Importance of Agriculture
Today, China has the largest agricultural economy in the world producing upwards of 20% of all of the world's food. According to Colin Carter from the Giannini Foundation of Agricultural Economics "China produces 18% of the world’s cereal grains, 29% of the world’s meat, and 50% of the world’s vegetables... it ranks as the largest global producer of pork, wheat, rice, tea, cotton, and fish " (Carter, 2011). As a result of the economic importance of farming and agriculture in China, nearly 33% of the workforce works in the agriculture sector. This is second only to the services sector which makes up nearly 37% of the workforce (Carter, 2011). However, the effectiveness and sustainability of the agricultural practices in China have been long been in question.
Challenges in Agriculture
While China is the third largest country in terms of land mass, it is the largest country in terms of population. China is home to a staggering 1.3 billion people and 22% of the worlds population. However while they have the largest land mass, only 9% of the land is farmable and suitable for agricultural purposes (Carter, 2011). With an ever growing population and a dwindling amount of arable land this is problematic. The longterm goal of the Chinese government is to fulfill the peoples demands for foods and agricultural products, encourage rural development, and increase the standard of living for farmers and those who live in rural areas (Carter, 2011). However, lofty as these goals may be, it is the Chinese governments intervention in the agricultural sector that is largely to blame for many of the troubles facing agriculture.
Since China is a central-planning country, the rural agricultural workers have very little influence over the production of their crops. The reason for this is that the government allocates plots of arable land to rural farmers, but then sets quotas for production that much be reached. The farmers are not allowed to sell their products on the market until they have first reached the quota assigned by the government (Carter, 2011). These governmental quotas are a form of price fixing that hurts the economy and the farmers. This allows the government to control the purchase and distribution of many crops. Similarly, because of this system farmers are left unable to grow things like cash crops that would increase their income and quality of life (Carter, 2011).
Another problem is the growing wealth disparity between the urban and the rural citizens. Since the the income elasticity of industrial products is higher than the industrial products of agriculture the agricultural share of GDP will decrease, thus creating a labor surplus in the agricultural sector (Carter, 2011). While this might not be as problematic in a free market society this is highly problematic in Chinese society. In Chinese society people are classified by the government and are assigned either rural or urban careers, however, the rural agricultural workers are not allowed to move to urban areas or benefit from urban programs (Carter, 2011). This leaves them unable to respond to the shift in the labor market causing great wealth disparity and problems.
Since China is a central-planning country, the rural agricultural workers have very little influence over the production of their crops. The reason for this is that the government allocates plots of arable land to rural farmers, but then sets quotas for production that much be reached. The farmers are not allowed to sell their products on the market until they have first reached the quota assigned by the government (Carter, 2011). These governmental quotas are a form of price fixing that hurts the economy and the farmers. This allows the government to control the purchase and distribution of many crops. Similarly, because of this system farmers are left unable to grow things like cash crops that would increase their income and quality of life (Carter, 2011).
Another problem is the growing wealth disparity between the urban and the rural citizens. Since the the income elasticity of industrial products is higher than the industrial products of agriculture the agricultural share of GDP will decrease, thus creating a labor surplus in the agricultural sector (Carter, 2011). While this might not be as problematic in a free market society this is highly problematic in Chinese society. In Chinese society people are classified by the government and are assigned either rural or urban careers, however, the rural agricultural workers are not allowed to move to urban areas or benefit from urban programs (Carter, 2011). This leaves them unable to respond to the shift in the labor market causing great wealth disparity and problems.
Solutions
For the benefit of the workers and the agricultural component of Chinese society action needs to be taken. One possible solution would be for the Chinese government to decrease their intervention in this sect of the economy. Allowing individuals to move from the rural market to the urban labor market would help to stabilize the economy and increase competition. This would aid in closing the gap in wealth and would increase buying power for many individuals as well, thus benefitting the whole economy (Yongxin Quan, 2002). Similarly, ending government contracts for the bulk production of agricultural goods would be a step in the right direction. Ending this type of price fixing and quota oriented work would benefit the country as a whole. Individuals would be able to sell their products right to the market accepting the market value, and would also be able to grow more cash crops if they desired (Yongxin Quan, 2002). This again would lead to an increase in rural income, and rural quality of living.
