china’ agricultural innovation system: issues and reform · 1980 1985 1990 1995 2000 2005 2010...
TRANSCRIPT
China’ Agricultural Innovation System:
Issues and Reform
Ruifa Hu1,2, Jikun Huang2
1. School of Mangment and Economics, Beijing Institute of Technology 2. Center for Chinese Agricultural Policy, Chinese Academy of
Sciences
Average annual growth rate in agricultural GDP
was about 4 times of population growth rates
Average annual growth rate
(%) of agricultural GDP
0
1
2
3
4
5
6
7
8
0
1
2
3
4
5
6
7
8
1980 1985 1990 1995 2000 2005 2010
Annual growth rate (%) of
population in 1980-2010
Rural poverty incidence in China, 1978-2007
0
5
10
15
20
25
30
35 Under official poverty line
Under $1/day in PPP
(Percent of Population)
The fall in the poverty rates in China account for MOST of the entire world’s
fall in poverty between 1985 and 2005
Total Factor Productivity for rice, wheat and
maize in China, 1979-94
50
100
150
200
1979 1981 1983 1985 1987 1989 1991 1993 1995 1997
Rice
Wheat
Maize
After middle 1980s, technology
has been major factor affecting
productivity growth
-3
-2
-1
0
1
2
3
Early Indica Late Indica Japonica Wheat Maize Soybean Cotton
Output
Input
0
1
2
3
4
5
Early Indica Late Indica Japonica Wheat Maize Soybean Cotton
TFP
-4
-2
0
2
4
6
8
Early Indica Late Indica Japonica Wheat Maize Soybean Cotton
TE
TC
Source: Jin, Huang and Rozelle. 2009
Input reductions
Output rises
Total Factor
Productivity Rises
Mostly Technical Change (rising of
production frontier) … China is
already operating efficiently (at
frontier)
Output, Input, and TFP annual growth rate and
Decomposition of TFP Main Grain Commodities and Cotton
(1995-2004)
Technology has been a major engine of food and agricultural growth in China
• Roles of agricultural research: – engine of growth
– food security and poverty reduction
– competitiveness and farmer income
– environment preservation
• Changing agriculture requires changing
technology
– new modern technologies (e.g., biotech)
– knowledge-intensive
– NRM conservation
– product quality
– high value products
– …
Questions and policy issues
• What is the main reason that the R&D has contributed significantly to China’s agricultural growth?
• What we can learn from China’s experiences / lessons?
• What are the challenges which China should consider in its current agricultural R&D reform?
• …..
Rest of presentation
• China’s R&D system
• Challenges and reforms
• Concluding remarks
China’s agricultural R&D system:
Organization Chart for Agricultural Research (National level)
National Level
State Development
Planning Commission
Ministry of
Finance
Chinese Academy
of Science
Ministry of Science
and Technology
13 Forestry
Res. Institutes
Chinese Academy
of Forestry
State Forestry
Bureau
Mechanization
Institutes
Chinese Academy
of Agri. Mechanization
State Bureau of
Machine Building
40 Research
Institutes/Centers
Chinese Academy of
Agri. Sciences
9 Research
Institutes
Chinese Academy of
Tropical Agri.
8 Research
Institutes
Chinese Academy
of Fishery
Ministry of
Agriculture
Agricultural Res.
Institutes
6 Agricultural
Universities
Ministry of
Education
National
Government
State Council
National level research centers account for:
10% of total research staff
15% of total budget
Provincial Level
Provincial Academy
of Science
Science & Tech.
Commission
Provincial
Agricultural
Colleges &
Universities
Department
of Education
Research
Institutes
Provincial
Academy of
Ag. Sc.,
Fishery, etc
Department of
Agriculture
Provincial
Institutes
of Forestry
Department
of Forestry
Other
Provincial
Institutes
Other
Departments
Provincial Bureau
of Finance
Provincial
Governments
China’s agricultural R&D system:
Organization Chart for Agricultural Research
(Provincial and Prefecture level)
Provincial research centers account for:
41% of total research staff
51% of total budget
Prefecture Level
Prefecture
Academy of Science
Science & Tech.
