1.College of Economics and Management,China Agricultural University;2.Chinese Academy of International Trade and Economic Cooperation,MOFCOM
Major Program of National Social Science Foundation of China (18ZDA074)
In 2016, the agricultural subsidy framework for corn production in China underwent a pivotal transformation. This transition entailed a shift from the antecedent temporally-oriented policy of inventory control to a novel regime oriented towards producer subsidies. In comparison to its precursor, the temporal control policy, the efficacy and ramifications of this producer-oriented corn subsidy policy necessitate a deeper analytical exploration, drawing upon extant research as a foundation. Based on the economics theory of firms and applying the Difference-in-Differences (DID) model, this research seeks to empirically analyze the granular repercussions of producer subsidies upon corn producers and to examine the nuanced disparities across provinces and the temporal dynamics from the perspective of corn producers. Results show that: 1) Producer subsidies played a significant role in promoting corn production in policy implementation areas, ensuring the stability of regional corn production; 2) From the perspective of "dynamic effects" of time, the influence of producer subsidies on corn production gradually increased; and 3) There were heterogeneity of the impacts of producer subsidies among different provinces: particularly, in Heilongjiang Province, a preeminent corn-production hub, comparing with the former temporal control policy, the influence of producer subsidy on corn yield was relatively low because producer subsidy could not compensate the loss of corn producers from price drop. In summary, this paper provides the following suggestions: continuing the refinement of the corn producer subsidy framework, necessitating the coordination between the producer subsidy policy and other price support policies to reduce producer’s price loss, and paying attention to the changes in the impacts of the producer subsidy policy over time for future adjustment.