Agricultural and Policy Agricultural and Policy Development in ChinaDevelopment in China

Dr. Ke BingshengDirector-General

Research Center for Rural Economy, Ministry of Agriculture

OutlineOutline

Basic data and facts on agricultural Basic data and facts on agricultural sector in Chinasector in China

Achievements since reform eraAchievements since reform era

Major current concernsMajor current concerns

New orientation of agricultural policy in New orientation of agricultural policy in ChinaChina

Basic data and facts on Basic data and facts on agricultural sector in Chinaagricultural sector in China

Basic dataBasic data

Agricultural population: 750-950 million, Agricultural population: 750-950 million, depending on definition (about 200 depending on definition (about 200 migrants)migrants)

Agricultural households: 250 millionAgricultural households: 250 million

Average farm size: 0.5 haAverage farm size: 0.5 ha

Most of the agricultural activities take Most of the agricultural activities take place in eastern half of the countryplace in eastern half of the country

Population distribution in ChinaPopulation distribution in China

Grain Production in ChinaGrain Production in China

Meat production in ChinaMeat production in China

Cotton Production in ChinaCotton Production in China

Sugar crop production in ChinaSugar crop production in China

Structure of agriculture in ChinaStructure of agriculture in Chinain % of production valuein % of production value

Croppi ng54%Li vestock

35%

Fi shery11%

Cropping structure in ChinaCropping structure in China

Ri ce18%

Wheat14%

Corn16%

Rapeseeds5%

Others27%

Peanut3%

Cotton3%

Roots6%

Beans8%

Meat production structure in Meat production structure in ChinaChina

Pork65%

Beef9%

Mutton5%

Poul try21%

Agriculture in national economyAgriculture in national economy　　 　　 19801980 20042004

GDPGDP %% 3030 1212

Population Population %% 8181 5757

EmploymentEmployment %% 6969 4343

ExportExport %% 2020 33

ImportImport %% 1515 44

Food expenditure, urbanFood expenditure, urban %% 5757 3737

Food expenditure, ruralFood expenditure, rural %% 6262 4646

Achievements since reform Achievements since reform eraera

Development 1978-2005Development 1978-2005

Grain production growth: 1.4% on average per Grain production growth: 1.4% on average per year year Meat production: 8.56-77.43 million tons, Meat production: 8.56-77.43 million tons, increased by 8 timesincreased by 8 timesFishery production: 4.65-51.06 million tons, Fishery production: 4.65-51.06 million tons, increased by 10 timesincreased by 10 timesFarmers’ income: 134-3255 RBM, 7% annually Farmers’ income: 134-3255 RBM, 7% annually in real termin real term– Color TV sets: 84%– Mobile phone: 50%

Farmers’ rights: free decision in agricultural Farmers’ rights: free decision in agricultural production, marketing and non-farm and non-production, marketing and non-farm and non-rural job seeking rural job seeking

Major current concernsMajor current concerns

Most important policy concernsMost important policy concerns

Food (grain) securityFood (grain) security

Growth of farmers incomeGrowth of farmers income

Widening urban-rural gaps in various Widening urban-rural gaps in various areasareas

Food securityFood securityNet importer: additional 13% cropping areas Net importer: additional 13% cropping areas would be needed if import of soybean, cereals would be needed if import of soybean, cereals and cotton should be produced domestically in and cotton should be produced domestically in 2005 2005

Continued demand due to population growth, Continued demand due to population growth, income improvement and growth of other income improvement and growth of other sectors: sectors: about 5 million tons per year

Stagnated production due to resource constraintsStagnated production due to resource constraintsReduction of arable land due to urbanization

Degradation of land quality

Shortage of irrigation water

Declining grain cropping areaDeclining grain cropping area

14. 014. 515. 015. 516. 016. 517. 017. 518. 018. 5

1978

1981

1984

1987

1990

1993

1996

1999

2002

100m

illi

on M

u

Stagnated yieldsStagnated yieldskg/Mu

: /单位 吨 公顷 : /单位 吨 公顷

粮食 粮食3 Rice Wheat Corn 油料 棉花 甘蔗

1978 1978 168 197 1978 265 123 187 56 30 25641979 1979 186 213 1979 283 142 199 61 33 28011980 1980 182 207 1980 275 128 208 65 37 31741981 1981 188 216 1981 288 140 203 74 38 35901982 1982 208 243 1982 326 163 218 84 41 37651983 1983 226 262 1983 340 187 242 84 51 31741984 1984 241 278 1984 358 198 264 91 60 36191985 1985 232 269 1985 350 196 240 89 54 35611986 1986 235 274 1986 356 203 247 86 55 35241987 1987 242 281 1987 361 203 263 91 58 36761988 1988 239 275 1988 352 198 262 83 50 35401989 1989 242 281 1989 367 203 259 82 49 33921990 1990 262 301 1990 382 213 302 99 54 38071991 1991 258 297 1991 376 207 305 95 58 38891992 1992 267 305 1992 387 222 302 95 44 39061993 1993 275 317 1993 390 235 331 108 50 39331994 1994 273 311 1994 389 228 313 110 52 38431995 1995 283 323 1995 402 236 328 115 59 3877

