Accelerating the Modernization of Agriculture

From: English Edition of Qiushi Journal Updated: 2012-03-31 10:50
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 Synchronizing the modernization of agriculture with industrialization and urbanization is a major task of China’s Twelfth Five-Year Plan. In the effort to promote this balance, it is crucial that we accelerate the pace of modernization in agriculture and draw on our progress in industrialization and urbanization to underpin this process. This approach not only conforms to international experiences, but is also suited to the realities in China. By this means, we will realize balanced development between industry and agriculture and between urban and rural areas.

 I. The task of accelerating agricultural modernization

 We have made remarkable achievements in industrialization, urbanization and the modernization of agriculture since the launch of the reform and opening up drive, and particularly since the turn of the century. In turn, this has strongly promoted the development of a moderately prosperous society in all respects and the modernization of China. China’s industrial added value accounted for 40.2% of the GDP in 2010. Of this value, the output of heavy industry accounted for over 70%. These two figures demonstrate that China is entering the advanced stages of industrialization. Statistics from the national census show that China’s rate of urbanization has shot up at an annual rate of 1.36 percentage points since the year 2000, reaching 49.7% in 2010. This means that China’s urbanization is taking place at an accelerated pace. On the other hand, the rate of mechanization in agriculture and the contribution that progress in science and technology makes to agricultural growth are both 52% in China. Judging from these indicators, agricultural modernization in China is still in the growth stage.

 September 18, 2011, farmers reaping rice in an experimental field in Leifeng Village, Yanggu’ao Township, Longhui County, Shaoyang City, Hunan Province. The rice planted in this field is the super hybrid rice developed by Yuan Longping’s research team. The targeted yield for the third-phase of the project is 900 kilograms per 666.6 square meters. A team of experts from the Ministry of Agriculture supervised the harvest and measured the yield of the day. / Photo by Xinhua reporter Yu Zhiming

 In contrast to industrialization and urbanization, agricultural modernization has lagged behind in China due to natural and historical factors. This can be demonstrated in the following three aspects. First, the change of the agricultural employment structure has lagged behind the development of the industrial structure. China’s agricultural added value accounted for 10.2% of the GDP in 2010. In stark contrast, people employed in primary industry accounted for 38% of total employment. This shows that the transformation of China’s employment structure has lagged significantly behind changes in the industrial structure. As a result, large numbers of people are still held up in rural areas, creating a large surplus of agricultural labor. In turn, this has prevented the development of economies of scale in agriculture and hindered progress in agricultural modernization. Second, the gap between labor productivity in industry and labor productivity in agriculture is widening. For example, labor productivity in industry was 6.2 times greater than that of agriculture in 2010, and the gap between the two has increased by 40% compared to figures from the early 1990s. Uneven development between industry and agriculture has led to low comparative efficiency and low labor productivity in agriculture. This has hindered the smooth modernization of agriculture. Third, the gap between urban and rural areas in terms of income and consumption is widening. For instance, the average disposable income of urban residents was 3.33 times greater than the average net income of rural residents in 2009. Although this ratio declined to 3.23 in 2010, it will be highly difficult to further close the income gap between urban and rural areas in the near future. The per capita consumer expenditure of urban residents is 3.1 times greater than that of rural residents. The low rate of consumer spending in rural areas and the widening consumption gap between urban and rural areas are restraining the growth of domestic demand in China.

 Population growth, urban expansion and rising consumer spending over the long term will drive up the demand for farm produce, and lead to higher expectations regarding the quality of produce. As a result, China will come under increasing pressure to ensure food safety and guarantee the supply of principal farm produce. China is a country with a relative shortage of resources. Due to shortages of land and fresh water, and the increasingly adverse effects of climate change, China will face greater environmental and resource constraints in agricultural production. China’s agricultural foundations remain weak. The standard of our farming machinery and equipment is low, and our capacity to make innovations in agricultural science and technology and spread new technologies is poor. At the same time, our rural labor force is not equipped to meet the demands of modern agriculture. In addition to these increasingly prominent problems, China’s market for agricultural products still needs to be developed, and efforts should also be stepped up to improve systems for the provision of agricultural services by the non-government sector and systems for the provision of support and protection to agriculture. The lagging of agricultural modernization in contrast to industrialization and urbanization has held back China’s overall modernization. In addition to undermining the sustainable development of the rural economy and society, this imbalance will also weaken the momentum of China’s industrialization and urbanization, and severely impede the synchronization of industrialization, urbanization and agricultural modernization.

