Working Paper: NBER ID: w13958
Authors: Jikun Huang; Yu Liu; Will Martin; Scott Rozelle
Abstract: Tariffs on agricultural products fell sharply in China both prior to, and as a consequence of, China's accession to the WTO. The paper examines the nature of agricultural trade reform in China since 1981, and finds that protection was quite strongly negative for most commodities, and particularly for exported goods, at the beginning of the reforms. Since then, the taxation of agriculture has declined sharply, with the abolition of production quotas and procurement pricing, and reductions in trade distortions for both imported and exported goods. Rural well-being has improved partly because of these reforms, and also because of strengthening of markets, public investment in infrastructure, research and development, health and education, and reductions in barriers to mobility of labor out of agriculture. Many challenges remain in improving rural incomes and reducing rural poverty.
Keywords: agricultural trade reform; rural prosperity; China; WTO; income growth
JEL Codes: F10; Q17; Q18
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Decline in agricultural tariffs (Q17) | Improvement of rural well-being (O18) |
| Abolition of production quotas (P22) | Improvement of rural well-being (O18) |
| Trade liberalization (F13) | Agricultural productivity (Q11) |
| Investments in agricultural technology (Q16) | Improvement of rural well-being (O18) |
| Deregulation of markets (G18) | Improvement of rural well-being (O18) |
| Public investments in infrastructure (H54) | Improvement of rural well-being (O18) |
| Public investments in health (H51) | Improvement of rural well-being (O18) |
| Public investments in education (H52) | Improvement of rural well-being (O18) |
| Integration of domestic markets with international prices (F15) | Better income for farmers (Q12) |
| Elimination of agricultural taxes (H29) | Increase in rural incomes (R19) |
| Introduction of direct subsidies (H23) | Increase in rural incomes (R19) |