Does the Agricultural Subsidy Policy Affect Chinese Grain Production?—Evidence from DID Model

Abstract

Agricultural development in China has commanded much attention in the new era. This paper uses the DID model to analysis the relationship between agricultural subsidy policy and grain planting structure in China from two perspectives of macro and micro. The novelty of this paper is that we have developed a theoretical model to estimate effect of agricultural subsidy policy on the grain planting structure and explore its path of action. The empirical results of this paper show that the agricultural subsidy policy mainly changes the input of grain production of farmers from the aspects of technology and cost, which greatly motivates the farmers to increase the land input in grain production, and its grain planting area and its proportion will both increase.