An Empirical Study On Effect Of Agricultural Trade Liberalization On Income Of Farmers From Fujian Province

Since opening to outside,our country had taken policies and measures about agricultural products, meanwhile the free trade of agricultural products had been expanding; Throughout the history, the process of reform and open could be divided into five stages: searching(1978～1987)、entirely pushing(1988～1990)、assaulting(1991～1993)、continuing to deepen(1994～2001)、further deepening after joining in the WTO(2001 to now).With continually further reforming and opening, the degree of trade openness was kept enhancing, the pace of the free trade of agricultural products was continuously advanced,this directly led to the improvement of farmers’income and diversity of income structure. Because of the location of Fujian province which stands by the sea, it naturally becomes the windows of the trade, while flowers、fruits and seafood were mainly the export products,in addition, for that the speed of the signing of AFTA agreement in 2002 and progress of the trade between Taiwan and Fujian was more fast, this would certainly have a great effect on farmers’income and polices about agricultural products. Accordingly, the research on the effect of the free trade of agricultural products in our country on the farmers’income in Fujian province not only has theoretical significance, but also has certain realistic significance. Firstly, based on a series of theoretical analysis and results of previous studies, this article come out with initial theory on income of farmers under impact of agricultural trade liberalization of domestic and abroad; After joined WTO, market pattern of agricultural commodities had changed, less competitive domestic products faced challenges from abroad, market price had declined and still not easy to sale out, However export volume of competitive domestic products had increased, meanwhile market prices went higher and higher, the ratio between the price of agricultural commodities and export volume changed.Under the new market price structure system,part of the farmers’ benefit declined, but meanwhile another part of farmers may tend to get more benefits. However, we are sure agricultural trade liberalization will stimulate farmers’income Secondly, in order to get more comprehensive analysis on relationship between farmers’income and products trade,,this article will refer foreign trade dependence (FTD) to generate impact of farmers’ income according to import and export of agricultural commodities.This article will follow the traditional FTD method, which use the proportion of import and export volume in GDP, to calculated FTD of agricultural commodities for the next 15 years Thirdly,we establish the OLS equation of the trade openness and farmers’income to discuss whether trade openness has the effect on farmers’income; Because the instability of time series would easily lead to improper regression, besides OLS regression can only explain the relation of variables, can not explain the long relation and causality. Therefore, we finally test on the data’s flat,then adopt ADF and Granger causality test to discuss the relation for further research we put farmers’ income of Fujian province into three level standards, and discuss the effect from free trade of agricultural products on the farmers which has different income. For the further research on the effect, we divide the income of the primary industry into four different kinds, such as plant income、forestry income、animal husbandry income and fishery income, and select the income data of 15 years,adopt Grey relational analysis method to discuss which kind in primary industry income has the most effect on farmers’ income. Lastly, we put forward some suggestions about how to improve farmers’ income of Fujian province and make the policies.