Commission
Bureau of
Education
Prefecture Academy
of Agricultural
Sciences
Bureau of
Agriculture
Prefecture
Institues
of Forestry
Bureau of
Forestry
Other
Bureaus
Bureau of
Finance
Prefecture
Government
Prefecture research centers account for:
32% of research staff
34% of total budget
China’s public agricultural R&D System:
not only on basic research, but even more on the
development research Research system:
– Central government established agricultural research institutes
that covered most of agricultural products in the national wide
– Local government established agricultural research institutes
that covered nearly all agricultural products in the region
– There are 1237 agricultural research institutes and 88 agricultural
universities or technological academies that located in every
province or prefecture
– The research fields covered nearly all agricultural products
(Nominal are 109 products) in China
– 50 innovation product industries have been specially invested by
MOA since 2008
Number of agricultural R&D staff in 2004
101903
62624
25400 25400
23609
23144 10452
0
20000
40000
60000
80000
100000
120000
China-1 China-2 USA Japan USSR India W.Germany Brazil Mexico
Total staff
Active researchers
China has the largest public agricultural R&D System in the world
China’s research system: overstaffed
0.69
0.4
0.46
0.16 0.14 0.14 0.13
0.05
0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
China-1 China-2 USSR India W.Germany USA Mexico Japan Brazil
Number of Researchers / 1 million US$ of Agri GDP in 2004
0.7
16
56
37
6 8
38
9
37
5
0.3 0
10
20
30
40
50
60
Private sector’s share of agricultural research staff in early 1990s (%)
Source: Alston and Pardey (1995); Huang et al., 2003; Hu et al., 2008
China’s agricultural R&D System: public
dominated, but changes fast
Agricultural research investment intensity (%) in China
0.0
5.0
10.0
15.0
20.0
25.0
1991 1993 1995 1997 1999 2001 2003 2005 2007 2009
Annually growth15.9%
Government fiscal investment in agricultural research
(billion yuan in 2005 price)
Since 2000, the rise in research investment has been higher in China
than any other country in the world …
0.000
0.100
0.200
0.300
0.400
0.500
0.600
0.700
1991 1993 1995 1997 1999 2001 2003 2005 2007 2009
Investment in agri biotech research had been doubled in every 4 years before mid-2000s
0
200
400
600
800
1000
1200
1400
1600
1800
1986 1988 1990 1992 1994 1996 1998 2000 2002
Plant Agriculture
Huang et al., Science, 29 April 2005: 688-690
(million yuan
in 2003 price)
2003: 1.65 billion yuan = US$ 200 million or US$ 950
million in PPP
National
Transgenic
New Variety
Development
Program:
26 bil. yuan
(US$ 3.8 bil.)
in 2009-2020
103 101 106 104 101
98 93
88 83 84
79
0
20
40
60
80
100
120
1996 1998 2000 2002 2004 2006
Staff under government agricultural extension system in
China (100,000 persons)
74 74 74 74 74 71 70 68 65 64 63
0
20
40
60
80
100
120
1996 1998 2000 2002 2004 2006
Agricultural administrative villages (100,000)
China also has the largest public
agricultural extension system in the world
The government agricultural extension stations located in each
township, even in the most remote township in China. The system
make sure the new innovation can be adopted in time.
