The Impact of Chinese Rice Support Policies on Rice Acreages

Declining arable land and yield stagnation challenge food security in China. Since 2004, the Chinese government has introduced a bundle of subsidies and income support measures to stimulate production and increase national food security, including a minimum procurement price in the main rice-cultivating regions. Rice acreages have increased since 2004, but this could also be due to rising rice price levels nationally and globally. This raises the question whether the rice support policies were effective. Using a natural experiment created by the minimum procurement price policy being introduced in selected regions, we use a dynamic fixed effects model to perform a difference-in-differences analysis on the effectiveness of these rice support policies. We find that indica rice acreages respond to changes in the rice prices, and, controlling for rice prices, that China’s rice support policies were effective in increasing rice acreages of both early and late indica between 2004 and 2017.