Rural developments versus agricultural Rural developments versus agricultural modernization in China: some preliminary modernization in China: some preliminary

thinkingthinking

Thomas M. H. ChanThomas M. H. ChanChina Business CentreChina Business CentreHong Kong Polytechnic Hong Kong Polytechnic University,University,Beijing, June 2007Beijing, June 2007

Industrialization and globalization creating Industrialization and globalization creating their own antithesistheir own antithesis

1. 1. Industrialization in the 20Industrialization in the 20thth Century had spread mass industrial production Century had spread mass industrial production with its inherent chase for technical & economic efficiency to the majority with its inherent chase for technical & economic efficiency to the majority areas in the world through economic deregulation, trade liberalization and areas in the world through economic deregulation, trade liberalization and outsourcing & offshoring;outsourcing & offshoring;

2. 2. Globalization since the 1970s through financialization of national and inter-Globalization since the 1970s through financialization of national and inter-national economic exchanges has facilitated the global industrialization national economic exchanges has facilitated the global industrialization resulting in global commodification & the rise of global value resulting in global commodification & the rise of global value chains/systems both extensively and intensively for industries, services and chains/systems both extensively and intensively for industries, services and agriculture.agriculture.

3. 3. Mass production with ever improving technical & economic efficiency & Mass production with ever improving technical & economic efficiency & productivity has created over-supplies of cheap (at the lowest production productivity has created over-supplies of cheap (at the lowest production costs), standardized products for a world population of increasing costs), standardized products for a world population of increasing improvisation as wage labour (in whatever branches of productive improvisation as wage labour (in whatever branches of productive economy) economy)

– – profit squeeze (ever intensifying competition that obliges producers to profit squeeze (ever intensifying competition that obliges producers to find innovations in production/technology and breaks in institutional find innovations in production/technology and breaks in institutional regulations) and regulations) and

- political reaction from producers (competing for governance controls - political reaction from producers (competing for governance controls over the global value system, or for alternative modes of production) and over the global value system, or for alternative modes of production) and consumers (exercise of choice in purchasing – shifting fashion & consumers (exercise of choice in purchasing – shifting fashion & personalized consumption (not complying with imposing product personalized consumption (not complying with imposing product standardization), demand for quality products & willing to pay higher standardization), demand for quality products & willing to pay higher prices, concerns more for food safety & other non-product factors prices, concerns more for food safety & other non-product factors (ecological & cultural/local conservation, animal welfare, etc.)(ecological & cultural/local conservation, animal welfare, etc.)

Global responsesGlobal responses

1. 1. Socialism & other forms of post-colonial revolution– disengagement from Socialism & other forms of post-colonial revolution– disengagement from the global value chain/systems and thus the short-circuiting of the the global value chain/systems and thus the short-circuiting of the industrialization and globalization logics – transforming them into national industrialization and globalization logics – transforming them into national value chain/systems.value chain/systems.

2. 2. Toyotaism, Italian industrial districts, and other forms of post-Fordism in Toyotaism, Italian industrial districts, and other forms of post-Fordism in industrial production mostly after 1970s – modifying the logic of industrial production mostly after 1970s – modifying the logic of industrialization (with mass customization and even in combination with industrialization (with mass customization and even in combination with some elements of artisanal production).some elements of artisanal production).

3. 3. A new rural development paradigm that goes beyond agriculture since the A new rural development paradigm that goes beyond agriculture since the 1990s – alternative food networks (organic food, local/localized food 1990s – alternative food networks (organic food, local/localized food system, various types of short food (supply) chains, system, various types of short food (supply) chains, multi-functionality/pluri-activity of agriculture, fair trade in food products, multi-functionality/pluri-activity of agriculture, fair trade in food products, etc.)etc.)

Shift in European agricultural policy – setting Shift in European agricultural policy – setting the trend?the trend?

From productivist to post-productivist paradigm from the late 1990s:From productivist to post-productivist paradigm from the late 1990s:

1. 1. Original purposes of the post-war Common Agricultural PolicyOriginal purposes of the post-war Common Agricultural Policy – – financial financial subsidies to expand production plus support for processing and marketing subsidies to expand production plus support for processing and marketing to help integration of the food chain. A first territorial element was added in to help integration of the food chain. A first territorial element was added in the 1970s to designate less favourable areas eligible for special measures.the 1970s to designate less favourable areas eligible for special measures.

2.2. Agenda 2000 (approved in 1999) – add a 2Agenda 2000 (approved in 1999) – add a 2ndnd pillar of rural development (- pillar of rural development (- to support agriculture as a provider of public goods in its environmental to support agriculture as a provider of public goods in its environmental and rural functions and rural areas in their development) to the CAP to and rural functions and rural areas in their development) to the CAP to accompany the further reform of the market policy (the 1accompany the further reform of the market policy (the 1stst pillar – pillar – providing a basic income support to farmers who are free to produce in providing a basic income support to farmers who are free to produce in response to market demand). iresponse to market demand). i

Reform of the Common Agriculture Policy of the EUReform of the Common Agriculture Policy of the EU

Source: EU Director-General for Agriculture and Rural Development, Source: EU Director-General for Agriculture and Rural Development, EU Rural Development Policy 2007-2013,EU Rural Development Policy 2007-2013, Fact Sheet, Luxemburg, 2006, p.5. Fact Sheet, Luxemburg, 2006, p.5.

