Fertilizer industry subsidies in China: who are the beneficiaries?. Issue 3 (19th August 2014)

• Record Type: Journal Article
• Authors: Li, Sheng; Zhang, Yaoqi; Nadolnyak, Denis; Wesley, John David; Zhang, Yeifei
• Editors: Xin, Xian; Xin, Xian
• Is Part Of: China agricultural economic review. Volume 6:Issue 3(2014)
• Publication Date: 2014-08-19
• Subjects: Agriculture -- Economic aspects -- China -- Periodicals; Rural development -- China -- Periodicals; Agriculture and state -- China -- Periodicals; 338.10951
• DOI: 10.1108/CAER-12-2012-0134
• Languages: English
• ISSNs: 1756-137X

Abstract

Abstract : Purpose: Since 2004, subsidies increased by 670% in the Chinese fertilizer industry to reduce the farmer's burden. The purpose of this study is to assess whether subsidies benefit the target groups, the fertilizer subsidy distribution pattern and benefit allocation pattern among fertilizer producers and other sectors were investigated. Design/methodology/approach: The Muth model is extended to evaluate the impacts of a subsidy on multi-stage markets. Findings: It is found that the total benefits from the policy are about RMB 7.7 billion yuans. The fertilizer suppliers gain about RMB 51 billion yuans from the favorable policy with mean subsidy incidence 0.8 and capturing about 70% of total surplus. Originality/value: This study firstly use the Equilibrium Displacement model to quantity the distribution of fertilizer subsidy in a vertical market in China.