Abstract:

By constructing China agricultural general equilibrium model (CGE), this paper analyzed the food security issue under the assumption of growth in agricultural subsidies. The results showed that growth in agricultural subsidies would reduce price index of CPI, price index of GDP, price index of investment and price index of export, then stimulate capital, investment, real GDP growth, promote social employment and bring the increment of nominal wage, real wages, household disposable income, and motivate household consumption, government consumption. Real depreciation of RMB made export growth and tariff revenue increased, terms of trade was improved, national macroeconomic maintained good momentum of growth. Therefore, the intensity of agricultural subsidies must be continued to increase, and the real efficiency of agricultural subsidies should be improved, which is very important for national food security.