3.3. CAP reform in 2003 for implementation after 2005 – transfer of funds from CAP reform in 2003 for implementation after 2005 – transfer of funds from the 1the 1stst pillar to the 2 pillar to the 2ndnd – a strengthening of rural development policy via the – a strengthening of rural development policy via the introduction of new measures (to promote quality & animal welfare, and introduction of new measures (to promote quality & animal welfare, and help for farmers to meet new EU standards) and a provision of more EU help for farmers to meet new EU standards) and a provision of more EU money for rural development through a reduction in direct payments for money for rural development through a reduction in direct payments for bigger firms.bigger firms.(1)(1)

4. 4. New rural policy set in 2005 for 2007-2013 New rural policy set in 2005 for 2007-2013 - improving the competitiveness of agriculture and forestry;- improving the competitiveness of agriculture and forestry;- supporting land management and improving the environment; and - supporting land management and improving the environment; and - improving the quality of life and encouraging diversification of economic - improving the quality of life and encouraging diversification of economic activities.activities.- building local capacity for employment and diversification- building local capacity for employment and diversification

(1)(1) For the 1For the 1stst pillar subsidies has been replaced by the Single Farm Payments, which do not require farm outputs or even specific pillar subsidies has been replaced by the Single Farm Payments, which do not require farm outputs or even specific farm input use. But it is said that funds for the 2farm input use. But it is said that funds for the 2ndnd pillar is limited Funds for SFPs and remaining 1 pillar is limited Funds for SFPs and remaining 1 stst pillar payments would be pillar payments would be 43 billion Euro from 2007 -2013 versus 14 billion for the 243 billion Euro from 2007 -2013 versus 14 billion for the 2ndnd pillar plus LEADER scheme. Kenneth J. Thomson, pillar plus LEADER scheme. Kenneth J. Thomson, Agricultural Agricultural multifunctionality and EU policies: some cautious remarksmultifunctionality and EU policies: some cautious remarks , presentation at European Network of Agricultural and Rural Policy , presentation at European Network of Agricultural and Rural Policy Research Institutes seminar, Andros, Greece, 1 October 2004.Research Institutes seminar, Andros, Greece, 1 October 2004.

New rural policy for EUNew rural policy for EU

Source: EU Director-General for Agriculture and Rural Development, Source: EU Director-General for Agriculture and Rural Development, EU Rural Development Policy 2007-2013,EU Rural Development Policy 2007-2013, Fact Sheet, Luxemburg, 2006, p.7. Fact Sheet, Luxemburg, 2006, p.7.

Leading by the EU, the OECD has also begun to adopt a new rural paradigm in Leading by the EU, the OECD has also begun to adopt a new rural paradigm in place of the old industrialization and modernization approach in the 2000splace of the old industrialization and modernization approach in the 2000s

Source: Source: OECDOECD, , The New Rural Paradigm: Policies and GovernanceThe New Rural Paradigm: Policies and Governance , June 2006, June 2006

Different mechanism for extending short food Different mechanism for extending short food supply chains in time and spacesupply chains in time and space

Source: H. Renting, T.K. Marsden & J. Banks, Understanding alternative food networks: exploring the role of short Source: H. Renting, T.K. Marsden & J. Banks, Understanding alternative food networks: exploring the role of short food supply chains in rural development, food supply chains in rural development, Environment and Planning AEnvironment and Planning A, vol. 35 (2003), pp.393-411, (p.399, figure 2), vol. 35 (2003), pp.393-411, (p.399, figure 2)

Face-to-face SFSCsFace-to-face SFSCs Proximate SFSCsProximate SFSCs Extended SFSCsExtended SFSCs

Farm shopsFarm shops

Farmers marketsFarmers markets

Roadside salesRoadside sales

Pick your ownPick your own

Box schemesBox schemes

Home deliveriesHome deliveries

Mail orderMail order

E-commerceE-commerce

Farm shorp groupsFarm shorp groups

Regional hallmarksRegional hallmarks

Consumer cooperativesConsumer cooperatives

Community supported agricultureCommunity supported agriculture

Thematic routes (articulation in space)Thematic routes (articulation in space)

Special events, fairs (articulation in time)Special events, fairs (articulation in time)

Local shops, restaurants, tourist enterprisesLocal shops, restaurants, tourist enterprises

Dedicated retailers (e.g. whole food, Dedicated retailers (e.g. whole food, specialty, dietetic shops)specialty, dietetic shops)

Catering for institutions (canteens, Catering for institutions (canteens, schools)schools)

Sales to emigrants Sales to emigrants

Certification Certification labelslabels

Production codesProduction codes

Reputation effectsReputation effects

Different quality definitions & conventions Different quality definitions & conventions employed within short food supply chainsemployed within short food supply chains

