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The purpose of this paper is to investigate the implications of the China’s rising meat demand and industrialization of the livestock sector for the vegetable oil market.

An equilibrium displacement model is constructed to analyze the interactions between meat consumption and vegetable oil market through the development of livestock sector modernization. Parameters derived from the 2006 to 2009 data are first used to produce the counterfactual growth rate of the non-soybean vegetable oil to validate the model. Then the authors use the second set of parameters derived from the 2010 to 2013 data to forecast the changes in the vegetable oil market in China.

Soybean oil, as a co-product of soybean processing, tends to crowd out other vegetable oils. In particular, the authors find that the market for non-soybean vegetable oils may shrink as long as the rapid industrialization pace above 10 percent within China’s livestock sector continues. Although their production takes up only 8.5 percent of all agricultural lands in China, oil crops remain as important cash crops for farmers contributing over 10 percent to the overall farm income in some provinces. The authors’ analysis suggests that stakeholders in these regions should closely monitor the structural changes within the livestock sector and consider the information for crop selection.

The authors’ analysis contributes to the literature on China’s meat demand by highlighting its implications for other agricultural markets involved in the food system.

The purpose of this study is to investigate the impacts of surface ozone pollution on rice profit, output and variable inputs in China.

This study estimates the rice profit function using county-level rice production data and ozone monitoring data in 2014 and 2015 to capture the impact of ozone pollution on rice profit. Then, it uses dual approach to identify the impacts of ozone on the supply of rice and the demand for variable inputs. The ozone concentration data are obtained from 1,412 monitoring stations established by the National Environmental Monitoring Centre of China.

The results show that surface ozone would significantly reduce rice profits; a 1% increase in (the daily average ozone concentration from 9 am to 4 pm) leads to a 0.1% decrease in profits. In addition, ozone has a negative impact on the levels of inputs and the supply of rice, and the elasticities of rice output, fertilizer input and labour input with respect to are −0.87, −0.86 and −0.78%, respectively. These results suggest that ozone pollution affects rice production via two channels: the direct damage on rice growth and the indirect negative impact of reducing variable inputs.

This study estimates the impacts of surface ozone pollution on rice profit and output, and quantifies its influence on variable inputs in China, which provides a better understanding of farmers' adaptation behaviour.

The purpose of this paper is to examine the grain production implications of alternative designs for China’s grain subsidy policy. In particular, the authors examine three subsidy designs including area-based subsidy, quantity-based subsidy and production-cost-based subsidy.

To carry out the analysis, the authors develop a Chinese agricultural sector model (CASM) and an econometric, policy action–farmer response summary model. The CASM is used under a wide variety of subsidy level and basis experiments to generate pseudo data on farmer reactions to subsidies. Then a summary function model was estimated over those pseudo data that quantitatively summarized modeled farmer responses to different grain subsidy schemes. In turn, the summary functions were used to optimize the subsidy level such that it maximized grain production both within and across the area-based, quantity-based and cost-based subsidies. Regional implications were also developed.

The authors found that the production-quantity-based subsidy is the most cost-effective in stimulating grain production among the subsidy schemes. The authors also argue that scheme complies with WTO regulations regarding product-specific support. The authors found that the areas where grain production was most affected were the traditional grain-producing regions.

To the authors’ knowledge the authors have not seen a study of the Chinese grain subsidy program context that examined the effects of alternative subsidy schemes, nor one that developed estimates of the optimal subsidy level. In addition, the methodology is unique employing bottom-up, regionally disaggregated, sector modeling coupled with an aggregate pseudo data based summary function approach providing a new, original approach for analyzing agricultural policy design.

This study investigates the effect of education on crop insurance knowledge within the context of noncompliance experiences. In addition, the study delves into the role of government endorsement in education, which is instructive for the implementation of future insurance promotions.

The study designs a randomized controlled trial (RCT) conducted in Jiangsu Province, China. A total of 518 sample farmers were randomly assigned to two experiments: The Education Experiment and the government’s Endorsement Experiment, respectively. After conducting a set of rigorous exogeneity tests, econometric analysis was conducted using baseline survey data and post experiment data.

Our results revealed that insurance education served as an effective tool in improving farmers’ insurance knowledge, especially their understanding of insurance mechanisms. However, this effect can be mitigated by the noncompliant insurance experience of farmers. Moreover, government-endorsed education proved to be more efficient in improving farmers’ insurance knowledge, thus highlighting the significance of building trust between insureds and insurers.

This study contributes to the literature by demonstrating that using a simple education tool, such as, brochures, can effectively improve farmers insurance knowledge. In addition, insurance mechanisms are now more urgently in need of universalization than policy information. Furthermore, by conducting the RCT, this study obtains unbiased causal inference on the effect of education on insurance knowledge and underscores the role of government endorsement in this process. In addition, the study illustrates the tradeoff between insurers’ efforts in enhancing education and regulating noncompliant insurance misconducts, which compromises education efforts. Overall, this study provides insights into the marketing strategies of insurers and government propaganda aimed at stimulating farmers’ incentives to purchase insurance.

