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Presentation

2nd Revision

Introduction

 
Arguments - Impact
Agricultural Policy
There can be no doubt that China's reorientation in agricultural policy had a massive impact on the farmers' capacity to feed the population. China's political reforms have greatly boosted food production since 1978. The introduction of family farming on land rented from the state on a long-term basis has released the long-suppressed entrepreneurial spirit among Chinese farmers. Although the land is still legally owned by the state, the farmers now consider it as similar to private property. They are more motivated to increase its productivity and maintain its fertility. The introduction and liberalization of food markets and the gradual decline of the subsidized food distribution system run by the state, have opened up new possibilities for farmers. Those in close proximity to urban areas can sell their products on the free market. This has promoted greater market orientation in agricultural cultivation, which is a precondition for a commercial agricultural sector. This trend is clearly mirrored in the greater diversity of food production since 1978, which now includes more vegetables, fruits, tobacco, tea, meat, and fish. Although China's agricultural reforms since 1978 have also had some negative side effects, these are far outweighed by the benefits.
Short Description of the Problem
The impact of the agricultural reforms since 1978 on China's food security has been twofold:
WB00860_.gif (262 bytes) There are numerous benefits, ranging from a massive production increase in basic food commodities (grains) to greater diversity and higher quality of products.
WB00860_.gif (262 bytes) However, some old problems still exist and a few new problems have emerged, such as the decline of state investments in agricultural infrastructure.
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Discussion
Benefits of the agricultural reforms Tables & Charts
There is overwhelming evidence from both statistical data and direct observation that the average food supply to China's population has significantly improved since 1978 - both in quantity and quality. Of course, this general trend does not imply that all people in all provinces have access to adequate nutrition at all times. There are very poor regions in China, where the food supply can be insufficient in a particular season or for a certain social group. But pockets of malnutrition can be documented even for highly developed countries such as the USA, where people live on food stamps for extended periods.
The overall food balance for China has certainly improved significantly in the past two decades (see the In-Depth Analyses of grain and non-grain commodities and the In-Depth Analysis of China's food balance in 1996; see also Table 1).
Change in grain supply

Change in supply of
non-grain food

China's food balance
in 1994/1996

Problems
The political reforms have strengthened the position of individual farmers by allocating the land to millions of farm households - not in a legal sense, but for all practical purposes. This has essentially created "small farm" agriculture, because the government has tried to give most rural households access to land. These production units are often too small for the highly productive commercial agricultural sector. Farmers can feed their own families and fulfill the state quotas for grain, but they can rarely generate enough profits to invest in machinery and better agricultural inputs (fertilizers, pesticides). To solve these problems, the government has introduced land transfer rights so that farmers who have found jobs in the nonagricultural sector can transfer their land to larger farms. However, for ideological and practical reasons, this possibility is less effective than it could be. To uphold the socialist principle of equal access to land, local and regional cadres have imposed many restrictions to prevent the creation of large-scale private farms. Moreover, there are not enough non-agricultural jobs in rural areas for the millions of small-scale farmers to give up their land. China needs an improved farm structure with commercially viable production units. Central Government Investments in Agricultural Research
Table 1


Central Government Investments in Agricultural Research
Table 2

Reform of China's farm structure is especially important, because private investments are urgently needed to improve and maintain the crumbling agricultural infrastructure, especially dams and irrigation systems. In recent years, the state has withdrawn from many of the tasks it had organized and financed during the period of collective farming - particularly maintenance and adequate expansion of agricultural and hydrological infrastructure. State capital investments in agriculture have leveled off or even declined. The central government's spending on agricultural research has lagged behind investments in other economic sectors (see Table 2). One measure to improve the willingness and capacity of farmers to invest in infrastructure, production inputs, and soil conservation measures would be long-term land contracts or the privatization of agricultural land. However, China's politicians do not yet seem to be ready for this break from socialist ideals. In the meantime, various economic measures - such as a banking system for small-scale rural credits or more market-oriented grain procurement prices - could strengthen the rural financial system, mobilize farmers savings, and encourage private investment in the agricultural sector.
Related Arguments

Agricultural Policy:   Trends     Impact    Data Quality    Prediction Error    Intervention Possibilities    Intervention Costs

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Revision 2.0 (First revision published in 1999)  - Copyright 2011 by Gerhard K. Heilig. All rights reserved. (First revision: Copyright 1999 by IIASA.)