Analysis on the effect of comprehensive income subsidy on China’s total factor productivity of maize with the DEA-Tobit Two-Stage Method based on provincial panel data
(2.China Center for Western Development Capacity Research, Guizhou University)
(3.Academic Committee of the Development Research Center of the State Council of the People's Republic of China)
【Abstract】This paper further analyzed the effect of the comprehensive income subsidy for grain on maize TFP with the DEA-Tobit Two-Stage Method and on basis of the measurement of China’s maize TFP during 2004–2008. The study showed that during 2004–2008 China’s TFP rose to some extent because of technological progress; in terms of maize TFP, the western part of China had very significant rises, and the eastern part of China and the northeastern part of China had slow improvement; the comprehensive income subsidy had positive effects on the improvement of TFP, the per-capita educational years of rural laborers, and the rate of effective farmland irrigation also had positive effects; the annual average temperature and annual sunshine duration had negative effects, and the planting area of maize per worker and power of farmland agricultural machinery per mu had insignificant effects. From the perspective of implementing policies, the comprehensive income subsidy and grain production tended to be separated from each other. However, according to the actual effect, as an optional plan for subsidies it could still help to improve TFP of grain without distorting the market and losing efficiency.
【Keywords】 the comprehensive income subsidy; total factor productivity; the DEA-Tobit Two-Stage Method; maize;
(Translated by ZHANG guoqing)
. ① The direct subsidy in its narrow sense means support in the form of subsidies from government finance to agricultural operators according to certain conditions and standards, such as the comprehensive subsidy for agricultural materials, the subsidy for improved seeds, and the subsidy for purchasing agricultural machinery. The direct subsidy in its broad sense also includes support in the form of subsidies from government finance to the entire agricultural sector, and is not targeted to farmers and specific agricultural products, such as input and subsidies in the aspects of constructing agricultural infrastructure, promoting agricultural technology, and protecting agricultural resources and the environment. [^Back]
. ① Source of data for 2002 and 2008: Cheng Guoqiang (2011); and source of data for 2014: National Government Final Accounts (2014) as shown at http://yss.mof.gov.cn/2014czys/201507/t20150709_1269855.html [^Back]
. ② According to the Guidance Book of Decision of the Central Committee of the Communist Party of China on Several Major Issues on Promoting the Reform and Development of Rural Areas, China has established the primary system of agricultural subsidy policies with complementary functions, comprehensive subsidies and special subsidy combined, and categorized DSGF and CDSAPM as the subsidy policies for farmers’ incomes (hereinafter referred to as comprehensive income subsidies) to increase farmers’ income; it has categorized the subsidy for improved seeds and the subsidy for purchasing agricultural machinery as subsidy policies for producing agricultural products (or special subsidies for production) to promote agricultural production (see the editing group of this book, 2008). When policies are implemented, the subsidy for improved seeds paid by cash and CDSAPM can be treated as comprehensive income subsidies for sharing largely the same operational means and effects. In 2016, the Chinese government integrated DSGF, CDSAPM and the subsidy for purchasing agricultural machinery into subsidies for agricultural support and protection, which reflected similarity of the three subsidies. Therefore, comprehensive income subsidies elaborated by this paper include DSGF, CDSAPM and the subsidy for improved seeds of crops. [^Back]
. ① In October and December, 2008, the Chinese government started temporary storage of totally 30 million tons of maize in three batches in the three provinces of the northeastern part of China and Inner Mongolia Autonomous Region. [^Back]
. ① The Department of Price of National Development and Reform Commission of the People's Republic of China (eds.). National Agricultural Cost-benefit Data Assembly (over the years, 2005–2009) (全国农产品成本收益资料汇编(2005–2009年,历年)). Beijing: China Statistics Press. [^Back]
. ② National Bureau of Statistics (eds.). China Statistical Yearbook (over the years, 2005–2009) (中国统计年鉴(2005–2009年,历年)). Beijing: China Statistics Press. [^Back]
. ③ In 2014, the total yield of maize in 18 provinces (regions) was 205.39 million tons, accounting for 95.2% of the total yield of maize in China. [^Back]
. ① It was calculated according to data on technological progress during 2004–2008. [^Back]
. ① During the phase, the subsidy for maize per mu includes DSGF, CDSAPM and the subsidy for improved seeds, namely, the comprehensive income subsidy. [^Back]
. ② The rate of effective farmland irrigation is calculated according to the area of effective irrigation and the area of farmland; power of agricultural machinery per mu is calculated according to total power of agricultural machinery and the area of farmland; the planting area of maize per worker is estimated according to the planting area of maize and the number of agricultural employees. [^Back]
. ③ Department of Rural Surveys, National Bureau of Statistics of China (eds.). China Rural Statistical Yearbook(2005–2009, over the years) (中国农村统计年鉴,2005–2009年,历年). Beijing: China Statistics Press. [^Back]
. ④ Editorial Department of China Meteorological Yearbook (eds.). China Meteorological Yearbook (over the years, 2005–2009) (中国气象年鉴, 2005–2009, 历年). Beijing: China Meteorological Press. [^Back]
. ① For example, Heilongjiang, Jilin, Inner Mongolia Autonomous Region, Henan and other provinces (regions) provide subsidies according to the area of taxed land or the taxed normal yield and some provinces (regions) such as Hubei and Hebei provide subsidies according to the actual planting area. [^Back]
. ① Sources of data for 2006 and 2008: CHENG Guoqiang (2011); data for 2014 are calculated according to National Government Final Accounts (2014) at the website of the Ministry of Finance of the People's Republic of China, namely, http://yss.mof.gov.cn/2014czys/201507/t20150709_1269855.html. [^Back]
. ② When joining the WTO, China promised that Amber Box support to non-special agricultural products was no more than 8.5% of the total value of agricultural output; support to special agricultural products was no more than 8.5% of the value of output of the product. Now, China’s soybeans, seeds of rape and so on have been facing constraints of the ceiling of the Amber Box of special agricultural products. [^Back]
. ③ In 2008, China reported DSGF to WTO as a Green Box policy. [^Back]
. ④ At the areas conducting the pilot reform, according to the Suggestions on Adjusting and Improving the Policy of Three Kinds of Agricultural Subsidies promulgated by the Ministry of Finance of the People's Republic of China, DSGF, the subsidy for improved seeds and 80% of CDSAPM are paid by cash to farmers for protecting farmland capability according to the contractual area they have, but the farmers receiving the subsidy should promise not to desert the land and reduce the soil capability (as a Green Box policy); 20% of the CDSAPM, the subsidy for large grain-growing households and Incremental capital of three kinds of subsidies are used to support capacity of grain and promote appropriate-scale operation, including credit guarantees, the subsidy for credit interest and moderate subsidies in the form of cash to entities planting grain above the designed scale (as an Amber Box policy). [^Back]
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