Analysis of Theoretical Basis of Direct Subsidies for Grain Production

Financial distribution to compensate grain production reflects governmental macro-control on grain production and supply. With the reference of agricultural basic theory, agricultural multi-function theory, economic externality theory, public finance and other theories, this article points out that direct subsidies for grain production is reasonable and necessary with six main theoretical basis, namely fundamentality, multi-function, positive externality of grain production, particularity of grain supply and demand, grain safety being closely linked with national security and basic function of service-oriented government.