A Study On Trade Liberalization,Adjustment Costs And Farmers' Income

Raising farmers' income is the key point to solve the problem of agriculture,rural areas and farmers in our country,and it is also important for agricultural sustainable development.China's agricultural trade is growing rapidly in the recent ten years,and a substantial increase of import cause serious shrinkage of the production in land intensive product department.Farmers are both consumers and producers.Now the rapid growth of agricultural imports is gong to be a new normal situation,so we should not only pay attention to the farmers' consumption benefits,but also should study the income problem of agricultural labor force.Classical economics think factors are flow fully and no cost.But Agricultural production factors in reality cannot flow fully,so that they can not be reallocated to other sector with ease and no cost and have to face an adjustment cost,while the cost is borne by the owners of production factors.Farmers in developing countries is not only the owners of labor factors,but also the providers of capital elements and the operators of land factors,thus inevitably bear the losses caused by the adjustment costs.It has shown as unemployment and decline of farmers' income in other developing countries.So how will it affect the impact between the openness of agricultural trade and the farmers' income?Agricultural trade can adjust the domestic market,to ensure the effective supply of agricultural products,so as the function has become increasingly obvious,to explore the influence of the openness of agricultural trade to farmers'income and the degree of this influence affected by adjustment costs is of great significance.Based on this,this paper will study the the influence of the openness of agricultural trade to farmers' income in China by the new perspective-adjustment cost.Firstly,we define the concept of adjustment costs,agricultural trade and farmers' income,sort out the influence mechanism among them and overseas and domestic research,put forward the theoretical significance of this issue.Secondly we analyze the status of the openness of agricultural trade and farmers' income,and make the realistic foundation for further research.Then we uses 1993-2012 national sample data to study the applicability of"the smooth adjustment hypothesis" in our agricultural department and calculate the adjustment costs of different region and category.Through the above analysis,this paper uses the provincial panel data of 2003-2012 to study the relationship among the openness of agricultural trade,adjustment costs and farmers' income.Conclusion:(1)"the smooth adjustment hypothesis" has applicability for the department of agriculture in our country.(2)our country faced import dilated adjustment costs in the whole,but also exist regional differences and species differences.(3)the impact of agricultural trade openness on farmers' income is restricted by the adjustment costs,but regional influence is not balanced,the influence of eastern and central regions is significant,while western region is not.Lastly,according to the previous analysis,we bring forward the appropriate policy recommendations.