Source: H. Renting, T.K. Marsden & J. Banks, Understanding alternative food networks: exploring the role of short food Source: H. Renting, T.K. Marsden & J. Banks, Understanding alternative food networks: exploring the role of short food supply chains in rural development, supply chains in rural development, Environment and Planning AEnvironment and Planning A, vol. 35 (2003), pp.393-411, (p.401, figure 3), vol. 35 (2003), pp.393-411, (p.401, figure 3)

Regional/artisanal characteristics Regional/artisanal characteristics paramount (link with place of paramount (link with place of production or producer)production or producer)

hybridshybrids

Ecological/natural Ecological/natural characteristics paramount characteristics paramount (link with bioprocesses)(link with bioprocesses)

Designation of origin (e.g. Designation of origin (e.g. protected domination of origin, protected domination of origin, protected geographical indication)protected geographical indication)

Farm or cottage foodsFarm or cottage foods

Typical, specialtyTypical, specialty

On-farm processedOn-farm processed

TraditionalTraditional

Fair trade Fair trade

Organic Organic

IntegratedIntegrated

Natural Natural

Healthy, safeHealthy, safe

Free rangeFree range

GMO freeGMO free

Scale of alternative food system in EuropeScale of alternative food system in Europe

1. 1. A 1998 market survey data indicate that organic products, including imports, A 1998 market survey data indicate that organic products, including imports, account fro less than 2% of total food sales in the EU, with projections of 6~7% account fro less than 2% of total food sales in the EU, with projections of 6~7% by 2005. by 2005. (1)(1)

2.2. A 1998 study of the socioeconomic impact of short food supply chain in EU 15 A 1998 study of the socioeconomic impact of short food supply chain in EU 15 show: show:

- German, Italy, France – organic farming, quality production & direct selling add - German, Italy, France – organic farming, quality production & direct selling add 7~10% to the total net value added realized in agriculture;7~10% to the total net value added realized in agriculture;- The Netherlands, UK & Spain – 2~4%; - The Netherlands, UK & Spain – 2~4%; - Ireland – less than 1%;- Ireland – less than 1%;- Italy – total net value added (including primary production) of SFSC at 29% of - Italy – total net value added (including primary production) of SFSC at 29% of total NVA of the agricultural sector.total NVA of the agricultural sector. (2)(2)

(1) (1) Quoted in David Goodman, Rural Europe Redux? Reflections on alternative agro-food networks and paradigm change, Quoted in David Goodman, Rural Europe Redux? Reflections on alternative agro-food networks and paradigm change, Sociologia Ruralis, 44:1 (January 2004), pp.3-16, (p.13)Sociologia Ruralis, 44:1 (January 2004), pp.3-16, (p.13)

(2) (2) Quoted in H. Renting, T.K. Marsden & J. Banks, Understanding alternative food networks: exploring the role of short food Quoted in H. Renting, T.K. Marsden & J. Banks, Understanding alternative food networks: exploring the role of short food supply chains in rural development, supply chains in rural development, Environment and Planning AEnvironment and Planning A, vol. 35 (2003), pp.393-411, (p.407), vol. 35 (2003), pp.393-411, (p.407)

Some projections/agrumentsSome projections/agruments

1.1. Because of uneven spatial and temporal intensity, there is the possibility of Because of uneven spatial and temporal intensity, there is the possibility of change that may not engender convergence, but rather accentuate existing change that may not engender convergence, but rather accentuate existing dualism, as between highly intensive industrial agriculture in East Anglia dualism, as between highly intensive industrial agriculture in East Anglia and the Paris Basin, for example, and other rural areas of more regionally-and the Paris Basin, for example, and other rural areas of more regionally-embedded, multi-functional agriculture.embedded, multi-functional agriculture.

2. 2. At least, it might create ‘new spaces of possibility’ for farm reproduction At least, it might create ‘new spaces of possibility’ for farm reproduction and rural livelihoods, building on the heterogeneity and polyvalence that and rural livelihoods, building on the heterogeneity and polyvalence that are such distinctive features of contemporary European food practices. are such distinctive features of contemporary European food practices. (David (David Goodman, Rural Europe Redux? Reflections on alternative agro-food networks and paradigm change, Sociologia Ruralis, Goodman, Rural Europe Redux? Reflections on alternative agro-food networks and paradigm change, Sociologia Ruralis, 44:1 (January 2004), pp.3-16)44:1 (January 2004), pp.3-16)

3. 3. Rural development has created an important, if not decisive, Rural development has created an important, if not decisive, line of defenseline of defense for European agriculture against the vagaries and growing instability of for European agriculture against the vagaries and growing instability of globalized commodity markets. The creation of this defense line is, in globalized commodity markets. The creation of this defense line is, in practice, identical to the transformation of agriculture towards new, practice, identical to the transformation of agriculture towards new, multifunctional constellations. multifunctional constellations. (Jan Douwe wan der Ploeg & Henk Renting, Behind the ‘Redux’: a (Jan Douwe wan der Ploeg & Henk Renting, Behind the ‘Redux’: a rejoinder to David Goodman, rejoinder to David Goodman, Sociologia RuralisSociologia Ruralis, 44:2 (April 2004), pp. 233-242, (0.235), 44:2 (April 2004), pp. 233-242, (0.235)

The Chinese experience from 1949The Chinese experience from 1949

1. 1. Collectivization under a national redistributive system of planning controls Collectivization under a national redistributive system of planning controls since the mid 1950s – forced industrialization of agriculture to increase since the mid 1950s – forced industrialization of agriculture to increase scale and technical/economic efficiency but with expropriation of scale and technical/economic efficiency but with expropriation of agricultural surplus by and for the urban and industrial sector (socialist agricultural surplus by and for the urban and industrial sector (socialist primitive accumulation or the usual capitalist urban and industry biased primitive accumulation or the usual capitalist urban and industry biased economic development strategy?)economic development strategy?)

