Agricultural Support Policies Research Articles

How the Soybean Producer Subsidy Policy affects crop planting structure: evidence from Chinese county-level data

PurposeThe Soybean Producer Subsidy Policy (SPSP), an agricultural support policy enacted in China within the past few years, is designed to optimise crop planting structure. This study analyses the impact of SPSP on the crop planting structure in terms of absolute and comparative incomes and elucidates the mechanisms involved.Design/methodology/approachUtilising balanced county-level panel data from 966 counties in China’s major soybean-producing regions, spanning from 2008 to 2021, we investigate the impacts of SPSP on crop planting structure by applying a difference-in-difference (DID) model.FindingsThe findings reveal several crucial insights. First, SPSP optimises the crop planting structure in Northeast China, primarily through an expansion in the area sown to soybeans and a simultaneous reduction in the area sown to maize. Second, the impacts of SPSP gradually strengthen over time but begin to weaken by 2021. Third, heterogeneity analysis indicates that the effects of SPSP are most pronounced in Eastern Inner Mongolia, followed by Heilongjiang, Jilin, and Liaoning. Finally, SPSP incentivises farmers to expand soybean sown areas by improving absolute rather than comparative incomes from soybean cultivation.Practical implicationsAddressing structural contradictions within China’s food supply chain necessitates the adjustment of support policies for different crops to mitigate market distortions. Establishing a holistic agricultural support system encompassing various crops could promote sustainable agricultural practices in the future.Originality/valueOur findings are valuable for policy makers in China and globally who aim to establish support systems for regional linkages that include a variety of crops.

Can Agricultural Support and Protection Subsidy Policies Promote High-Quality Development of Grain Industry? A Case Study of China

The issue of grain quality has attracted increasing attention with the gradual growth and stabilization of grain output. We take the successive agricultural support and protection subsidy policies introduced in 2015 as a quasi-natural experiment and use a multi-period double-difference model to analyze a panel of data from 298 prefecture-level cities in China from 2007 to 2020. Our findings confirm that implementing agricultural support protection subsidy policies has had initial success regarding grain output growth and quality improvement at the point of contradiction. This success is also due to its scale and technology effects, which can ensure that grain output and quality have achieved growth. The level of agricultural machinery also plays a crucial positive role in the impact of the subsidy policy on food production and food security. Further heterogeneity analysis shows that the impacts of agricultural support and protection subsidy policies on food quality and yield security differ significantly across different geographic regions, food crop production, and pollutant type levels. Therefore, the positive impact of subsidy policies on the food industry should be better promoted to enhance the sustainability and competitiveness of agriculture.

Exploring the "Double-Edged Sword" effect of the digital economy on sustainable agricultural development: Evidence from China

The prolonged reliance on excessive resource utilization and unsustainable production methods has resulted in significant environmental issues in China, posing serious challenges to the sustainable development of agriculture. While the digital economy offers new opportunities for enhancing agricultural sustainability, its rapid and unregulated growth could also lead to negative effects. Therefore, exploring the relationship between the digital economy and sustainable agriculture development (SAD), along with clarifying the mechanisms involved, is of paramount importance. This study uses the EBM-GML index to calculate AGTFP as a representation of SAD and empirically tests the impact and mechanism of the digital economy on SAD. Additionally, it explores the moderating role of government behavior, specifically Agricultural fiscal support and digital policies. The main findings are as follows: (1) During the observation period, SAD showed a steady upward trend, but regional disparities widened, forming a contiguous agglomeration pattern. The decentralization of the digital economy weakened, trending towards unipolarization and homogenization, with a north-to-south diffusion. (2) The impact of the digital economy on SAD presents an inverted "U" shape, indicating a "double-edged sword" effect. This relationship remains significant after robustness and endogeneity tests. Additionally, the digital economy exhibits significant spatial effects, maintaining an inverted U-shaped relationship with SAD in neighboring areas. (3) Regional heterogeneity shows that coastal provinces are in digital economy suppression or alert areas, while inland regions are in enhancement areas. During the study period, the number of suppression and alert areas did not significantly increase, but there was a trend of shifting from coastal to inland regions. (4) When below the threshold, the digital economy promotes agricultural green technology innovation, optimizes resource allocation, and fosters synergetic agglomeration of agriculture with the secondary and tertiary industries, enhancing SAD. However, surpassing the threshold negatively impacts these mechanisms. (5) Fiscal support for agriculture smooths the inverted "U" curve, mitigating the negative impact of excessive digital economy growth on SAD. Conversely, digital policies steepen the inverted "U" curve, exacerbating these negative effects. The findings highlight the need for balanced digital economic development to support sustainable agricultural growth.

