The Impacts Of Sugar Support Policies On The Sugar Crop Production Of China

The development of food processing industry has stimulated China’s strong demand for sugar. However, the cost of sugar crop production increases fast and the difference between domestic, foreign sugar price is gradually widened, and the sugar import increases year by year, which make the border policies of sugar trade (mainly tariff quota system) basically failed. Certainly, the main reason of the rapid increase of sugar cost is that the cost of sugar crop (sugar cane and sugar beet) is rising fast. However, we need to recognize that the expansion of sugar import trade has great impact on the sugar industry sector of China, especially the enthusiasm of the farmers of sugar crop. China and sugar producing areas are exploring to improve the existing sugar support policies, in order to stabilize the sugar supply. We need to answer the question that if the existing sugar support policies can encourage the farmers of sugar crop? If the answer is’no’, what is the reform direction of China’s sugar support policies? So, the goal of this research is to understand the impact of the existing sugar support policies and to discuss the reform direction of sugar support policies.In this research, firstly we analyze the economic effects of different sugar support policies, in order to provide theoretical foundation for the empirical research; secondly, analyze the origin and evolution of sugar crop production; thirdly, establish the empirical models, and analyze the effects of sugar support policies from two aspects of the whole country and the main producing area of sugar crop; fourthly, the simulation analysis has been used to analyze the possible changes of different policy scenarios; final part is conclusions and policy suggestions.The conclusions of this research have been put forward. Firstly, the existing price support policies(like temporary purchase and storage policy) and low standard production subsidies are limited to improve the sugar crop production; secondly, reasonable price support policies can encourage the farmers of sugar crop; thirdly, the subsidies for production factors can promote the production of sugar crop; fourthly, the direct subsidy by linking up plays a important role of the sugar crop production; fifthly, the opportunity cost will influence the comparative income of sugar crop production, so it need to be considered when making the sugar support policies. The suggestions based on this research are as follows:first, gradually improve the price support policies; secondly, increase the production subsidies of sugar crop; thirdly, make some direct subsidy by linking up for sugar crop producers.