Multi-criteria decision support for China agricultural domestic support based on CGE model

Agricultural domestic support is a sensitive issue for all countries producing agricultural commodities. To simulate the dynamic influence of changes in agricultural subsidies on non-agricultural sectors, this paper improved the Indian Storm models by embedding the labor force module based on the new Austrian model. The simulation result showed that a steady increase in the rate of producers’ subsidy had little effect on capital flows, non-agricultural sectors and the rate at which agricultural surplus labor force transfers to non-agricultural industries. The non-agricultural industry should benefit from an increase in the rate of producer subsidies, as total consumption expenditure by non-agricultural industry is reduced. Producer subsidies facilitate transfer of labor force from agriculture to the light manufactures sector the most, the fertilizer and service sectors second, and the heavy manufactures sector the least.