Influences of corn price fluctuations on farmers'welfare in main corn production areas
In recent years, China's corn price fluctuated often and had significant impacts on farmers' welfare. Based on the compensation principle of welfare economics and a panel data of 20 main corn production provinces in China from 2001 to 2015, and applying the path analysis and the system GMM estimation methods, this paper analyzed the corn supply and demand model of farmers' subjective initiative and the objective environment to estimate the impact of corn price fluctuation on farmers' production, consumption and total welfare in the main production areas. Results show that: the change of corn price is in the same direction with farmers' production welfare and in the opposite direction with farmers' consumption welfare. Along with the agricultural supply-side structural reform advancement, the welfare of farmers in main production provinces drops significantly with obvious differences among different provinces. The different comparative advantages of different provinces have important but distinct impacts on farmers' planting enthusiasm. This research also finds that the planting structure and urbanization level are important factors affecting corn price. The impact of total factor productivity on corn production is not prominent. Based on the above results, this paper proposes the following policy suggestions: strengthening the macro-control of food prices and improving agricultural subsidy policy, actively cultivating new-type professional farmers, building more production supporting facilities and enhancing social security services in the main production areas, guiding the rational adjustment of corn planting structure and value-added processing, and supporting the development and the promotion of high technology.