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Reforming China's Agriculture-Friendly Policy in Light of International Experience(No. 140, 2016)

2016-11-21

By Cheng Yu & Ye Xingqing, Research Department of Rural Economy, DRC

Research Report No. 140, 2016 (Total 5023) 2016-10-25

Abstract: The developed countries have made major adjustments to their agricultural-friendly policies, focusing on minimizing price support and giving agriculture support without distorting production and trade performance. The new policy support has put more emphasis on farmers' income, risk management, external environment and innovation. China's current agriculture-friendly policy with price support at its core has resulted in the problems of “high prices, high inventory and high import volume”. The cotton and soybean target-oriented price subsidies, subsidies to corn producers and other reform measures implemented since 2014 have revealed a number of issues such as overlapping policy objectives, incorporate coordination between different policies and ineffective targeted policy results. The major part of agricultural supply side structural reform is to enable agricultural performance to walk out from the predicament resulting from the minimum purchase price and temporary storage policies as soon as possible, and improve agricultural quality, efficiency and competitiveness. Based on the relevant reform practice over the past two years and in light of the experience of developed countries, we should establish a new agriculture-friendly policy system featured by non-price-based support as soon as possible.

Key words: agricultural-friendly policy, price support of agricultural products, international comparison