Abstract: Target price policy is one of China’s countermeasures in agricultural support and protection. How farmers perceive and response to the policy will be critical for evaluating the effects of the policy and for improving the policy.Based on grounded theory and relevant materials, this paper found that farmers’ enthusiasm in planting soybean has been boosted to a certain level. Meanwhile, several problems were resulted such as the downturn in soybean market. In thefuture, it is necessary to calculate the level of the target price precisely, and to solve the price transmission between home market and internationals markets. Besides, the policy needs to be implemented with a mix of breeding and technologypromotion, etc. Therefore it will avoid ‘bad money drives out good’, and fundamentally enhance the competitiveness of domestic soybean industry.