China’s Agriculture and Food Economy in the 21 st 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 poverty Why? 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