 II. Drawing from the experiences and lessons of other countries

 The accelerated modernization of agriculture represents a law that has been observed during the modernization of numerous different countries. As we have seen from the experiences of other countries, the prompt development of agriculture and rural areas during the advanced stages of industrialization and urbanization will bring about the sustainable and balanced development of the national economy. On the contrary, neglecting agriculture and rural areas can lead to problems such as the decline of agriculture, the stagnation of the rural economy, and rural poverty. In turn, this will widen the gap between urban and rural areas and between regions, intensify social conflicts, and even result in social unrest and the derailment of progress.

 Looking at how different countries have approached the relationship between industrialization, urbanization and the modernization of agriculture, we may draw the following lessons:

 First, we must promote industrialization, urbanization and the modernization of agriculture at the same time. We cannot fundamentally address the problem of underdevelopment in our rural areas by relying on premature industrialization and over-urbanization. This is because doing so would result in the decline of agriculture and lead to many problems in cities. Only by promoting industrialization, urbanization and the modernization of agriculture at the same time can we strike a balanced and healthy relationship between these trends. In light of the conditions in China, we must adhere to the policies of nurturing agriculture through industry and supporting the countryside through urban initiatives. We must seek to transfer the rural labor force out of agriculture in step with the pace of industrialization and relocate rural residents in accordance with the progression of urbanization. In this way, we will ensure that agriculture develops in harmony with industry and our cities.

 Second, we must provide agriculture with greater support and protection during the process of modernization. Countries entering the later stages of industrialization face the risk of neglecting agriculture, in spite of the sound conditions they enjoy for the accelerated modernization of agriculture. For instance, neglect towards agriculture led to a serious food shortage in France after the Second World War, even though France was already an industrialized nation at that time. This seriously hindered the country’s economic development. Agriculture is the foundation of China’s national economy. However, for a country with a population of 1.3 billion, this foundation is still relatively weak. As the modernization of agriculture in China is currently in its infancy, we must do more to support and protect agriculture.

 Third, we must correctly assert the roles of the government and the market in modernization. Governments and markets have played different roles at different points in history. The first industrialized countries in Europe and America mainly relied on market forces to gradually balance out industrialization, urbanization and the modernization of agriculture. This, however, was a protracted process. On the other hand, countries such as Japan, which were later to industrialize, mainly relied on the government to promote and intervene in economic development. These countries were able to rapidly synchronize industrialization, urbanization and the modernization of agriculture. As China sets out to modernize its agriculture, it is faced with a weak economic foundation and a shortage of resources. Therefore, at the present stage, China must rely on the role of the government in resource allocation to support and protect the development of agriculture. However, as agriculture continues to modernize and the market economy becomes more effective, the government should give greater emphasis to the basic role of the market in the allocation of resources whilst continuing to support and protect agriculture.

 III. Major initiatives for balanced development

 China is aiming to accelerate the modernization of agriculture and achieve the simultaneous progression of industrialization, urbanization and the modernization of agriculture during the Twelfth Five-Year Plan. To do this, we should identify key aspects and key areas of focus in this effort.

 1. We should adjust national income distribution to give increased support to agriculture and rural areas. Government expenditure towards agriculture, rural areas, and rural residents increased progressively throughout the Eleventh Five-Year Plan. Expenditure in rural-related initiatives from the central budget increased from 339.7 billion yuan in 2006 to 858 billion yuan in 2010, amounting to 3 trillion yuan over the 5-year period. This led to a significant increase in our overall agricultural production capacity. We will continue to adjust national income distribution during the Twelfth Five-Year Plan. Moreover, we will constantly increase expenditure toward agriculture, rural areas, and rural residents and gradually raise the proportion that expenditure in these areas accounts for in the central budget. On this basis, we will optimize the structure of investment in agriculture, scientifically define the scope of investment and standardize the items subject to investment. Underdeveloped financial services in rural areas have restricted the development of agriculture, rural areas and rural residents. Therefore, we must improve and implement policies requiring that county banks use savings deposits primarily for the provision of loans to support local development. In addition, we should intensify the responsibilities of financial institutions in supporting agriculture, rural areas, and rural residents, thereby establishing a long-term mechanism to ensure sufficient expenditure for agriculture, rural areas and rural residents.

