Policy-Design Analysis On High-Quality Seed Subsidy Based On Incentive Compatibility

The gap of grain s"upply and demand was widening from1999to2003,and also the food stocks declined. At the same time,rural people’s income increased slower,especially the income obtained from agricultural.So our central government introduced a series of direct subsidie policy,including the high-quality seed subsidy,mobilizing the enthusiasm of farmers to grow food. Since2002,China’s first introduction of high-quality seed subsidy,the subsidy crop varieties expand with the amount and scope of subsidy.After seven years of practice and exploration,the current operational methods of seed subsidies has been gradually standardized and unified,forming a"providing seed discount" and the "cash subsidy"are two basic approaches.Through the research,We found that seed subsidies in line with stabilize food production requirements by increasing the scientific and technological content at this stage in China.but the way of it’s implementation make small effective in promoting the proliferation of seeds.the original intention of "Provide seed discout" was to stimulate a more direct and effective promotion of farmers’choice,but from the analysis of farmers’ seed-selection results,its stimulation was rather feeble. And the form of cash subsidies on seeds also didn’t obviously promote the farmers’choice,and it can not play a larger role in the effect of financial resources.In the proliferation process of our country,the improvement of species and traits must get the recognition of farmers in order to success.We further analysis the seed subsidy based on policies designed,the result of the game model of the main policy participation shows,that seed subsidy can achieve an effective balance if the relevant constraints established.But it could be argued from the aspects of amount of subsidies,and the object and methods of subsidies that these restrictions did not solve in policy design at the beginning.The realization of the cash subsidy must be based on the assumption that farmers themselves have the willingness and ability to select high quality seeds,"providing seed discount" for the process is conducted through a third party, if we can’t effectively control the funds or seed in this part, subsidie’s effects are also largely discount,make a negative impact to the normal market competition and the farmers. Exploring its roots based on policy design theory,we can know that measure the efficiency of public policy,a standard must be achieved first of all is incentive compatibility to the participants. the seed subsidy policies are lack of effective incentive to both farmers and policy operators,which eventually led to government intervention in economic inefficiency and loss of social welfare.A good system should allow the central government’s input to play a maximum role.the design before was clearly not reached such an effect. Whether the seed subsidy is desirable,the key is not how beautiful we think of it,it depends on the cost of implementating this policy can and should be taken by the community. From system design point of view,it has not yet scientific and reasonable way to achieve policy objectives, then in order to minimize the possibility of government failure, we should as possible as we can reform of existing policies from the source.