0100200

30040050019

78

1981

1984

1987

1990

1993

1996

1999

2002

Ri ceWheatCorn

Declined grain productionDeclined grain production 100million tons

2. 02. 53. 03. 54. 04. 55. 05. 5

Wheat productionWheat production100million tons

0. 40. 50. 60. 70. 80. 91. 01. 11. 21. 3

Paddy rice production in ChinaPaddy rice production in China

1. 2

1. 4

1. 6

1. 8

2. 0

2. 219

78

1981

1984

1987

1990

1993

1996

1999

2002

2005

Wheat trade in ChinaWheat trade in China million tons million tons

0

2

4

6

8

10

12

14

161980

1983

1986

1989

1992

1995

1998

2001

2004

I mpor t

Expor t

Rice trade in ChinaRice trade in China million tons million tons

0

1

2

3

4

I mport

Export

Soybean trade in ChinaSoybean trade in Chinamillion tonsmillion tons

05

10152025

1980

1983

1986

1989

1992

1995

1998

2001

2004

Producti onI mport

Export

Cotton trade in ChinaCotton trade in China million tons million tons

0

400

800

1200

1600

2000

2400

I mport

Export

Edible oil import in ChinaEdible oil import in China(Total, palm oil, soy oil and rapeseed oil)(Total, palm oil, soy oil and rapeseed oil)

0

100

200

300

400

500

600

700

2001 2002 2003 2004 2005

总计

棕榈油

豆油

菜籽油

Agricultural trade in ChinaAgricultural trade in China USD billion USD billion

0

5

10

15

20

25

30

35

I mport

Export

Income issuesIncome issues

Widening urban-rural gapWidening urban-rural gap

Large regional disparityLarge regional disparity

Poverty and low income populationPoverty and low income population

Urban and rural income RMB per capita

02000

400060008000

1000012000

城镇 农村

Urban-rural income gaprural=1

2. 562. 86

2. 47

3. 23

1. 82

1. 5

2. 0

2. 5

3. 0

3. 5

1978

1981

1984

1987

1990

1993

1996

1999

2002

2005

Regional Income DisparityRegional Income Disparity

Low income populationLow income population

Poverty population: Poverty population: – per capita income bellow 683 RBM: per capita income bellow 683 RBM: 23.65 23.65

millionmillion

Low income population: Low income population: – per capita income bellow 944 RBM: per capita income bellow 944 RBM: 64.32 64.32

millionmillion

Arable land per head of agricultural Arable land per head of agricultural population, hapopulation, ha

0. 0

0. 2

0. 4

0. 6

0. 8

1. 0

1. 2  A

zerb

aija

n

  Ban

glad

esh

  Bhu

tan

  Cam

bodi

a

  Chi

na

  Geo

rgia

  Ind

ia

  Ind

ones

ia

  Kor

ea,

  Lao

s

  Mal

aysi

a

  Mya

nmar

  Nep

al

  Pak

ista

n

  Phi

lippi

nes

  Sri

Lan

ka

  Tha

iland

  Tur

key

  Uzb

ekis

tan

  Vie

t Nam

Arable land per head of agricultural Arable land per head of agricultural population, hapopulation, ha

0. 0

10. 0

20. 0

30. 0

40. 0

50. 0

60. 0  

Arge

ntin

a

  Br

azil USA

  Ca

nada

  Au

stra

lia

  Hu

ngar

y

  S

Afri

ca

Development of agriculture’s share Development of agriculture’s share in Chinain China

0

10

20

30

40

50

60

70

80

GDP Empl oyment

Agriculture’s share in GDP and Agriculture’s share in GDP and populationpopulation

0102030405060708090

100  

Azer

baij

an

  Ba

ngla

desh

  Bh

utan

  Ca

mbod

ia

  Ch

ina

  In

dia

  In

done

sia

  Ka

zakh

stan

  La

os

  Ma

lays

ia

  Mo

ngol

ia

  Ne

pal

  Pa

kist

an

  Ph

ilip

pine

s

  Sr

i La

nka

  Th

aila

nd

  Tu

rkey

  Vi

et N

am

GDP Popul at i on

Widening urban-rural gapsWidening urban-rural gaps

Widening urban-rural gaps caused by rapiWidening urban-rural gaps caused by rapid industrialization and urbanizationd industrialization and urbanization

Low improvement in rural education:Low improvement in rural education:– Rural economically active population: 7.5% illitRural economically active population: 7.5% illit

erate and semi-illiterate( less than 6 year eduerate and semi-illiterate( less than 6 year education) , 29.2% with 6 year educationcation) , 29.2% with 6 year education ，， 50.250.2% with 9 year education, 13.1% with 12 + yea% with 9 year education, 13.1% with 12 + year education.r education.

