The current China’s agricultural subsidy policies have played an important role in promoting agricultural development and farmers' income in China. However, China’s agricultural subsidy policies also caused some problems, such as the disharmony between agricultural subsidies and agricultural land circulation. This paper seeks to provide a logic foundation for understanding the mechanism and the impacts of agricultural subsidy policies on agricultural land circulation through a comprehensive literature review. Results show that the root of the disharmony lies in the deviation of the policy implementation practices,“who‘owns’ the land who benefits”, from the policy objectives, “who grows grains who benefits”. The wrong target subsidy beneficiary, with the income distribution effect causes a series of problems, including furtherly increasing the lock-in effect of man-land relationship, limiting the rural land circulation, and increasing the occurrences of land usage disputes. Therefore, future public policy design needs to consider the harmony and the coordination between agricultural subsidy policies and agricultural land circulation policies.