Abstract:Based on our 28 cities formulated fertilizer subsidy data, the paper estimates the effect of subsidy on agricultural technical efficiency and subsidy region priority using a four-stage DEA-Tobit method in consideration of the environment and policy factors. The results are as follows: firstly, farmers’ average income per householder has positive effect on technical efficiency; secondly, after controlling the environment variable, although our total technical efficiency increases, the investment deficiency exists; thirdly, the subsidy has a positive impact on improving the technical efficiency in Ⅰ-class and Ⅱ-class areas, but it has little impact on the technical efficiency in Ⅲ class and Ⅳ class areas; finally, the sequence of the technical efficiency in “eight-type”region is northeast region> middle Yellow River region> middle Yangtze River Region> northern coast region> northwest region> southwest region> southern coast region> east coast region. Therefore, the paper proposes subsidies should be tended toⅠ-class and Ⅱ-class areas.