The Direction of China's Agricultural System Reform: Focusing on the Problems Facing Farmers and the Farming Industry

ABSTRACT

The Chinese agricultural system is in the midst of a transition from command economy to market economy. In order to respond to growing demands for food as China's population continues to increase, it is vital that China increase food production. Under the precondition that expansion of rice cultivation acreage is not a feasible solution, strategies for increasing the productivity of existing individual plots must be realized. It is imperative that plans for increasing food-based agricultural output focus not only on expanding quantity, but also securing safety and quality as well.

Falling income for farmers is cited as the primary cause of China's agricultural woes. Though bumper crops have continued for the past few years, the revenue of farmers has not risen significantly, and the income gap between rural and urban areas is actually increasing. The reason for declining revenues for farmers is not just declining food prices, but more importantly the levying of various added costs at the hands of regional governments. If the problem of declining incomes for farmers is not resolved, the desire for farmers to continue food production will decrease, imperiling food supplies in the future and endangering the stability of Chinese society.

While the Chinese government is concerned about the impact of admission to the WTO on its agricultural industry, the government is not forthcoming with its vision on where to begin agricultural reform. In order to plan for competition and streamlining in the agricultural industry, it is first necessary to reform agricultural administration. The problems with current agricultural administration include the fragmentation of state apparatus by function (e.g. separate organizations for production, circulation, etc.) and a marked disinclination toward executing comprehensive agricultural policy measures and strategies. To rectify this, comprehensive "agricultural committees" must be established.

As a result of a lack of legitimized financing methods for regional governments below the county level (e.g. town and village level), various nominal fees are often levied against farmers. The central government is taking this problem seriously, and has issued notices banning the practice of egregious levies; additionally, in regions such as the Anhui province, the government is in the midst of testing agricultural reforms. The democratic elections that are currently being held at the village level, however, must be applied at higher levels in order to thoroughly resolve this issue.

According to demographic projections, it is estimated that China's total population will reach 1.4 billion in 2010, and will surpass 1.6 billion by the year 2030. Thus, it is necessary to plan increased food production premised on the preservation of current levels of cultivated acreage. To this end, a new image for the future of the agricultural industry must be devised. Specifically, China must actively promote the transformation of agriculture to a market-oriented, information-oriented, and agribusiness-oriented industry. Up until now, inconsideration of consumer needs has been a burden to China's agricultural production system. China's new agriculture industry must utilize information technology, eliminate the asymmetry of information that has plagued it in the past and construct a more productive agricultural system.

In the long term, agricultural problems cannot be solved at a country-to-country level, but rather solutions must be found at the regional level. Japan and China are Asia's two major powers, and in order to construct a framework for the security of food supplies, it is critical to strengthen dialogues between the two nations. Furthermore, solutions are not limited to the state level, but rather increased exchange at the national level must also play an important role.