The impact of China’s fertilizer industry de-capacity on agricultural production costs

Abstract

In response to the re-collection of value-added tax and the abolition of fiscal and tax preferential policies for the fertilizer industry in 2015, using provincial panel data from 2011 to 2018, a model was established to analyze the impact of policy changes on agricultural production costs. Research shows that after the implementation of the policy, agricultural intermediate consumption has increased significantly by 11%, and the proportion of fertilizer fees in total costs has increased significantly by 0.5%. It can be inferred that it has increased agricultural production costs, while the profitability of fertilizer companies has not changed significantly , Which proves that after the abolition of preferential fiscal and taxation policies for chemical fertilizers, at least part of the cost of enterprises has been transferred to farmers, which has increased the burden on farmers. Suggestions on the need to rationally guide the transformation and upgrading of fertilizer companies, formulate fertilizer subsidies for farmers, and actively promote reasonable fertilization.