Agriculture Reference
In-Depth Information
the grain self-sufficiency rate constant after the WTO accession. Simulation
of CERD shows that t would cost 7.2 bllon yuan to make up for the tny
reduction of 0.06 per cent in the grain self-sufficiency rate (Table 7.12). If
the target were to restore the full decline in the total food self-sufficiency
rate (1.5 per cent), the cost would be as high as 180 billion yuan.
Increasng transfer payments to nland regons was also smulated n
Chapter 6. The ratonale behnd ths polcy opton s that because the
economy as a whole benefits from the WTO accession, there is the possibility
of transferrng ncome from one group to another to make all sectors better
off. However, the simulation gives a similar result to the scenario of halving
the cut in agricultural tariffs. The improvement in regional and rural-urban
household ncome dsparty s acheved at the cost of lower overall welfare
gains—1 per cent less welfare gain than the full tariff cut scenario. Increases
n transfers to the nland regons are made possble through penalsng the
coastal regons that have a hgher rate of return.
Another polcy opton s to ncrease agrcultural research and
development to improve agricultural productivity in China, as suggested
by many authors, for example, Fan, Fang and Zhang (2001) and Hazell
and Haddad (2001). Simulations of CERD were conducted to find out how
much productvty mprovement s requred to keep the gran and food
self-sufficiency rates constant after WTO accession. It was found that the
required productivity improvement is 0.32 and 2.85 per cent, respectively,
for constant grain and total food self-sufficiency rates. To give an idea
about what these figures mean, agricultural TFP in the past may be used
as a benchmark. According to Fan (1997), agricultural TFP was 5.1 and 3.91
per cent per annum during the periods 1978-84 and 1984-96. A 2.85 per
Table 7.12 Cost of restoring grain self-sufficiency to the pre-accession
level (mllon yuan)
Eastern
Central
Western
Natonal
EV (million yuan)
2,117.987
2,368.282
2,686.207
7,172.476
Source: Author's CERD smulaton.
 
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