China’s Agriculture and Food Economy in the 21st Century

Opening Remarks

Scott Rozelle, UC Davis

Transformation Path (all countries in the world)

Percent of Pop’n in Ag. Sector

Income per Capita

Source: World Development Report, 2000

Transformation Path

Percent of Pop’n in Ag. Sector

Income per Capita

When countries are poor (like China in the past) … in the early stages of development:

Food Security is important …

-- new technology

-- irrigation, etcetera

-- incentives to farmers

Transformation Path

Percent of Pop’n in Ag. Sector

Income per Capita

Development:

if a country is successful in developing, it will necessarily move along this rural-urban transformation path (like China is doing now!)

Policies to directly support this process are clear (though not easy)

• Create Jobs

• Create Welcome Environment in Cities

• Raise Human Capital of Farmers– EDUCATION, EDUCATION, EDUCATION

[plus health and training]

Role of Agriculture

Raise income

Affects food security

Also: decrease inequality / decrease povertyWhy? every household in China has land and is a farmer

Commodity Markets

Increase specialization

Raise allocative efficiency

New Technology/Investment

Increase output / unit of land

Raise technical efficiency

Mechanization

Substitute for ag labor

Raise labor productivity

Cultivate Land Rental Mkts

Increase land quantity

Raise labor productivity

MODERNIZATION PROCESS

Urbanization; Industrialization

Shift from farm to off farm through off farm labor mkts [5]

Human capital;

Breakdown barriers;

Improve business environment;

-- rural businesses

-- generally

COMMUNITY DEVELOPMENT

Objective:

Improve rural incomes

Keep MODERNIZATION going!

Provide Minimum Living Standard

Food security

I. Create new environment for rural development:

-- Fiscal Policy

-- Marketing Environment

Domestic Mkts

International Trade

-- New Partnerships, FPAs

-- Protect Environment

II. Invest in ag/rural resources

Cultivated Land

Manage quantity

Enhance w/ Technology

Invest in Water and Other

Credit

Ultimate Goal

Our Goal

• Welcome!

• Looking forward to an interesting meeting, stimulating discussion and warm fellowship