Low standards of rural medical serviceLow standards of rural medical service

New orientation of New orientation of agricultural policy in Chinaagricultural policy in China

Building “a new socialist Building “a new socialist countryside”countryside”

Goals:Goals:– Increase production capacity (national food Increase production capacity (national food

security, raw material needs)security, raw material needs)– Improve farmers living standardsImprove farmers living standards– Strengthen rural infrastructure (road, drinking Strengthen rural infrastructure (road, drinking

water, electricity, biogas, cable TV, living water, electricity, biogas, cable TV, living environment…)environment…)

– Enhance rural education, healthcare and Enhance rural education, healthcare and cultural lifecultural life

– Advance democratic governance in rural areas Advance democratic governance in rural areas

New measuresNew measures

Deepening comprehensive reformsDeepening comprehensive reforms

Shift the focus of governmental Shift the focus of governmental expenditure to rural areas: a higher share, expenditure to rural areas: a higher share, especially in the budget of central especially in the budget of central governmentgovernment

Governmental RevenueGovernmental RevenueRMB billionRMB billion

0500

100015002000250030003500

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

Governmental expenditure on Governmental expenditure on agriculture and rural areasagriculture and rural areas

050

100150200250300350

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

Agricultural support in comparisonAgricultural support in comparison

　　 　　 EUEU USAUSA JapaJapan n

S. S. KoreKore

aaBrazilBrazil ChinChin

aa

Per capita Per capita GDPGDP USDUSD 26702670

0036203620

0033703370

0012701270

0028002800 17001700

Agricultural Agricultural supportsupport

USD USD billiobillio

nn

1039.1039.11

382.1382.1 282.282.55

76.676.6 22.822.8 180180

in % of in % of agricultural agricultural outputoutput

％％ 34.134.1 19.319.3 37.437.4 22.222.2 5.15.1 6.46.4

Support per Support per capita of capita of Agricultural Agricultural populationpopulation

USD/USD/headhead 65256525 61816181 59205920 17701770 1818 2424

To improve agricultural productivityTo improve agricultural productivity

Stricter control on taking farmland for non-farm Stricter control on taking farmland for non-farm purposespurposesIncreased public funding on improving irrigation Increased public funding on improving irrigation systems and other infrastructure systems and other infrastructure Increased public funding on agricultural Increased public funding on agricultural technical extensiontechnical extensionIncreased funding for agricultural research:Increased funding for agricultural research:– Agricultural research to be granted high priority in Agricultural research to be granted high priority in

the public investment;the public investment;– The share of agricultural research on the total The share of agricultural research on the total

national research budget to be increased; the total national research budget to be increased; the total research budge itself will increase significantly.research budge itself will increase significantly.

To increase farmers’ income

Increasing agricultural income:Increasing agricultural income:– Reducing costReducing cost– Increase productionIncrease production– Stabilizing pricesStabilizing prices– RestructuringRestructuring

promoting off-farm employment in and out of promoting off-farm employment in and out of rural areasrural areas– Better policy framework for rural workers in citiesBetter policy framework for rural workers in cities

Direct subsidyDirect subsidy

To improve rural infrastructureTo improve rural infrastructure

Public investment in rural road, drinking Public investment in rural road, drinking water etc.water etc.

Village renovation:Village renovation:– To and in village roadTo and in village road– Draining systemDraining system– New toilets New toilets – Garbage collection and disposalGarbage collection and disposal– New housing (design and blueprints) New housing (design and blueprints)

To enhance rural education, To enhance rural education, health care and social securityhealth care and social securityMore support to implementing 9 year basic More support to implementing 9 year basic education:education: – Tuition free Tuition free – Free textbook and subsidy to boarding feesFree textbook and subsidy to boarding fees– Improving teaching facilities and teachers salaryImproving teaching facilities and teachers salary

More support to rural health careMore support to rural health care::– New medical insurance system for serious illnessNew medical insurance system for serious illness– More investment in rural hospitalsMore investment in rural hospitals

Social security:Social security:– More money for poverty reduction More money for poverty reduction – Pilot projects for rural pensionPilot projects for rural pension