Grain Direct Subsidy Policy And Farmers’ Decision-Making Behavior

Food production is an important source of income to the farmers and the food industry is the foundation and pillar of agricultural development. China has a huge base of1.3billion people and to ensure food production continued growing and achieving national food security, is directly related to China’s economic modernization and stability of society as a whole. The Central Government has fully implemented the direct grain subsidy policy in2004, and gradually hasi ncreased the subsidy support, aims to increasing farmers’ income and improving food production. In recent years, the transfer of rural labor and rural land circulation is accelerating and the number of China’s large grain is increasing. A number of large grain production households have emerged in Anhui Province. Large grain production households are an important subject of grain supply main, they have played a positive role in promoting China’s future agricultural development in accelerating the transfer of rural land, cracking grain seeds production low income level, improving the conditions for food production and ensuring food security. Grain direct subsidy system has been deeply improved, but their grain production and operation characteristics of are different to small-scale farmers’. The effect of the implementation of the original grain direct subsidy policy could be biased. The original policy framework system needs to re-adjust and to make the incentive effects of subsidies working better.We use148large grain production household samples and analyzed the performance of the direct grain subsidy policy. We have tried to find out the decision-making behavior of next period of the large grain production households through the use of binary Logistic model and multivariate linear model. And the content and conclusions of this research are as follows:(1) By analyzing the effects of planting grain, we found that the direct grain subsidy policy wasn’t play a significant role in increasing food production or farmers’ income. Subsidy would be transformed into land rental prices if large grain production household got the subsidy.The performance of the grain direct subsidy is not obvious.(2) Through empirical analysis of agriculture-related subsidies to the decision-making behavior of large grain production households, we found that the direct grain subsidy had no significant impact on the farming expansion behavior.But the land transfer subsidy policy plays a significant effect. The land transfer subsidy can effectively reduce the costs of food production, speed up technological advances in agriculture, improve conditions for agricultural production, grain production capacity, and thus stimulate the enthusiasm of the large grain production households.(3) The "indirect land transfer subsidy"by"reducing cost type of earth" is better than the "direct grain subsidy "by "increasing income type of the peasant" for farmers to fully protect the interests of food production. Subsidize the actual grain farmers could avoid the serious problem of generalized subsidies object and reduce the capital losses when the subusidies are direct contacted with person and the cost of carrying out the policy. Only in this way, can subsidy policy give full play to its positive incentive effects.Throughout thousands years of China’s rural financial history, it can be attributed to the word "afford" and "take". Word which aims at "human", would have been associated with "difficult","dangerous","defeaf".Word which begins at targeting "land", would have been more with "easy","pass","smooth".And the main conclusion of this paperis:Change the traditional subsidies in contact with people and make the idea of "reducing the costs instead of subsidying the incomes " become true. So we could change the traditional method of compensation "subsidy the peasanf" and achieve a way to "subsidy the earth".The main policy suggestions of this paper are:(1) Implement direct subsidy policy to farmers of different scales and improve the mechanism of direct subsidy for grain;(2) Design a progressive subsidy policy and implement land transfer subsidy policy;(3) Building land transferring mechanism and improve the circulation service platform.