A Study On Grain Trade Openness And Farmers' Income In China

With the deepening of agricultural trade openness,the net grain import has been the New Normal of agricultural products trade in China.On one hand,increasing food imports has a serious impact on the farmers' income in the major grain-producing areas.On the other hand,the temporary storage of grain purchase price is rather on the low side and the local food price is far lower than that in the international market.The policy of direct subsidies can not offset the rising cost of production,which leads to the farmers' income declined.In this contest,to balance the domestic market with the international market is helpful to improve the farmers' income and reduce fiscal costs.Therefore,exploring the relationship between the grain trade openness and the farmers ' income is of great significance to ensure food safety and to promote farmers to enter into a well-off society.In order to study the effects of grain trade openness on farmers' income further,this paper selects four main grain categories,categories that are wheat,corn,soybean and rice,as the representative.There exist three key questions.First,to measure the trade openness degree of wheat,corn,soybean and rice.Second,to explore the relationship between trade openness of the four categories and the farmers,income in the major grain-producing areas.Third,in order to highlight the representation and effectiveness of this paper,we make a further study on the impact of soybean and corn trade openness to the income in their main producing areas.Firstly,we use a new indicator comprised by their trade dependence and their share of the world trade to measure the wheat,corn,soybean.rice openness.Secondly,Based on the Cobb Douglas production function to establish an empirical analysis of the relationship between trade openness and farmers' income,we make an empirical study on the effect of grain trade openness on farmers' income in the major grain-producing areas by using 13 provincial and time-series panel data from 2002-2013.Thirdly,we make another empirical analysis to study further on the effect of soybean and corn trade openness to farmers' income in their main producing areas by using 4 High Oil Soybean production provinces and 11 corn production provinces.Lastly,based on the theoretical and empirical analysis,countermeasures and suggestions about grain trade are made from the perspective of grain trade,the rural capital investment and the technical level in order to improve the income and the welfare of the farmers.According to the full test and the empirical results,we can draw the following conclusions:First,as a net importer of grain,the four main grain categories are under-valued to certain extend.Among them,the soybean trade openness is far more undervalued than the other three grain categories.Second,the results of the empirical test show that the trade openness,the rural material capital per capita,the rural education level and technical level of agricultural production have different extent promoting effects on the farmers' income among which the soybean trade openness has a bigger promotion effects than the wheat,corn and rice as far as the trade openness is concerned.Third,comparing to the major grain-producing areas,the trade openness has a greater impact on farmers' income in the soybean and corn main producing areas.At the same time,the other variables increase the income on different levels.