Agricultural policy and crop location: Long‐run output and spatial climate risk consequences

AbstractChoices by farmers—notably what crop to grow, where—are not only influenced by spatially sensitive environmental attributes but also economic factors that respond to changes in government policies. In South Africa, the policy stance toward agriculture swung toward an extended period of support spanning the middle of the 20th century. Subsequently, the agricultural support policies were eliminated in the post‐Apartheid period beginning in the 1990s. Using a purpose‐built, spatially explicit data set for South African agriculture spanning the period 1918–2015, we show these structural shifts in agricultural policy regimes concord with major shifts in national corn price trends and variability, and the area planted to corn (accounting for half the country's cropped area). More subtly, and much less studied, we reveal that these switching policy regimes also aligned with changes in the location of crop production, with pronounced consequences for crop output and climate risk. At its peak, policy‐aligned crop movement in South Africa reduced corn output by between 7.9% and 15.3%, and placed production in areas with reduced and riskier rainfall patterns. Upon removal of the policy distortions, the decline in total corn area continued, and the crop largely reverted to its predistorted, less climate‐risky geographical locations. The geographical sensitivities of the agricultural policy–production–climate risk nexus we reveal suggest these locational aspects deserve more concerted analytical and policy design attention, especially in light of the longer run, spatially sensitive production and food security risk implications of the changing climate realities facing agriculture the world over.

Perceived legitimacy of agricultural support schemes: An investigation using factorial survey experiments

Abstract Agricultural support payments are a significant position in public budgets, and the legitimacy of such payments is subject to continuing debate. The legitimacy rests on the social acceptance of citizens for support payments to farmers, which is the focus of this study. Social acceptance is investigated using evaluations of farm and farmer descriptions in a factorial survey experiment. The results reveal higher acceptance of payments for farms demonstrating enhanced animal welfare, biodiversity, and a lower carbon footprint. The acceptance of support payments is negatively associated with payment amount, but payments to farmers who are financially struggling are more accepted than payments to profitable farmers; indicating respondent preferences that align with the need justice principle. Study findings can be used to inform priorities for legitimate policies of agricultural support schemes, to identify areas of consensus or disagreement regarding social acceptance of support, and to facilitate effective communication on agricultural support policy.

Exploring the drivers of agricultural wages growth in China: A comprehensive framework utilizing input-output and structural decomposition methods.

This study explores the factors driving agricultural wages growth in China from 1981 to 2020. We propose a comprehensive framework that combines input-output analysis and structural decomposition analysis to investigate the drivers of agricultural wages growth from four perspectives: supply, demand, industrial linkages, and agricultural support policies. The findings indicate that changes in consumer demand, investment demand, and labor mobility play significant roles in driving the growth of agricultural wages in China. Additionally, agricultural support policies have contributed to an increase in agricultural wages to some extent. However, changes in industrial linkages negatively affect agricultural wages growth. A notable strength of this study lies in the methodology employed, which ensures a comprehensive and systematic analysis encompassing diverse factors rather than a restricted perspective.

Empirical Analysis of the Effectiveness of Fiscal Agricultural Support Policies Based on Spatial Econometric Methods

Empirical Analysis of the Effectiveness of Fiscal Agricultural Support Policies Based on Spatial Econometric Methods

Repurposing agricultural support policies for shared prosperity in rural Fiji

AbstractNotwithstanding the increasing place of tourism exports, the rural sector and its agricultural production remain important contributors to Fijiʼs economy. But their contribution is compromised by policies and institutions that distort the farm sectorʼs resource use, with too many resources employed by sugar and livestock producers at the expense of other farmers and producers of non‐farm products. Subsidies to the sugar industry could be used instead to boost investment in rural public goods such as infrastructure and agricultural research. That would benefit a much larger proportion of rural people, many of whom are below the poverty line. So too would a lowering of tariffs on imports of meat and milk products. And by thereby lowering food prices in urban areas, such re‐purposing of support would benefit their poorest households most. It would also lower the prices of high‐protein livestock products and nutrient‐rich fruits and vegetables, which could well improve nutrition and health.

