China's agricultural subsidy policy experiences three development stages. Detailed summing up is carried out for achievements of each stage. On the basis of this, this paper discusses problems existing in current agricultural subsidy policy, including high operational cost, out of balance of subsidy structure, little subsidy effort, lack of effective supervision and vacancy of benefit safeguarding mechanism. Finally, it presents suggestions for optimizing China's agricultural subsidy policy, such as regulating direction of agricultural policy, strengthening subsidy effort, taking full advantage of WIO rules, perfecting agriculture-related systems, and establishing and perfecting legal system to support agriculture.