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Abstract

This study examined the effects of China’s grain subsidy program, the largest food self-sufficiency project in the developing countries, on grain-sown areas within a context of liquidity constraints. A large household level panel was used to evaluate how the subsidy affects the cultivation schedule of farm households through the relaxation of households’ liquidity con¬straints. Results suggest that in general, the grain subsidy program significantly improved farm households’ grain planting areas for liquidity-constrained households. This finding provides a more comprehensive understanding of the effects of China’s grain subsidy than previous studies

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