A Study On The Effect Of Subsidy Policy For Agriculture On Environment In China

Agricultural production, especially grain production, has been in a weak position inmany industries, and food security is the basis for the development, these two are why thevast majority of countries have developed a range of agricultural subsidies to supportagricultural development. Foreign policy of agricultural subsidies start early, that’s whyforeign policy on agricultural subsidies has been more extensive and in-depth. In China,the abolition of agricultural tax and the implementation of agricultural direct subsidies areless than10years, the study of domestic agricultural subsidies are mainly related toagricultural subsidies theory, economic effect, the estimates of agricultural supportlevel, institutional change, the assessment of policy effects and measurement ofefficiency. In the study of the assessment of policy effects and measurement of efficiency,domestic scholars generally concerned about the direct effect of agricultural subsidies.Because of the small subsidy scale and the limitations of data availability, further indirecteffects are less involved in domestic study.Based on the widely read of foreign literature, this article learn on the methods ofdomestic research of agricultural subsidy effect to discuss the environmental effect ofagricultural direct subsidy. This article select the amount of chemical fertilizers andpesticides usage as a measurement of environmental indicator, to examine the impact ofagricultural direct subsidy on the amount of chemical fertilizer and pesticide usage formost of the environmental studies are restricted by data. Based on the farmer’s inputsdecision model, this paper compared the changes of agricultural labor input andfertilizer-pesticide usage in following three cases: no-subsidies, price subsidies and directsubsidies. Based on survey of farmers in Dongcheng, Changsha, Hunan Province, theauthor analyzed deeply of the decision-making behavior of farmers in the agriculturalproduction process and then use Probit model to demonstrate the environmental effect of agricultural direct subsidy.The research results show that both agricultural direct subsidy and price subsidieswill increase labor inputs for the agricultural sector and the amount of chemical fertilizersand pesticides usage. When the wages of non-farm sector are greater than the sum of theprices of agricultural products and the level of subsidies, the increasing rate offertilizer-pesticide usage aroused by agriculture direct subsidy is less than price subsidies.Although the utility of increase the amount of fertilizer-pesticide usage is significant, butcompared with other factors that affect the amount of fertilizer-pesticide usage, theimpact of agricultural direct subsidy is relatively weak. Therefore, agricultural directsubsidy indeed have some negative impact on the environment, but this negative effectis not obvious in the case of agriculture direct subsidy accounts for a relatively smallproportion of the income of farmers.