This article reviews the literature related to food subsidies. Based on research data of Xiangyin County, Hunan Province, the article analyses the win-win situation for food subsidy: farmers' income has increased and they are more willing to produce more grain, the government function is separated from indirect subsidies of grain and the state-owned grain enterprises become the main competition in the market, the fund of food subsidies is more efficient, and dissolve and release of the financial risk at all levels gradually. While there are s...