Agric. Econ. - Czech, 2026, 72(3):156-170 | DOI: 10.17221/187/2025-AGRICECON

Subsidies and farming: A microempirical analysis of financial allocation to promote agricultural productionOriginal Paper

Congxian He1,2, Lulu Yu1,3, Huwei Wen4
1 Soviet Area Revitalization Institute, Jiangxi Normal University, Nanchang, P.R. China
2 Research Base for Revitalization and Development of Old Revolutionary Base Areas of Jiangxi Province, Jiangxi Normal University, Nanchang, P.R. China
3 School of Marxism, Jiangxi Normal University, Nanchang, P.R. China
4 School of Economics and Management, Nanchang University, Nanchang, P.R. China

Agriculture's stable development is vital to the national economy, and its vulnerability justifies fiscal support. On the basis of data from the China Family Panel Studies from 2012 to 2022, this study examines how fiscal allocation affects agricultural production, particularly rural households' grain-growing enthusiasm and their productive income. Results show that public expenditure significantly boosts agricultural production, supported by ordered probit and ordinary least squares fixed effect models and confirmed in robustness tests. Mechanistic tests indicate that agricultural public expenditure promotes agricultural production by improving agricultural technical levels, enhancing production services, and expanding the agricultural scale. Heterogeneity analysis shows that agricultural public expenditure has a stronger effect on grain-growing enthusiasm among low-educated rural households and on productive income in major grain production areas. It also has a stronger effect on productive income for rural households with emerging and prime-aged farmers, in nonmajor grain production areas, and those with high educational attainment. The research offers empirical insights for exploring ways to achieve the 'dual goals' of food security and poverty alleviation.

Keywords: agricultural production; fiscal allocation; food security; rural household

Received: April 28, 2025; Revised: November 6, 2025; Accepted: November 7, 2025; Prepublished online: March 25, 2026; Published: March 31, 2026  Show citation

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He C, Yu L, Wen H. Subsidies and farming: A microempirical analysis of financial allocation to promote agricultural production. Agricultural Economics. 2026;72(3):156-170. doi: 10.17221/187/2025-AGRICECON.
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