2. 2. Decollectivization reform from 1979 – restoration of the peasant economy Decollectivization reform from 1979 – restoration of the peasant economy (minus private land ownership and the inevitable land concentration that (minus private land ownership and the inevitable land concentration that devastate & destabilize rural economy) with a gradual relaxation of state devastate & destabilize rural economy) with a gradual relaxation of state redistributive planning controls over sales of food grains and other major redistributive planning controls over sales of food grains and other major agricultural products (market liberalization in the trade of agricultural agricultural products (market liberalization in the trade of agricultural products has not yet completed while an increasing domination of products has not yet completed while an increasing domination of distribution by urban corporations has already begun)distribution by urban corporations has already begun)

3. 3. National food security. Several factors like the bitter experiences of over a National food security. Several factors like the bitter experiences of over a century of wars, the large population increase (a consequence of political, century of wars, the large population increase (a consequence of political, economic and social stability), and the desire to attain a high degree of self economic and social stability), and the desire to attain a high degree of self sufficiency (for surplus transfer and for food security) have led the state sufficiency (for surplus transfer and for food security) have led the state agricultural policy to put high priority on production increase by agricultural policy to put high priority on production increase by expanding cultivated land and raising yield. Quantity increase has taken expanding cultivated land and raising yield. Quantity increase has taken precedence over other considerations, including even the welfare of precedence over other considerations, including even the welfare of peasant families, ecological and cultural preservation. The fall in cultivated peasant families, ecological and cultural preservation. The fall in cultivated land since the mid 1990s due to urbanization and industrialization has put land since the mid 1990s due to urbanization and industrialization has put further emphasis on productivity enhanced production increase. further emphasis on productivity enhanced production increase. Nevertheless, in the 1990s China has achieved self sufficiency in food Nevertheless, in the 1990s China has achieved self sufficiency in food supplies at a high level of calorie intake for its population, but which is supplies at a high level of calorie intake for its population, but which is also founded upon ever increasing inputs of chemical fertilizers, also founded upon ever increasing inputs of chemical fertilizers, insecticides, use of water, etc. with heavy burden on land and ecology.insecticides, use of water, etc. with heavy burden on land and ecology.

4. 4. Rural development in terms of per capita incomes growth of peasant Rural development in terms of per capita incomes growth of peasant families has been lagging behind urban development. To overcome this families has been lagging behind urban development. To overcome this gap, the state has resorted to rural industrialization, further aggravating gap, the state has resorted to rural industrialization, further aggravating ecological problems by industrial pollution especially with lax ecological problems by industrial pollution especially with lax environmental regulations, and individual peasant families have relied on environmental regulations, and individual peasant families have relied on off farm employment, especially as migrant workers in urban industries off farm employment, especially as migrant workers in urban industries and services (with migrant workers reaching over 100 million). and services (with migrant workers reaching over 100 million).

Food grain production in ChinaFood grain production in China

Source: Source: Chinese Statistics YearbookChinese Statistics Yearbook, 2006, 2006

yearyear Grain production Grain production

in 10,000 tonsin 10,000 tons

Per capita grain production Per capita grain production

in kg.in kg.

19801980 32,055.532,055.5 326.7326.7

19851985 37,910.837,910.8 360.7360.7

19901990 44,624.344,624.3 393.1393.1

19951995 46,661.846,661.8 387.3387.3

20002000 46,217.546,217.5 366.0366.0

20052005 48,402.248,402.2 371.3371.3

International trade in food grainInternational trade in food grain

Source: Chinese Ministry of Agriculture, Source: Chinese Ministry of Agriculture, China Agricultural Development ReportChina Agricultural Development Report , Beijing, 2006, p.145, Table 18., Beijing, 2006, p.145, Table 18.

Trade surplus/deficit Trade surplus/deficit (10,000 tons)(10,000 tons)

Trade gap/domestic Trade gap/domestic productionproduction

19901990 - 789- 789 1.8%1.8%

19951995 - 1967- 1967 4.2%4.2%

20002000 + 44.5+ 44.5 insignificantinsignificant

20052005 - 2227.5- 2227.5 4.6%4.6%

Agricultural production (in 10,000 tons)Agricultural production (in 10,000 tons)

Source: Source: Chinese Ministry of Agriculture, Chinese Ministry of Agriculture, China Agricultural Development ReportChina Agricultural Development Report , Beijing, 2006, p.139, Table 12., Beijing, 2006, p.139, Table 12.

