By Cheng Yu & Ye Xingqing, DRC

2016-12-12

It is an important part of supply-side structural reform system to establish a new-style agriculture-friendly policy based on non-price factor so as to increase quality, efficiency and competitiveness of agriculture.

First, developed countries have made major adjustments toward agricultural-friendly policy, with the proportion of subsidized price in total agricultural support decreasing from over 60% in 1980s to below 20% whereas the proportion of public service and non-productive support has increased remarkably including items relating to comprehensive risk management, the promotion of sustainable development capacity and general service like R&D and infrastructure development.

Second, some issues relating to the pilot practice of subsidized price to agro-products. 1. There remains dislocation of policy functions under multiple policy goals. 2. The incomplete implementation of policy measures has led to negative policy effects. 3. The inadequate basic data have restricted the targeted implementation of policies. 4. The set price target cannot be ensured in the market due to price inversion.

Third, some policy options are made as follows on further promoting reform of China’s agricultural-friendly policy. 1. The government needs to adjust and perfect the current price subsidy model. 2. The government needs to lead the transformation of agricultural development mode by agricultural payment policy. 3. The government needs to ensure farmers’ income and agricultural capacity by increasing the value of industrial chain. 4. The government needs to bolster the income-backed function through price subsidy policy to enhance agricultural capacity and reduce cost. 5. The government needs to bring into play the market-based organizations to reduce the cost relating to policy implementation. 6. The government needs to strengthen basic data construction.

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