provider of publicgoods, while this target is constrained by the fiscal expenditure. Those three reformswere carried out with the trade-off between food security and the fiscal pressure. Thethesis analyzes empirically how the fluctuation in the grain market and fiscalexpenditure pressure influenced the decision-making of grain circulation systemreform. Besides that, the thesis also analyzes the policy measures taken by thegovernment and the author concludes that the policy measures in grain circulationreforms are price policy, marketization and demarketization, agriculture sectorrestructuring.The thesis put the analysis of the grain circulation reforms under the background ofthe evolution of China's food security system. The author claims that that evolution isconsisted of three phases: 1949 to 1952, 1953 to 1978 and 1979 to present. Before theHousehold Responsibility System reform in 1978, the government controlled thefarmers' production and grain circulation directly by the collective team system andthe state monopoly for purchase and marketing of grain system to guarantee thenational food security. After 1978, the government did not control the productiondirectly, while it indirectly influenced the farmers' production decision by graincirculation system to guarantee the food security. Actually the reforms of graincirculation system were the adjustment of food security system. The government wastrying to learn how to guarantee the food security through experiments. As a result ofthat, there emerged series of phenomena of one step backward and two steps forward.Finally, the thesis evaluates the current food security system in China and providespolicy advice on the latest grain circulation system reform since 2004 from foodsecurity perspective.