Meat Meat Poultry & Poultry & eggseggs

Dairy Dairy productsproducts

Sea & fresh Sea & fresh water foodwater food

Fruits Fruits

19901990 28572857 795795 475475 12371237 18741874

19951995 52605260 16771677 673673 25172517 42154215

20002000 61256125 22432243 919919 42794279 62256225

20052005 77437743 28792879 28652865 51065106 1612016120

Agricultural land (1,000 hectares)Agricultural land (1,000 hectares)

Source: Chinese Ministry of Agriculture, Source: Chinese Ministry of Agriculture, China Agricultural Development ReportChina Agricultural Development Report , Beijing, 2006, , Beijing, 2006, p.134, Table 7.p.134, Table 7.

All farmlandAll farmland For food grainFor food grain For vegetablesFor vegetables For fruitsFor fruits

19901990 148,362148,362 113,466113,466 6,3386,338 5,1795,179

19951995 149,879149,879 110,060110,060 10,61610,616 8,0988,098

20002000 156,300156,300 108,463108,463 15,23715,237 8,9328,932

20052005 155,488155,488 104,278104,278 17,72117,721 10,03510,035

Use of chemical fertilizers & insecticide in Use of chemical fertilizers & insecticide in China’s agriculture (in 10,000 tons)China’s agriculture (in 10,000 tons)

Source: Chinese Ministry of Agriculture, Source: Chinese Ministry of Agriculture, China Agricultural Development ReportChina Agricultural Development Report , Beijing, 2006, p.131, , Beijing, 2006, p.131, Table 4.Table 4.

Chemical Chemical fertilizersfertilizers

Per hectare of Per hectare of farmland (tons)farmland (tons)

Insecticides Insecticides Per hectare of Per hectare of farmland (tons)farmland (tons)

19901990 2590.32590.3 174.7174.7 n/an/a n/an/a

19951995 3593.73593.7 240.4240.4 108.7108.7 7.27.2

20002000 4146.44146.4 265.3265.3 128.0128.0 8.28.2

20052005 4766.24766.2 306.5306.5 146.0146.0 9.49.4

Demand for food in China in the 2000sDemand for food in China in the 2000s

1.1. With rising living standard and especially the improvement in calorie With rising living standard and especially the improvement in calorie intake and food composition, the demand for agricultural products in China intake and food composition, the demand for agricultural products in China has experienced a structural transformation:has experienced a structural transformation:- a decline in food grain consumption (almost half in 15 years by 2005 for - a decline in food grain consumption (almost half in 15 years by 2005 for urban residents & decline began in 2000 with a drop of 20% in 5 years for urban residents & decline began in 2000 with a drop of 20% in 5 years for rural residents)rural residents)- stabilization of meat consumption (but with a large increase in poultry & - stabilization of meat consumption (but with a large increase in poultry & egg consumption) in the urban sector since the late 1980s and fast increase egg consumption) in the urban sector since the late 1980s and fast increase for rural residents since the late 1990s (meat consumption in the rural for rural residents since the late 1990s (meat consumption in the rural sector is about ¾ of urban consumption in 2005)sector is about ¾ of urban consumption in 2005)- acceleration in the demand for seafood and fruits, but a negative growth - acceleration in the demand for seafood and fruits, but a negative growth for vegetables.for vegetables.

2. 2. Spending on food in consumption expenditures has declined to less than Spending on food in consumption expenditures has declined to less than 20% for urban families and 45.5% for rural families in 2005.20% for urban families and 45.5% for rural families in 2005.

Food consumption in China and other countries, 2002Food consumption in China and other countries, 2002

Source: FAO, quoted in Ivan Roberts & Neil Andrews, Source: FAO, quoted in Ivan Roberts & Neil Andrews, Developments in Chinese AgricultureDevelopments in Chinese Agriculture, ABARE, eReport, July 2005, p.5, Table 2., ABARE, eReport, July 2005, p.5, Table 2.

ChinaChina S. KoreaS. Korea JapanJapan ThailandThailand USAUSA

Calorie/day/personCalorie/day/person

VegetableVegetable 23332333 25872587 21872187 21722172 27272727

AnimalAnimal 618618 478478 572572 295295 10471047

totaltotal 29512951 30583058 27612761 24672467 37743774

Consumption/person/year (kg)Consumption/person/year (kg)

CerealsCereals 166.6166.6 151.7151.7 113.8113.8 122.3122.3 112.5112.5

Starchy rootsStarchy roots 80.780.7 17.217.2 34.134.1 18.018.0 63.763.7

Vegetable oilsVegetable oils 9.59.5 12.312.3 14.114.1 6.36.3 27.827.8

FruitsFruits 47.347.3 66.866.8 56.356.3 87.887.8 110.3110.3

VegetablesVegetables 254.1254.1 209.2209.2 106.5106.5 42.142.1 127.7127.7

SugarSugar 7.27.2 19.219.2 19.319.3 31.931.9 32.932.9

Meat Meat 52.552.5 49.249.2 43.943.9 26.426.4 124.1124.1

MilkMilk 13.313.3 29.429.4 67.167.1 18.818.8 261.3261.3

fishfish 25.625.6 58.758.7 66.366.3 30.930.9 21.321.3

Food consumption in China (kg/person)Food consumption in China (kg/person)

Source: Chinese Ministry of Agriculture, Source: Chinese Ministry of Agriculture, China Agricultural Development ReportChina Agricultural Development Report , Beijing, 2006, p.151, Table 24. , Beijing, 2006, p.151, Table 24.

