Date of this Version
Cornhusker Economics, July 18, 2018, agecon.unl.edu/cornhuskereconomics
Recent World Trade Organization (WTO) disputes have brought China’s agricultural trade policy back into the spotlight. In November 2008, China issued the nation’s first Outline of Medium and Long-term Plan for National Food Security (China Central People’s Government, 2008), in which they stipulate that the country will seek to stabilize the area sown to grain and achieve more than 95% grain self-sufficiency. Trade restrictions are argued to support implementing this plan because increased imports of grains and soybeans will lower prices, causing grain and soybean farmers to leave farming, thereby generating food insecurity (Wong and Huang, 2012). Others suggest that China may not have a comparative advantage in grain or soybean production, and switching to higher-value agriculture or working offfarm could increase the incomes of both rich and poor farmers (Zhu, Hare, and Zhong, 2010). In this article, we evaluate the effect of past agricultural market liberalization on rural Chinese household food security as a measure of household welfare. Because market liberalization is likely to differ in its effect across households, we explore the distributional effect of liberalization on rural household food security. We find that liberalization primarily improves household food security by increasing off-farm income, and the effects vary greatly by initial food security status and producer types.