The Effects Of Rural Food Price On China's Rural Poverty

Food is the daily necessity, its demand price elasticity is relatively small, thus food price has the important effect on poverty. In the world market, many food's price have increased fast and have continually the rising pressure since 2005 and the poverty has been puzzles during the development process of various countries, specially the majority of poverty people live in the rural. Based on Vector Auto-Regression (VAR) model, this paper firstly applies the method of pulse response function and variance decomposition to test the dynamic correlations between rural food price and rural poverty. The results show that there exists a long-term relationship between the price of food in country. From the view of the results of pulse response function and variance decomposition, in the short run, rural food price contribute more significantly to rural poverty in China, but in the long run, rural food price is not helpful and even do harm to the rural poverty.This paper using rural datas of 20 provinces involving 592 counties that country relieves their poverty specially in China during 2002-2007 analyzes the relationship of the rural food price and the rural poverty, and further using threshold panel model with the ratio of the operating income of the rural residents to the total income and the ratio of the food expenses to the consumption expenditure respectively as thresholds observes the different effects of the rural retail price of food and the rural consumer prices of food to the rural poverty. The resulting shows:the effect of the rural price of food to rural poverty is very important; The effect of the rural retail price of food to rural poverty shows "the over U " shape curve with the increasing the ratio of the operating income of the rural residents. The effect of the rural consumer prices of food to the rural poverty shows the significant interval effect with the increasing ratio of the food expenses to the consumption expenditure, but it throughout remains detrimental to the rural poverty.At last, this article gives some conclusions and some proposals.