The Effectiveness Assessment of Agricultural Subsidy Policies on Food Security: Evidence from China's Poverty-Stricken Villages.

Abstract

This paper builds a theoretical model based on a representative peasant household in the neoclassical model, comprehensively considers three types of farmer households in China, and evaluates the effects of the agricultural subsidy policy under equilibrium conditions. Based on the two bottom lines of guaranteeing China's grain security and ensuring no large-scale return to poverty, this paper uses 2010, 2012, and 2014 tracking survey data from the Mutual Aid Fund for Poverty-Stricken Villages in China to construct an econometric model to evaluate agricultural subsidy effectiveness from the three aspects of farmers' total sown area, total grain output, and total income. The research draws the following conclusions: (1) Agricultural subsidies can significantly increase the sown area, grain production, and total income of farmers in poverty-stricken areas, which is conducive to improving the farmers' comprehensive capacity for grain production as well as income, and this conclusion remains valid after performing a series of robustness tests and solving endogeneity problems. (2) The effects of the agricultural subsidy policy are affected by natural conditions, economic development levels, and functional orientation of grain production in different regions, and they have divergent influences on farmers' total sown area, total output, and total income. (3) Agricultural subsidies boost farmers' willingness to cultivate grain, reduce land abandonment, and increase the total sown area, total output, and total grain income. The willingness to cultivate grain is an important mechanism that affects the effectiveness of the agricultural subsidy policy.