A Study Of Issues Relating To Policy Of Agricultural Subsidy

Grain industry is a basic industry in national economic development and the importance of grain, a life necessity, is beyond doubt. With the deepening of the reform and opening wider to the outside world, China has made remarkable achievements in economic development. In 2010, China’s GDP was $5.8786 trillion, and China became the world’s second largest economy. The rapid economic growth in recent years has stimulated consumption demand for primary products and created some opportunities for non-agricultural employments; in the meantime the ever increasing contradictions between population increase & decrease in arable land and of urban-rural dualistic economic structure also brings wide discrepancies in income and services (mainly in education and health care) between rural and urban residents.In 2001, China officially entered WTO. According to the commitment for WTO entry, China will open up agricultural field for foreign capital. Challenged by complicated international economic situations, uncertainty of food supply and demand, and pressure of competition of international trade market, China should, starting with intrinsic factors and institutional factors, strengthen its government support, increase grain subsidy to peasants so that the win-win of increases in peasant incomes and grain production can be achieved.As an effective policy instrument for increases in peasant incomes and grain production, grain subsidy policy has gained great importance from all governments. However, the methods and extent of grain subsidy of different nations vary greatly due to differences in natural resources and national conditions. Study of grain subsidy policy of different countries, in particular of developed countries may serve as reference for China to develop its own subsidy policy..This paper is written for this purpose. This paper gets its theoretical basis through reviewing the existing theories, and then analyzes the existing grain subsidy policies and finally gives suggestions on policies answering to China’s development based on the study and analysis of the development trend and current situations of grain subsidy policies abroad. This paper covers the following:ChapterⅠis Introduction. This section is divided into three parts. Firstly, it presents the background and meaning of the study; secondly, it defines Agricultural Subsidies, Agricultural Support, Agricultural Protection, and reviews both domestic and foreign studies relating to grain subsidy policies to get the theoretic basis of this paper. Finally, it clarifies the train of thought and structure of the paper.ChapterⅡsummarizes the evolution of grain subsidies policy. It mainly expounds the development course of China’s subsidies policy after 1949 and conducts necessary analysis of the evolution of the subsidies.ChapterⅢintroduces present grain subsidies policy. The grain subsidies policy is divided in to income subsidies and production subsidies in time sequence. And then the paper expounds and analyzes their reform course, contents of policies, and implementation effect.ChapterⅣintroduces subsidies policy abroad. It reviews the development course of subsidies policies in US, EU and Japan, analyzes their present policies, and evaluates their implementation effect.ChapterⅤis conclusion and suggestions on policy. Based on the foregoing analysis and research, it offers suggestions from the following four aspects, i.e. "improvement of China’s agricultural subsidies system", "strengthening macro control to promote law-governed agriculture", "intensifying grain subsidies", and "improvement of ecological environment through agricultural subsidies.