Food grainFood grain Vegetables Vegetables Meat Meat Poultry Poultry Fish & seafoodFish & seafood

urbanurban ruralrural urbanurban ruralrural urbanurban ruralrural urbanurban ruralrural urbanurban ruralrural

19901990 263.1263.1 130.7130.7 134.0134.0 138.7138.7 11.311.3 21.721.7 1.31.3 3.43.4 2.12.1 7.77.7

19951995 260.1260.1 97.097.0 104.6104.6 118.6118.6 11.311.3 19.719.7 1.81.8 4.04.0 3.43.4 9.29.2

20002000 249.5249.5 82.382.3 112.0112.0 114.7114.7 14.614.6 20.120.1 2.92.9 7.47.4 3.93.9 11.711.7

20052005 208.8208.8 77.077.0 102.3102.3 118.6118.6 17.117.1 23.923.9 3.73.7 9.09.0 4.94.9 12.612.6

Challenges for China’s rural development Challenges for China’s rural development in the 21in the 21stst Century Century

1. 1. How to internalize external costs of industrialized agricultural How to internalize external costs of industrialized agricultural productionproduction (e.g. agriculture-related pollution especially through intensive use of (e.g. agriculture-related pollution especially through intensive use of chemical inputs– air, water, solid wastes, & impact on biodiversity, chemical inputs– air, water, solid wastes, & impact on biodiversity, deterioration in product quality because of standardization & excessive deterioration in product quality because of standardization & excessive priority on quantity increase, problems of food safety & its consequence priority on quantity increase, problems of food safety & its consequence for public health, rapid increase in energy consumption, etc. – agricultural for public health, rapid increase in energy consumption, etc. – agricultural pollution in some coastal areas has exceeded industrial pollution; wastes pollution in some coastal areas has exceeded industrial pollution; wastes from rural enterprises has exceeded 50% of total industrial wastes of the from rural enterprises has exceeded 50% of total industrial wastes of the nation; 120 million tons of rubbish & 25 million tons of waste water from nation; 120 million tons of rubbish & 25 million tons of waste water from rural households per year totally untreated );rural households per year totally untreated );

2. 2. How to raise peasant incomes and revitalize rural economy with a How to raise peasant incomes and revitalize rural economy with a better chance of sustainabilitybetter chance of sustainability (governance issue and thus competition over value added created in (governance issue and thus competition over value added created in increasingly extensive & globalized food supply chains, public finance increasingly extensive & globalized food supply chains, public finance issue - equal provision of public infrastructural facilities, services and other issue - equal provision of public infrastructural facilities, services and other public & semi public goods); and public & semi public goods); and

3. 3. How to achieve/maintain social stability, ecological balance and cultural How to achieve/maintain social stability, ecological balance and cultural continuity of rural communities (ageing – natural & out-migration of the young, & continuity of rural communities (ageing – natural & out-migration of the young, & family problems from migrant workers’ families)family problems from migrant workers’ families)

Employment composition per average village of a study of 2749 villages in 2005Employment composition per average village of a study of 2749 villages in 2005

Tot. local Tot. local labour labour

Outside Outside employmentemployment

Local Local farmingfarming

Local non-Local non-farm workfarm work

Non-local Non-local workersworkers

NationalNational 1081 (100%)1081 (100%) 260 (26.5%)260 (26.5%) 548 (52.1%)548 (52.1%) 278 (21%)278 (21%) 273 (18%)273 (18%)

Eastern Eastern 1226 (100%)1226 (100%) 246 (22%)246 (22%) 481 (44.6%)481 (44.6%) 507 (34.7%)507 (34.7%) 491 (30.9%)491 (30.9%)

CentralCentral 768 (100%)768 (100%) 223 (31%)223 (31%) 472 (54.5%)472 (54.5%) 75 (10.4%)75 (10.4%) 30 (4.4%)30 (4.4%)

WesternWestern 1150 (100%)1150 (100%) 322 (29.4%)322 (29.4%) 737 (61.9%)737 (61.9%) 93 (8.6%)93 (8.6%) 60(4.8%)60(4.8%)

Collection of Research Reports of the State Council Development Research CentreCollection of Research Reports of the State Council Development Research Centre , 2007, , 2007, Beijing, p. 230, Table 1.Beijing, p. 230, Table 1.

