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Distortions to Agricultural Incentives in China

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The purpose of this paper is to present estimations of indicators of direct and indirect interventions of China's government in agriculture. In order to put these indicators in context, the paper reviews China's experience with policy reforms since the 1950s and the measures the effects of these reforms on the agriculture sector. Unfortunately, due to data constraints, we can only produce quantitative measures of distortions since the early 1980s, that is for the past 25 years. Due to the nature of China's agricultural experience over the last six decades, this review emphasizes the sectoral and macroeconomic policies and elements of the institutional framework that have influenced the incentive framework facing the sector and factor markets. The tradeand price/marketing-policy-related changes in incentives for different products are reflected in estimated rates of government assistance (Nominal Rates of Assistance, NRAs, Direct Rates of Assistances, DRAs and consumer subsidies).

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