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The Reform of the Policies and Businesses of US Commodity Credit Corporation: Relevant Enlightenments to China（No.66, 2017）
2017-09-13
By Cheng Yu, Research Department of Rural Economy of DRC, Pu Mingzhe, Renmin University of China, Xu Xuegao, the Academy of Agricultural Sciences of Jiangsu Province
Research report No.66, 2017 (Total 5141) 2017-6-9
Abstract: The Commodity Credit Corporation (CCC) transformed agriculture-friendly policies through market-oriented credit and insurance measures, thereby preventing the distortion of agricultural commodity prices and averting the restrictions imposed by WTO regulations on the quota of agricultural support funds. The policies also cushioned the risks confronted by agricultural producers and enabled them to respond to the market demand. As China is now confronting similar problems once faced by the U.S. in late 20th century, lessons drawn from CCC will fuel the reform of China’s agriculture-friendly policies. China needs to establish a mechanism to adjust the policy-backed protected price in accordance with market performance to stabilize the market price and move faster to develop income support insurance so as to ensure agricultural producers’ basic profits. The mortgage and warrant mechanism of agricultural asset needs to be innovated to provide large-scale agriculture producers with marketing and equipment loans. Besides, new technologies need to be adopted to improve the effectiveness of agricultural subsidies in a targeted manner and guide the agricultural production to perform in line with the market demand resiliently.
Key words: the US Commodity Credit Corporation (CCC), policies supporting agriculture-friendly policies, agricultural commodity at protected price, agricultural production support