Agricultural support policies and GHG emissions from agriculture in Latin America: relationships and policy implications for climate change

Domestic support policies for farmers and agriculture, through their price effect, have been deemed potentially environmentally harmful; for example, in developing countries, agricultural prices have been set- below the world market prices, aiming to secure low retail prices for urban consumers. This practice has lowered producer prices, and thereby prevented farmers from adopting ecofriendly production techniques. This study uses policy data —market price support (MPS) and general service support estimates (GSSE) as shares of total support estimate (TSE)— and greenhouse gases (GHG) data for main crops and livestock sectors in 18 Latin-American countries and it applies cluster analysis to construct a typology that highlights patterns between policy incentives for agricultural crops and activities and GHG emissions. The results suggest that an increase in the TSE and/or MPS comprising a large share of the TSE leads to an increase in GHGs. Conversely, GHGs fall when GSSE comprise a larger share of the TSE.

Will common agricultural policy support save farm employment in the wine sector?

ABSTRACT The aim of this paper is to analyze whether different types of Common Agricultural Policy (CAP) subsidies maintained jobs or even created them on wine farms during the years 2013–2019 using a Hungarian Farm Accountancy Data Network panel dataset. Farm employment is separated into paid and unpaid labor. The initial decline in farm employment during the first three years of analysis was due to the decline in paid labor, but later there was rather stable development in both paid and unpaid labor. The dynamic panel regression results confirm that the employment in the previous year is the crucial driver for the employment of labor on wine farms. CAP subsidies for direct payments to farmers and, to a lesser extent, economic farm size, are positively associated with the employment of paid labor (and thus the employment of total wine farms-related labor), but not with employment of unpaid labor, and vice versa rented land share. These results and findings are robust independent of year-fixed effects. While CAP subsidies for direct payments to farmers supported the maintenance or increase in paid labor employment on wine farms, trade-offs arose regarding the efficiency of wine farms and their entrepreneurial-, innovation-, and market-added value-chain efforts.

A Study on the Professionalization of Young Part-Time Farmers Based on Two-Way Push–Pull Model

A growing number of young Chinese farmers are abandoning agriculture. This research aimed to identify ways to stimulate enthusiasm among young people for choosing careers in agriculture and to promote the professionalization of young part-time farmers. This study surveyed 310 young part-time farmers in Chongqing City and Tianjin City. We constructed the Two-Way Push–Pull (TWPP) model to assess the willingness of young part-time farmers to work professionally in agriculture. The results show that agricultural policy support, hometown attachment, agricultural income, and agricultural industrialization significantly influence young part-time farmers’ willingness to pursue professional farming careers. However, risks of farming, children’s education, urban housing, and non-farm income negatively impact their willingness. The government must strengthen policy support’s influence on their willingness to motivate young part-time farmers to become professional farmers. This could include reducing farming risks, advancing agricultural industrialization, improving farmers’ professional status and reputation, and increasing the quality of rural public services.

The Relative Importance of Global Agricultural Subsidies and Tariffs, Revisited

AbstractOver the past three decades, tariff protection to farmers has fallen and partly been replaced by domestic support, whilst support for farmers in some emerging economies has grown. Against that backdrop, this paper provides new estimates of national economic impacts of global agricultural tariffs and domestic supports. Using the latest global economy-wide GTAP (Global Trade Analysis Project) model calibrated to 2017, we simulate (a) the removal of food and agricultural domestic supports and agri-food tariffs and (b) the removal also of tariffs on imports of non-agricultural goods. We find that agricultural support policies are still an important part of the global welfare cost of all goods’ trade-restrictive policies (albeit only half as costly as in 2001), and tariffs still dominate the global welfare cost of all farm-support programs. That farm support could be re-instrumented to relieve natural resource and environmental stresses, boost food and nutrition security, and alleviate poverty and income inequality.

A flexible and efficient hybrid agricultural subsidy design for promoting food security and safety

The quantity and quality of edible agricultural products are critical for food security (quantity) and safety (quality). Supplying consumers with enough safe food is the key responsibility of food production firms. Still, this aim is not always guaranteed because of input capacity constraints and other limitations in the agricultural sector. A hybrid subsidy, a mix of quantity and quality subsidy, could help achieve food security and safety in a country its flexibility. However, the advantages of the hybrid have not been fully investigated. Thus, this paper designs a hybrid subsidy for edible agricultural products by considering cost uncertainties and input resource constraints. All conclusions are obtained by theoretical mathematical analysis. (1) equilibrium solutions under different conditions—cost uncertainties and input constraints—are obtained, and comparative analyses is offered. (2) the results show that the hybrid subsidy is convenient in the trade-off between food quantity and quality, which means a hybrid subsidy policy design is flexible and efficient for food security and safety. (3) cost uncertainties and input resource constraints have significant impacts on the efficiency of the hybrid subsidy. Findings show that the hybrid subsidy is ideal for supporting edible agricultural products. Additionally, we argue that cost uncertainties and input constraints should be considered when making policy efficiency evaluations. This study has a novel contribution to agricultural support policy design.

