Government Policy on Farming

First of all, the government develops agriculture so as to raise the gross national product (GNP). It can either impose direct or indirect measures. Subsidies, low-interest loan and guaranteed price can raise the quantity of farming output, i.e. the yield. With the increase of capital, quality of farming output can also be raised. For examples, the use of combine-harvestor can ensure the crop to be fresh. Better seeds can be produced. In addition, quotas are implemented to discourage a particular kind of product importing from other countries. The domestic production increases after the imposition of quotas. These directly influence the production of farming. Moreover, China imposes direct control on farm production. It set up commune system to control what to grow and how much to grow. However, the government forces the farm to install the anti-polluted equipment. It increases the production cost.

Some governments, such as Hong Kong government, develop agriculture training schemes to give advice on new methods. In this way, the yield can be increased. Besides, some government would develop research and development project so as to improve the yield and quality of technology including the scientific farming method, mechanization, and soil conservation etc. For example, the genetic food is a new kind of products. The food is rich in nutrients. The government also subsidies the transport cost or open the domestic or overseas market. It encourages the farm production.

Sometimes the effects of government subsidies on farming output are offset by the slow growth of productivity at different localities such as natural hazards. For example, flooding is frequently occurred in South China. Rice production is drastically decreased. Crops can hardly grow despite considerable input of subsidies. Moreover, pests and diseases are also bad for crop growing.

Government subsidies may also be offset by malmanagement of the subsidies. For example, if a farmer uses all of the subsidies for purchasing fertilizers. Overuse of fertilizers will cause eutrophication. It pollutes the environment. Besides, political instability may also affect farming. For example, wars may draw labour to warfield. And products are drawn b government. Sometimes, outputs are destroyed in advance. Furthermore, farmers may not aim to maximize profits but only to gain interests. Perception, traditional believes and farming inertia reduces the incentive of farmers.

When the demand of products decreases, the effect of government subsidies will then become slightly. The synthesis substitutes the rubber. The rubber plantation faces the problems from the recession of market demand. The people also change their taste on the foods. The organic food is healthy for people. The demand for the organic food increases.

Finally, if the cost increases to a great extent those farmers cannot afford due to inflation rate or high import tax. They would give up their production.

In conclusion, the government plays an important role in the farming activities. However, in some cases, government subsidies may not necessarily lead to a corresponding increase in farming outputs.

By Ho Yun Sang and Tsang Kin Tat