Agriculture Reference
In-Depth Information
Consumer gans
Consumer gans from ncreased mports can be approxmately calculated
from the dfference n gran prces before and after the ncrease n mports
times the market consumption of grain after the shock, as follows
1,815 x 6 per cent x 215 x (1 + 9.6 per cent - 6.8 per cent) = 24.1 (billion yuan)
where 9.6 per cent s the rato of mported gran to domestc gran before
the import shock, and 6.8 per cent is the ratio of output reduction to the
market grain before the shock. Again, the farmers' consumer gain from the
prce changes s excluded for the reason mentoned earler.
The 24.1 bllon yuan of consumer surplus s equal to 0.27 per cent of
GDP, 0.52 per cent of total consumers' average income, or 0.83 per cent
of urban resdents' ncome.
The mpact on employment
If we assume that the mported gran wll replace domestc producton and
crowd out farmers without causing any decline in other farmers' income,
then 4.4 per cent of the grain farmers, equal to 9.2 million, will lose jobs;
although the ncrease n mports can only margnally ncrease employment
opportuntes n the gran export countres due to ther far hgher labour
productvty. Assumng that all these gran mports would come from the
United States, for example, this would create only 40,000 new jobs in its
farmng sector accordng to ts average productvty per capta.
The drect mpact of gran mports
The results show that the major sde effect of gran mports n the short
term s not losses n value but the unbalanced dstrbuton of losses and
gains (Table 5.8). The costs directly impact low-income farmers, resulting
n a relatvely large percentage declne of ther ncomes; whereas the
benefits mainly goes to urban consumers who have a much higher income,
and therefore accounts for only a small proporton of ther ncome. In
addition, due to the inelastic adjustment, job losses will exert pressure