Shift in Chinese agricultural policy after 2005Shift in Chinese agricultural policy after 2005

1. 1. Direct reaction to rural development crisis of the late 1990s (continuous Direct reaction to rural development crisis of the late 1990s (continuous decline in rural incomes from 1997 – 2000 amidst a long-term decline in decline in rural incomes from 1997 – 2000 amidst a long-term decline in relative growth of the rural sector versus the urban sector since 1985) & relative growth of the rural sector versus the urban sector since 1985) & the challenges of WTO liberalization of imports of agricultural products the challenges of WTO liberalization of imports of agricultural products after 2003 –after 2003 –

a) a new priority of national policy (with increases in budgetary spending) a) a new priority of national policy (with increases in budgetary spending) on peasants, agriculture & rural villages in 2002;on peasants, agriculture & rural villages in 2002;

b) No. 1 Central Policy Document in every year since 2003 for more b) No. 1 Central Policy Document in every year since 2003 for more aggressive agricultural policy but up to 2005 focusing on conventional aggressive agricultural policy but up to 2005 focusing on conventional development strategy of intensive, industrialized agriculture for higher development strategy of intensive, industrialized agriculture for higher output increase for raising rural incomes plus some new measures of tax output increase for raising rural incomes plus some new measures of tax reduction, grain production subsidies & protection of welfare of migrant reduction, grain production subsidies & protection of welfare of migrant workers in the urban sector – not yet any qualitative change in policy.workers in the urban sector – not yet any qualitative change in policy.

2. 2. New initiatives after October 2005 that introduced the 11New initiatives after October 2005 that introduced the 11 thth Five-year Five-year Programme:Programme:

a) the no. 1 central policy document of 2006: a) the no. 1 central policy document of 2006: - a broader conception of rural development including agriculture, rural - a broader conception of rural development including agriculture, rural enterprises (labour intensive manufacturing & services), and migrant enterprises (labour intensive manufacturing & services), and migrant workers on one hand, and government sponsored & financed development workers on one hand, and government sponsored & financed development of rural infrastructure (farming, ecological & everyday life infrastructural of rural infrastructure (farming, ecological & everyday life infrastructural facilities, village planning & governance of human settlement facilities, village planning & governance of human settlement environment), and rural public goods (education, training, culture, health, environment), and rural public goods (education, training, culture, health, social welfare & civic morale);social welfare & civic morale);- a new production strategy/regime of high production, high quality, high - a new production strategy/regime of high production, high quality, high efficiency, ecological balanced & safety by structural optimization of efficiency, ecological balanced & safety by structural optimization of agriculture, promotion of specialty agriculture, green food & ecological agriculture, promotion of specialty agriculture, green food & ecological farming, maintenance of famous brand-names of agricultural products & a farming, maintenance of famous brand-names of agricultural products & a healthy husbandry;healthy husbandry;- a new ecological approach of recycling & resource-saving farming - a new ecological approach of recycling & resource-saving farming (saving of land, water, fertilizers, seeds & insecticides), using energy (saving of land, water, fertilizers, seeds & insecticides), using energy saving equipment & machinery and raising input-output efficiency and with saving equipment & machinery and raising input-output efficiency and with a stepped efforts against agricultural pollution.a stepped efforts against agricultural pollution.

b) b) the no. 1 central policy document of 2007the no. 1 central policy document of 2007

- direct state financial subsidies for agriculture to be established and - direct state financial subsidies for agriculture to be established and increased;increased;

- promote the development of specialized cooperatives of peasants;- promote the development of specialized cooperatives of peasants;

- develop rural clean energy with extension to all types of rural waste - develop rural clean energy with extension to all types of rural waste treatment;treatment;

- raise sustainability capability of agriculture including organic farming, - raise sustainability capability of agriculture including organic farming, ecological farming, recycling agriculture and covers policy areas of rural ecological farming, recycling agriculture and covers policy areas of rural environmental protection, and treatments of agricultural pollution and water environmental protection, and treatments of agricultural pollution and water pollution in streams, rivers, lakes, and sea;pollution in streams, rivers, lakes, and sea;

- develop multifunctions of agriculture including safe & healthy husbandry - develop multifunctions of agriculture including safe & healthy husbandry & poultry farming (with labeling and traceability systems), specialty & poultry farming (with labeling and traceability systems), specialty agriculture, garden farming, agro-tourism, bio-energy & bio-products, agriculture, garden farming, agro-tourism, bio-energy & bio-products, product safety & quality standard system (certification, geographical product safety & quality standard system (certification, geographical indication, labeling & traceability procedures, etc.)indication, labeling & traceability procedures, etc.)

c. c. A new conception of food safety & standards proposed by President Hu in A new conception of food safety & standards proposed by President Hu in late April 2007 – ‘from farm to dining table’ whole-process quality control late April 2007 – ‘from farm to dining table’ whole-process quality control and monitoring of food chain, which seems to follow the same policy of the and monitoring of food chain, which seems to follow the same policy of the EU (EU (From Farm to Fork: Safe Food for Europe’s ConsumersFrom Farm to Fork: Safe Food for Europe’s Consumers, Directorate-, Directorate-General for Communication, European Commission, 2005General for Communication, European Commission, 2005) and has the ) and has the possibility of moving towards a more integrative policy perspective of possibility of moving towards a more integrative policy perspective of agriculture, food safety & regulations, environmental preservation and agriculture, food safety & regulations, environmental preservation and conservation, and public health (ecological public health) conservation, and public health (ecological public health) (1)(1)

