Agricultural subsidy policy is the most important and normal policy tool for one government to support and protect it’s agriculture system. Agriculture subsidy is very important to increase farmers’ income.
This paper primarily analyses the effect of agriculture subsidy policy of our country to our farmers’ income increasing. Firstly, it introduces the present state of our country’s agriculture subsidy policy. Then it separately analyses the theories of farmers’ welfare changes when price support policy, The price-cap policy and direct income subsidy policy come into effect. And it also analyses the effects of these policies to farmers’ income. Finally, it gets conclusion that direct income subsidy policy is more effective in increasing the farmers’ income than these two kinds indirect subsidy policy, and also gives some suggestions for carrying out the agriculture subsidy policy.
【Key words】indirect subsidy policy; direct subsidy policy; price support
policy; the price-cap policy ; direct income subsidy policy