Summary
• China’s agricultural R&D system is:
– the largest R&D system in the world
– top-down government research system
– more development research than basic research
– public sector dominated
• Largest agricultural extension system to make
sure the agricultural innovation be adopted in
time
Challenges by late 1990s
• Public dominated, private sector is lacking: – Research program may not capture the most relevant and
immediate problems faced by farmers
– Weak links between generation and dissemination of technologies, between technologies available and farmers’ real demand for useful technologies
• Decentralization: decentralized with weak coordination among institutions (central vs local; local vs local…)
• Duplication: duplication of research efforts contributes to wastage of scarce research resources
• Overstaff: low salary, lack of incentive, loss of quality scientists
• Low human capacity
Agricultural research reform in
China
Stage I: Initial reform period (1985-98)
methods:
-- gradually commercializing research
Research grant:
-- gradually moving from formula based allocation
toward competitive grants
Changing sources of agricultural research investment
(million yuan in 1998 price), 1985-99
0
1000
2000
3000
4000
5000
6000
7000
1985 1987 1989 1991 1993 1995 1997 1999
Total income Government investment Commercial and Others
Stage II: A new push for radical reform Goals: to have a market-oriented, effective, creative,
and modernized agricultural research system
Strategies:
Researchers: Better scientists (keep 1/3)
Radical commercialization (2/3)
Investment: More investment
Improve efficiency (competitive grant)
Management: Incentive system reform
More market-oriented reform
Agricultural research reform
The government R&D investment increased at 15% annually
during 2000-2005
0
50
100
150
200
250
300
1991 1993 1995 1997 1999 2001 2003 2005 2007 2009
Agricultural Research Expenditure (million yuan in 2009 price), 1991-
2009
Annually growth13.1%
Annually growth 15.9%
Total income
Public investment
Source： Hu et al., 2007
Rising R&D expenditure, but most are competitive grants:
this is a new challenge.
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
2000 2004 2005 2006
0.72
1.75
2.27
2.99
0.03
0.1
0.17
0.26
Private agricultural R&D investment in China
(Billion RMB yuan, 2006 price)
Contracted out
In own firm
Source: Hu et al., 2008
Does the government investment remarkably contribute to the
rise of private sector’s R&D investment?
Investment in Agricultural R&D by Private Sector
Model 1 Model 2 Model 3 Model 4
Privatization:
No. of private agricultural firm 1.842*** (0.279)
1.799*** (0.279)
1.793*** (0.278)
1.748*** (0.277)
Firm age 165.5*** 168.2*** 165.4*** 168.1***
(29.39) (29.42) (29.05) (29.06)
Firm’s sale revenues 0.003*** 0.003*** 0.003*** 0.003***
(0.000) (0.000) (0.000) (0.000)
Private share (compared w/ State) 3.415 3.483 3.792 3.871
(3.22) (3.22) (3.18) (3.18)
Foreign share (compared w/ State) 0.212 0.325 0.785 0.916
(7.75) (7.76) (7.66) (7.66)
Publically traded company 7446*** 7443*** 7336*** 7330***
(856.7) (857.1) (847.0) (847.2)
Public R&D investment lagged 3 years:
of the total R&D -0.001*** -0.001***
(0.000) (0.000)
of public-R 0.017*** 0.018***
(0.005) (0.005)
of public-D -0.004*** -0.004***
(0.001) (0.001)
Government funding for private R&D 0.302*** 0.310***
(0.09) (0.09)
Ln (Private R&D)
Ln (Private R&D)
政府R&D投资 Public R&D Exp. -0.001***
-- 基础与应用Foundation+Application 0.017***
-- 开发投资 Development -0.004***
公司年龄 Years started company 165.5*** 168.2***
公司年销售额 Company’s annual revenue
0.003*** 0.003***
私人公司个数 Number of private companies
1.842*** 1.799***
Public-dominated R&D investment restrict the private investment
Concluding remarks
Agricultural research has been an engine of agricultural growth in China in the past.
With rising food demand in China, China’s leaders believe agricultural technology is major solution to improve the nation’s food security and have developed a national agricultural R&D system and also have tried to reform this system so that the technologies generated can be more response to farmers’ demand.
Concluding remarks
China has also invested significantly in R&D in the past, particular in recent years.
However, China’s agricultural research and extension are also facing great challenges, a public dominated system has its pros and cons.
The leaders are well aware of its cons and recently have tried to encourage private sector to join public sector in agricultural R&D system –---- if this is going to happen, it is expected a new era of China’s agricultural R&D will come…
Thanks