For more info visit: https://www.ers.usda.gov/topics/international-markets-trade/countries-regions/china/
Header photo: Yanghou Scooter Adventure by Kyle Taylor used under Creative Commons BY 2.0
Sources
Carter, C. A. (2011.). China's Agriculture: Achievements and Challenges. Retrieved December 1, 2016, from http://www.bing.com/cr?IG=2EA3E6261CD3429B8D5D475BC8402393&CID=0AE8AAEF3E676E0928C4A3303F566F19&rd=1&h=XYfZj0nd8fe52n7v0iE4DU9MyFrz7ZS8D2khFuH5ZXw&v=1&r=http://s.giannini.ucop.edu/uploads/giannini_public/42/47/42478f51-6d6a-4575-8dae-d88e2dcf174f/v14n5_2.pdf&p=DevEx,5043.1
Taylor, Kyle. (2008). Yangshou Scooter Adventure. [Digital Image]. Retrieved from https://www.flickr.com/photos/kyletaylor/2572662742/in/photolist-4Vkz1b-on4LWB-4JWTdd-4JXbDy-4VfFsD-n6bkU-4VfGER-NxQSR-brwF5E-4VfJAV-cRnvFo-8P4rQZ-HT2XAq-exCpDE-hHCta-dEpoed-f4XSj8-pksjf4-Nxo3S-4Vk84s-4tH9Zk-4VkCLC-4VfU4n-7iRTcq-ahR1Z-4Vk755-ejWt82-4VfHV4-acoSrJ-dBjhL6-4JSCPe-9MXxid-prdxaq-7NKyvy-j87qT-bnVSds-72Metn-4VgiKV-6t46p8-hHA5N-pHJL6U-n6bXB-4qe5Gc-4JSQra-acoT7A-7tuMg-6t46Pp-H6Ss13-aBqS3J-pHEkBp. Uvailable under Creative Commons Attribution 2.0
Yongxin Quan, Z. (2002, June). An Analysis of Current Problems in China™s Agriculture ... Retrieved December 1, 2016, from http://www.bing.com/cr?IG=48FE07EA73BB4580A9AABFB3632D156E&CID=11C2DAFA0E6C62623728D3250F5D6372&rd=1&h=49tm1ivHKGAGkQDgVbQOgceZNV6GDpqLLhq3iZGYPlA&v=1&r=http://ageconsearch.umn.edu/bitstream/11838/1/quan01.pdf&p=DevEx,5046.1
Taylor, Kyle. (2008). Yangshou Scooter Adventure. [Digital Image]. Retrieved from https://www.flickr.com/photos/kyletaylor/2572662742/in/photolist-4Vkz1b-on4LWB-4JWTdd-4JXbDy-4VfFsD-n6bkU-4VfGER-NxQSR-brwF5E-4VfJAV-cRnvFo-8P4rQZ-HT2XAq-exCpDE-hHCta-dEpoed-f4XSj8-pksjf4-Nxo3S-4Vk84s-4tH9Zk-4VkCLC-4VfU4n-7iRTcq-ahR1Z-4Vk755-ejWt82-4VfHV4-acoSrJ-dBjhL6-4JSCPe-9MXxid-prdxaq-7NKyvy-j87qT-bnVSds-72Metn-4VgiKV-6t46p8-hHA5N-pHJL6U-n6bXB-4qe5Gc-4JSQra-acoT7A-7tuMg-6t46Pp-H6Ss13-aBqS3J-pHEkBp. Uvailable under Creative Commons Attribution 2.0
Yongxin Quan, Z. (2002, June). An Analysis of Current Problems in China™s Agriculture ... Retrieved December 1, 2016, from http://www.bing.com/cr?IG=48FE07EA73BB4580A9AABFB3632D156E&CID=11C2DAFA0E6C62623728D3250F5D6372&rd=1&h=49tm1ivHKGAGkQDgVbQOgceZNV6GDpqLLhq3iZGYPlA&v=1&r=http://ageconsearch.umn.edu/bitstream/11838/1/quan01.pdf&p=DevEx,5046.1