This paper aims to investigate the changes in living standard among families with different socio-economic status in China with the use of Engel's Coefficient. The authors develop a decomposition methodology to figure out the driving forces behind changes in Engel's Coefficient, and investigate how dramatic economic growth, volatile food price and rapid nutrition transition affect living standard among different families.

The authors propose a statistical method to decompose the changes in living standard measured by Engel's Coefficient into structure effect, price effect, quantity effect and income effect. Using the China Health and Nutrition Survey data between 2000 and 2011, the authors estimate these four effects by employing a decomposition method.

Results show that Engel's Coefficient in China decreased by 8.7 percentage points (hereafter “pp”) during 2000–2011, where structure effect leads to 0.2 pp increase, price effect results in 17.7 pp increase, quantity effect brings about 12.4 pp decline and income effect contributes to 14.2 pp decline. Results indicate that rising food prices are the main obstacle to improve households' living standard. Typically, poor and rural families' living standard is more vulnerable to the rise in food prices, and they benefit less from income growth.

This study proposes a decomposition method to investigate the determinants of change in Engel's Coefficient, which provides a deeper understanding of how economic growth, food price change and nutrition transition affect people's living standard in different socio-economic groups in developing countries. This study also provides valuable insights on how to achieve common prosperity from the perspective of consumption upgrading.

The purpose of this paper is to investigate Chinese farmers’ adaptation behavior in the context of the rising cost of labor in agriculture. As the cost of labor increases, farmers will either reallocate their budget to different inputs or change the structure of agricultural production to maximize profit.

The Rural Fixed Point Observation data set between 2004 and 2010 is employed in the empirical analysis of this study. Both the compensated and uncompensated demand elasticities with respect to wages are estimated by adopting the translog cost function and the profit function.

The results show that labor input will drop down significantly as a response to rising wages. Land, fertilizer and intermediate inputs are net complements of labor, whereas machinery appears to be net substitute for labor. In addition, the authors also separate the expansion effect from the substitution effect and find that farmers will shift to grain production with intensive use of fertilizer and from wheat and corn to rice as a response to the rising cost of labor.

This study adopts the classical household model to incorporate various adaptation behaviors of farmers into one framework and decomposes the total effect of the rising cost of labor on input demand into an expansion effect and a substitution effect, which provides a better understanding of farmers’ adaptation behavior.

The purpose of this paper is to examine the multiplier effects of the grain subsidy program in China, which is a large food self-sufficiency project that is implemented as a cash transfer program. Income multiplier effects have not been empirically examined in the evaluation of the grain subsidy program although increasing the income of farmers is the original goal of this project.

A large number of household-level observations are employed to measure the program’s income multiplier. An unrestricted model was first employed to measure the multipliers in a period of two years, and the difference was evaluated. Then, the income promotion effects of grain subsidy on various income sources for each specific subset of the population, such as liquidity conditions and household characteristics, were estimated.

The results show that the grain subsidy program has a high income multiplier, and the income promotion effect of the transferred subsidies is from agricultural production derived by intensifying input for each unit of land. The multiplier effect of the grain subsidy program as a cash transfer program can be interpreted as the shadow value of relaxing liquidity constraints and could be particularly utilized by households with more farming land and farmers in less developed regions in China. Hence, to maximize the income multiplier effect, the grain subsidy distribution method should consider these criteria instead of retaining the prevalent standard that is based on contracted land areas.

This study addresses the gap that the effect of China’s grain subsidy program on income increment has not been empirically examined in nation wide.

The purpose of this paper is to investigate the determinants and impacts of outsourcing pest and disease management on rice production in China.

A multinomial endogenous treatment effects model which accounts for selection bias was used.

The results show that outsourcing decisions are driven mainly by the size of the farm, the age of the household head and other household characteristics. Further, the authors find that outsourcing labor for pest and disease control has no significant effect on pest control cost and rice yields, though it reduces the number of pesticide applications. Conversely, outsourcing of professional services can increase rice yields by 4.1 percent, and at the same time it increases pest and disease control costs by 50.6 percent. However, it is found that outsourcing of professional services exerts no significant impact on the farm profitability.

This study suggests that households with large farm size are more likely to outsource professional services and, therefore, service providers and governments should target those farmers to provide incentives and create greater awareness of the benefits from the outsourcing of professional services. Moreover, the increase in yields along with the government subsidy justifies the outsourcing of professional services by farmers. However, service providers and policy makers have a lot of leeway to come up with cheaper methods for pest and disease management in rice production.

This study is the first attempt to simultaneously evaluate the determinants and impacts of outsourcing pest and disease management on rice production in China.