Establishment of Grain Farmers' Supply Response Model and Empirical Analysis under Minimum Grain Purchase Price Policy

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Zhang, Shuang (2012)
  • Subject: The purchasing market price of grain, Minimum purchase price policy, Farmers, Supply response, Agribusiness,

Based on farmers' supply behavior theory and price expectations theory, this paper establishes grain farmers' supply response model of two major grain varieties (early indica rice and mixed wheat) in the major producing areas, to test whether the minimum grain purchase price policy can have price-oriented effect on grain production and supply in the major producing areas. Empirical analysis shows that the minimum purchase price published annually by the government has significant positive impact on farmers' grain supply in the major grain producing areas. In recent years, China steadily raises the level of minimum grain purchase price, which has played an important role in effectively protecting grain farmers' interests, mobilizing the enthusiasm of farmers' grain production, and ensuring the market supply of key grain varieties.
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