The impacts of reforming agricultural policy support on cereal prices: a CGE modeling approach

PurposeThis paper investigates the effects of the total abolition of all forms of agricultural subsidies to producers and border tariffs on the prices of staple cereals.Design/methodology/approachThe authors use the GTAP global economy-wide model and focus on 27 countries and 8 regions. The GTAP database that is used contains information on budgetary transfers to producers and market price support such as domestic price support, tariffs, export subsidies, quotas on exports or imports and other border measures.FindingsThe removal of subsidies is estimated to significantly increase the prices of wheat and other cereal grains in Japan, paddy rice in Malaysia and Indonesia, processed rice in Malaysia and Indonesia and wheat in Brazil and India. When border tariffs are removed, cereal prices are projected to fall in several countries, but the decline is more pronounced for wheat in Kenya and Japan, other cereal grains in South Korea and all staples in Nepal.Research limitations/implicationsThe alternative scenarios on the removal of agricultural subsidies in all agricultural sectors and the elimination of border tariffs are purely speculative as the analysis ignores important political economy considerations of agricultural and food policy reforms.Practical implicationsThe findings from this study point to the importance of implementing additional policy measures to mitigate the possible negative effect of repurposing the support to agriculture and ensure the food security and welfare of those categories of buyers who heavily depend on the price of staple food for their livelihoods.Social implicationsThis study’s findings confirm that the elimination of agricultural subsidies would impact global food security directly by making staple food less affordable to the poorest and indirectly by decreasing the available household budget for other presumably more nutritious food groups. Consequently, it is expected that these price increases could make segments of the world population poorer, particularly the net-food buyers due to a decline in their real income.Originality/valueThe authors assess the impact of removing the subsidies on the economy in a comprehensive way, particularly given the recent policy focus on net zero emissions and Sustainable Development Goals that include healthy foods. The authors also consider the counter effects of tariff reduction on this, which is price-reducing.

Optimum Support Policy Component for the Development of Agricultural Production: Potato Producer

The present study aimed to determine the optimum policy component in an example of potato cultivation development based on the principle of the efficient use of scarce resources and maximizing the benefit of the producer. Agricultural support policies are commonly implemented by adopting a top-down approach. Regarding benefit maximization at the target group level, policies for agricultural products should be determined with a bottom-up approach. In this manner, in the present study, potato producers were determined to be the target group. Therefore, this study investigated the policy component that provides the highest benefit in line with the demands, expectations, and tendencies of the target group. The micro-data obtained from the potato-growing enterprises operating in provinces where potato cultivation was intensively carried out within the scope of Turkey constituted the research data. A face-to-face survey technique was used as the method for collecting the producer data. Simple descriptive statistics and one of the multivariate analysis techniques, conjoint analysis, were applied in the analysis and evaluation of the data. The optimum policy component setup was determined to be “Price and Payment Support: Above Market Price and 2 months term, Support Area and Amount: to production, 25.47 USD/da (23.04 EUR/da), time of announcement for the supports: pre-planting, and producer’s declaration: I do (I declare)” for the potato product. Accordingly, the necessity of a bottom-up approach in the planning and implementation of an agricultural support policy in Turkey is explained based on the results obtained. Therefore, it is considered necessary and beneficial to measure the level of producer benefits on the focus of applications that encourage potato production.

Agricultural Support and Public Policies Improving Sustainability in Brazil’s Beef Industry

Since the dawn of Brazilian trade, extensive cattle farming has predominated. Brazil’s extensive pasture-based system uses pasture plants adapted to climate and soil conditions with limited use of purchased inputs. However, new technologies such as integrated crop and livestock systems have recently been adopted, with government support and public policies that are intended to encourage increased agricultural production in Brazil. Domestic and international stakeholders have prioritized sustainable agricultural development in Brazil’s beef sector to reduce deforestation and other natural-habitat conversions. This review provides an overview of beef production in Brazil, focusing particularly on (1) historical factors that have encouraged an extensive, low-intensity style of production and (2) how national public policies supporting agriculture have improved sustainability in Brazil’s beef industry. Since the beginning of the twenty-first century, specific public policies for rural areas began to implement changes that addressed environmental concerns. Programs aimed at protecting secondary forests and increasing their areas are needed to offset the 42% of Brazil’s greenhouse gas emissions that come from land-use change. To produce more beef with less environmental impact, cattle ranchers need to use their land more productively. Thus, public policy initiatives need to combat deforestation and preserve the environment and local communities, while sustainably intensifying Brazil’s beef production.