(1) Tin Lang, David Barling & Martin Caraher, Food, social policy and the environment: towards a new (1) Tin Lang, David Barling & Martin Caraher, Food, social policy and the environment: towards a new

model, model, Social Policy and AdministrationSocial Policy and Administration , 35:5 (Dec. 2001), pp.538-558; , 35:5 (Dec. 2001), pp.538-558; Tim Lang and Geof Rayner, Food Tim Lang and Geof Rayner, Food and Health Strategy with UK: A policy impact analysis, and Health Strategy with UK: A policy impact analysis, The Political QuarterlyThe Political Quarterly, 2003, pp.66-75; Tim Lang, , 2003, pp.66-75; Tim Lang, Food control or food democracy? Re-engaging nutrition with society and the environment, Food control or food democracy? Re-engaging nutrition with society and the environment, Public Health Public Health NutritionNutrition, 8(6A), 2005 and Overcoming public cacophony on obesity: an ecological public health , 8(6A), 2005 and Overcoming public cacophony on obesity: an ecological public health framework for policy markers, framework for policy markers, Obesity ReviewObesity Review, 8 (suppl. 1), 2007, pp.165-181, 8 (suppl. 1), 2007, pp.165-181 。 。

The future of conflicting or complementary The future of conflicting or complementary dualism for China’s agriculture?dualism for China’s agriculture?

1. 1. Would Chinese people change their diet from a catching up with the meat & dairy Would Chinese people change their diet from a catching up with the meat & dairy product-dominated diet of developed countries of USA & Western Europe to return product-dominated diet of developed countries of USA & Western Europe to return to a much healthier traditional food of better quality & nutrition?to a much healthier traditional food of better quality & nutrition?

If so, China would continue the conventional strategy of intensive, industrial If so, China would continue the conventional strategy of intensive, industrial agriculture to increase grain imports and suffer an ever increasing deficit in grain agriculture to increase grain imports and suffer an ever increasing deficit in grain trade. It would also repeat all problems of rural deprivation, quality deterioration, trade. It would also repeat all problems of rural deprivation, quality deterioration, and public health issues of food safety associated with global food supply chain. and public health issues of food safety associated with global food supply chain. Agricultural & rural pollution would accelerated. All these would come at a much Agricultural & rural pollution would accelerated. All these would come at a much larger scale than most developed countries because of the scale of population & larger scale than most developed countries because of the scale of population & economy of China.economy of China.

2. 2. Would the alternative food system introduced as new measures in the current Would the alternative food system introduced as new measures in the current central policy be able to develop in China in competition with the global food central policy be able to develop in China in competition with the global food supply chains and the industrial agriculture logic embraced by the Chinese supply chains and the industrial agriculture logic embraced by the Chinese bureaucracy to achieve a dualism, or be incorporated as supplementary to the bureaucracy to achieve a dualism, or be incorporated as supplementary to the conventional system? conventional system?

Agricultural & non-agricultural labour in Agricultural & non-agricultural labour in China’s rural sector China’s rural sector ( in 10,000 persons)( in 10,000 persons)

Source: Chinese Ministry of Agriculture, Source: Chinese Ministry of Agriculture, China Agricultural Development ReportChina Agricultural Development Report , Beijing, 2006, p.129, Table 2., Beijing, 2006, p.129, Table 2.

Rural Rural populationpopulation

% in % in national national

populationpopulation

Agricultural Agricultural labourlabour

% of rural % of rural populationpopulation

Non-Non-agricultural agricultural

labourlabour

19901990 89,59089,590 78.4%78.4% 33,33633,336 79.4%79.4% 8,6738,673

19951995 91,67591,675 75.7%75.7% 32,33532,335 71.8%71.8% 12,70712,707

20002000 92,82092,820 73.3%73.3% 32,98832,988 68.4%68.4% 15,16515,165

20052005 94,90794,907 72.6%72.6% 29,97629,976 59.4%59.4% 20,41220,412

Composition of peasant per capita income, 2005Composition of peasant per capita income, 2005

Source: 69,000 peasant household Source: 69,000 peasant household

sample survey study quoted in Ministry sample survey study quoted in Ministry of Agriculture, of Agriculture, China Agricultural China Agricultural Development ReportDevelopment Report, 2006, Beijing, , 2006, Beijing, pp.28-29.pp.28-29.

Net incomes, totalNet incomes, total 3255 (+10.8%)3255 (+10.8%) 100%100%

Wage incomesWage incomes 1175 (+17.6%)1175 (+17.6%) 36.1%36.1%

- industrial work- industrial work 713 (+21.5%)713 (+21.5%)

Of which, localOf which, local 244244

non-localnon-local 496496

Family farm incomesFamily farm incomes 1845 (+5.7%)1845 (+5.7%) 56.7%56.7%

- agriculture- agriculture 1098 (+3.9%)1098 (+3.9%)

- forestry- forestry 46 (+34.1%)46 (+34.1%)

- husbandry- husbandry 284 (+4.6%)284 (+4.6%)

- fishery- fishery 43 (+17%)43 (+17%)

- secondary sector- secondary sector 108 (no change)108 (no change)

- tertiary sector- tertiary sector 267 (+11.3%)267 (+11.3%)

Financial incomesFinancial incomes 88 (+15.5%)88 (+15.5%) 2.4%2.4%

Transfer incomesTransfer incomes 147 (+27.6%)147 (+27.6%) 4.5%4.5%