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Title: Understanding China's grain procurement policy from a perspective of optimization
Authors: Shea, Y. P. Esther
Subjects: China
Grain procurement policy
Political preference function
Sectoral income distribution
Food security
Issue Date: Dec-2010
Publisher: Elsevier
Source: China economic review, Dec. 2010, v. 21, no. 4, p. 639-649.
Abstract: This paper develops an optimization model to analyze the policy formulation under China's dual-track grain procurement system. By capturing the redistribution objective and the urban food security objective in a political preference function, we provide some rigorous explanations of three important aspects of China's grain policies: the choice of the dual-track procurement system over the lump-sum tax scheme as a means of extracting economic surpluses from the grain sector; the suppression of the procurement price to its minimum until the mid-1990s; and the switch from taxing to subsidizing grain production at end-1996. Our findings underscore the paramount importance of the urban food security objective behind the evolution of China's grain procurement policy, including the liberalization of the system in the 2000s.
Rights: China Economic Review © 2010 Elsevier. The journal web site is located at
Type: Journal/Magazine Article
DOI: 10.1016/j.chieco.2010.07.002
ISSN: 1043-951X
Appears in Collections:AF Journal/Magazine Articles

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