Post-assessment in policy-based strategic environmental assessment: Taking China's agricultural support and protection subsidy policy as an example

As the top-level component of the environmental impact assessment (EIA) system, policy-based strategic environmental assessment (SEA) plays an important role in avoiding the negative environmental impacts of policy implementation. However, the development of policy-based SEA in China is relatively slow due to institutional and technical difficulties. In fact, the effective inclusion of policy-based SEA in the early stage of policy decision-making will continue to face major and long-term practical resistance in the future, such that conducting policy-based SEA on a large-scale will be difficult. Therefore, this study proposes a chain-type post-assessment framework suitable for assessing the environmental impact of policies under implementation from the perspective of policy life cycle assessment to promote policy-based SEA to cover more policies. This framework includes five parts, namely, policy analysis, impact identification, impact analysis, cause exploration, and policy recommendations. This framework follows a typical model with environmental impact analysis as the core and incorporates the concept of system optimization. Following this framework, this study conducts an EIA of China's agricultural support and protection subsidy policy (ASPSP). The study finds that the framework demonstrated good applicability in the post-assessment of policies under implementation. In the future, to promote the establishment and development of policy-based SEA in China, work should be conducted from the following aspects: promotion of the policy EIA into law, establishment of an assessment framework throughout the policy life cycle, and strengthening the research on methods. Through case studies, this study finds that China's ASPSP, which is beneficial to the environment in terms of policy design, lacks a prominent positive impact on the eco-environment and even has a negative impact. This is related not only to unreasonable policy design but also to deviation from policy implementation under the joint action of policy implementers, policy object, and the policy implementation environment. In the future, while continuing to optimize and adjust policies, work should be conducted in terms of optimizing the policy implementation environment, improving policy implementation methods, and strengthening the foundation of policy implementation to improve policy effectiveness.

Evaluation of Turkey s Agricultural Support Policies in Terms of World Trends

The agricultural sector seems to be overshadowed by the services sector in the globalizing world, but it still maintains its importance. Because agricultural products will continue to meet the basic needs of countries in the future as they do today. The most important problem faced by the sector, which is so important, is that it is overly affected by climatic conditions and the low income of the farmers operating in this field. Because of these features, agriculture has been a sector supported by various tools. The aim of this study is to reveal the evaluation of Turkey's agricultural support policies in terms of world trends implemented the world and to make necessary inferences by evaluating Turkey's agricultural support policies in terms of world trends in this context. For this purpose, agricultural support policy trends of the EU and USA were examined in this study. The main material of this study consisted of previous studies on the subject and material obtained from the web pages of the relevant institutes. The study was carried out as a compilation of studies containing analyzes and thoughts about the current situation and future of agricultural support policy trends in line with the determined purpose. Of the observed countries, only the United States has a positive CSE, that meaning its consumers are not taxed. On the other hand, Turkey recorded the highest negative CSE values in the observed period, which means that Turkish consumers are taxed the most.

The Effect of Agricultural Support Policies on Economic Development and Growth

Agricultural support policies form the basis of sustainable development plans to ensure economic sustainability within the framework of global development goals. In the analysis, the total production of 10 agricultural products (cotton, sunflower, soybean, wheat, corn, rye, oat, paddy, and safflower), which are important in terms of agricultural production in Turkey, was used for the years between 1980 and 2020. Analyzes were performed using the EViews-9 package program. The intervention analysis method was used in the study. First, the appropriate ARIMA model was determined, and then a dummy variable was added to the model for 2006, the year the support applications started, and the said effects were revealed. According to the analysis results, agricultural support policy and price difference payment support, which is one of the agricultural support instruments, has a positive effect of approximately 47% on the total agricultural production in the selected products group.

Environmental sustainability in agriculture: Identification of bottlenecks

Increasing the environmental sustainability of the agriculture sector is an important policy goal for many governments. This study employs Necessary Condition Analysis (NCA) to identify potential necessary conditions (bottlenecks) and to assess their required levels for achieving strong and weak environmental sustainability outcomes in agriculture. Based on data from selected OECD countries, the results show that there are several necessary conditions, including both structural and policy conditions, for achieving high environmental sustainability. More specifically, the results show that low production intensity and low livestock density and cropland share are necessary conditions for high environmental sustainability. These, in turn, are affected by past and present production-coupled agricultural support policies (especially market price support and output payments) that constrain the achievement of high environmental sustainability. It is therefore important to reduce the levels of these support measures to enable higher environmental sustainability in agriculture.