1. Agricultural and Policy Development in China Agricultural and Policy Development in China Dr. Ke Bingsheng Director-General Research Center for Rural Economy, Ministry of Agriculture

2. Outline Basic data and facts on agricultural sector in China Achievements since reform era Major current concerns New orientation of agricultural policy in China

3. Basic data and facts on agricultural sector in China

4. Basic data Agricultural population: 750-950 million, depending on definition (about 200 migrants) Agricultural households: 250 million Average farm size: 0.5 ha Most of the agricultural activities take place in eastern half of the country

5. Population distribution in China

6. Grain Production in China

7. Meat production in China

8. Cotton Production in China

9. Sugar crop production in China

10. Structure of agriculture in China in % of production value

11. Cropping structure in China

12. Meat production structure in China

13. Agriculture in national economy 19802004 GDP%3012 Population%8157 Employment%6943 Export%203 Import%154 Food expenditure, urban %5737 Food expenditure, rural %6246

14. Achievements since reform era

15. Development 1978-2005 Grain production growth: 1.4% on average per year Meat production: 8.56-77.43 million tons, increased by 8 times Fishery production: 4.65-51.06 million tons, increased by 10 times Farmers’ income: 134-3255 RBM, 7% annually in real term – –Color TV sets: 84% – –Mobile phone: 50% Farmers’ rights: free decision in agricultural production, marketing and non-farm and non- rural job seeking

16. Major current concerns

17. Most important policy concerns Food (grain) security Growth of farmers income Widening urban-rural gaps in various areas

18. Food security Net importer: additional 13% cropping areas would be needed if import of soybean, cereals and cotton should be produced domestically in 2005 Continued demand due to population growth, income improvement and growth of other sectors: Continued demand due to population growth, income improvement and growth of other sectors: about 5 million tons per year Stagnated production due to resource constraints Reduction of arable land due to urbanization Degradation of land quality Shortage of irrigation water

19. Declining grain cropping area

20. Stagnated yields kg/Mu

21. Declined grain production 100million tons

22. Wheat production 100million tons

23. Paddy rice production in China

24. Wheat trade in China million tons

25. Rice trade in China million tons

26. Soybean trade in China million tons

27. Cotton trade in China million tons

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

29. Agricultural trade in China USD billion

30. Income issues Widening urban-rural gap Large regional disparity Poverty and low income population

31. Urban and rural income RMB per capita

32. Urban-rural income gap rural=1

33. Regional Income Disparity

34. Low income population Poverty population: –per capita income bellow 683 RBM: 23.65 million Low income population: –per capita income bellow 944 RBM: 64.32 million

35. Arable land per head of agricultural population, ha

37. Development of agriculture’s share in China

38. Agriculture’s share in GDP and population

39. Widening urban-rural gaps Widening urban-rural gaps caused by rapid industrialization and urbanization Low improvement in rural education: –Rural economically active population: 7.5% illiterate and semi-illiterate( less than 6 year education), 29.2% with 6 year education ， 50.2% with 9 year education, 13.1% with 12 + year education. Low standards of rural medical service

40. New orientation of agricultural policy in China

41. Building “a new socialist countryside” Goals: –Increase production capacity (national food security, raw material needs) –Improve farmers living standards –Strengthen rural infrastructure (road, drinking water, electricity, biogas, cable TV, living environment…) –Enhance rural education, healthcare and cultural life –Advance democratic governance in rural areas

42. New measures Deepening comprehensive reforms Shift the focus of governmental expenditure to rural areas: a higher share, especially in the budget of central government

43. Governmental Revenue RMB billion

44. Governmental expenditure on agriculture and rural areas

45. Agricultural support in comparison EUUSA Japa n S. Korea BrazilChina Per capita GDP USD2670036200 3370 0 1270028001700 Agricultural support USD billion 1039. 1 382.1282.576.622.8180 in % of agricultural output ％34.119.337.422.25.16.4 Support per capita of Agricultural population USD/head65256181592017701824

46. To improve agricultural productivity Stricter control on taking farmland for non-farm purposes Increased public funding on improving irrigation systems and other infrastructure Increased public funding on agricultural technical extension Increased funding for agricultural research: –Agricultural research to be granted high priority in the public investment; –The share of agricultural research on the total national research budget to be increased; the total research budge itself will increase significantly.

47. To increase farmers’ income Increasing agricultural income: –Reducing cost –Increase production –Stabilizing prices –Restructuring promoting off-farm employment in and out of rural areas –Better policy framework for rural workers in cities Direct subsidy

48. To improve rural infrastructure Public investment in rural road, drinking water etc. Village renovation: –To and in village road –Draining system –New toilets –Garbage collection and disposal –New housing (design and blueprints)

49. To enhance rural education, health care and social security More support to implementing 9 year basic education: –Tuition free –Free textbook and subsidy to boarding fees –Improving teaching facilities and teachers salary More support to rural health care: –New medical insurance system for serious illness –More investment in rural hospitals Social security: –More money for poverty reduction –Pilot projects for rural pension