 2. We should strengthen our capacity for technological innovation in agriculture and accelerate the transformation of China’s pattern of agricultural development. The application of science and technology is the key to developing modern agriculture and realizing the simultaneous progression of industrialization, urbanization and modernization of agriculture. Therefore, we must accelerate technological innovation in agriculture, integrate agricultural technologies, apply more machinery, and introduce IT into agriculture. This will provide the basis for the deployment of more advanced technology and equipment in agriculture. We should cultivate new crop varieties which are safe, superior and high in yield; and new animal breeds which are healthy and serve special purposes. In addition, we should focus on promoting the use of key technologies concerning the application of new breeds, the conservation and economic use of cultivated land, the mitigation of natural disasters, the raising of efficiency, water efficient irrigation and the prevention and control of diseases and pests. We should accelerate the development of affordable, multi-functional agricultural machinery so as to blend the application of agricultural machinery with agronomy. We should develop agricultural information technologies and resources, build a comprehensive information service platform for agriculture, rural areas and rural residents, and accelerate the application of IT in agriculture, especially with regard to production and the operation of agriculture.

 3. We should be innovative in design of systems and mechanism for the operation of agriculture to promote specialization, standardization, large-scale development and intensive operation. China has 260 million rural households. This means that the average area of arable land per household is less than 0.5 hectares. Thus, the scale of agricultural operation in China is much smaller than in many other countries of the world. For this reason, we must make constant innovations to the way that we run agriculture, and encourage various forms of association and cooperation between rural households. This will allow us to adapt to urbanization and the reduction of rural labor force whilst keeping to our two-tier system for the unified and independent management of agriculture based on household contracts. We need to improve management and services concerning the circulation of contracted land-use rights according to the principles of transferring rights legally, willingly and in exchange for compensation. By doing so, we will direct arable land toward farmers that boast expertise in farming, large farming households, family farms, and specialized farmer cooperatives, and thereby promote an appropriate level of scale operation in agriculture. We should standardize the production of vegetables and non-staple foods, set up more facilities for garden crop cultivation, develop large-scale poultry production bases, and spread healthy aquaculture techniques. We should stress the roles of major producing regions and areas with ideal conditions in agricultural production. On this basis, we should optimize the structure of agricultural productive forces and build demonstration zones for modern agriculture, concentrating the production of farm products on a group of areas that exhibit prominent strengths and features.

 4. We should develop agricultural and rural infrastructure in order to improve the working and living conditions of rural residents. We should implement the plan to increase grain production capacity by 50 million tons with the focus on the effort to boost our comprehensive grain production capacity. Raising funds through various channels, we should build irrigation facilities, improve the quality of arable land, renovate low and medium-yield farmland, and cultivate all-weather high-yield farmland. We must designate permanent primary farmland throughout the country and ensure that this land is placed under strict protection. We must accelerate land consolidation and reclamation efforts and promote the active yet prudent development of reserve farmland. With a huge rural population, China will still have hundreds of millions of rural residents even after the country has achieved a high level of urbanization. Therefore, urbanization in China must be coordinated with the development of a new countryside. We should scientifically formulate plans for the development of rural areas, and comprehensively develop infrastructure, service facilities and public service programs in rural areas. We must continue to expand the coverage of the public finance system, public facilities, and the public service system in rural areas, so as to increase the overall standard of public services in rural areas. This way, we will be able to create ideal homes for our rural residents, and ensure satisfactory living and working conditions for people who remain in rural areas.

 We should use industrialization and urbanization as a supporting foundation for the modernization of agriculture. We should do more to utilize cities as engines for rural development and make efforts to bring industrial development in urban and rural areas under unified planning. Efforts should be made to encourage the clustering of labor intensive industries and agricultural processing in county seats and central towns. This will allow us to build an industrial structure in which the division of labor between urban and rural areas is more rational. We will establish a mechanism to ensure equality in the exchange of factors of production between urban and rural areas and develop a unified construction land market that covers both urban and rural areas. In addition, we will clearly define public and commercial construction land, narrow the scope for the requisition of land, improve the system of compensation for the requisition of land, and improve mechanisms for the circulation of collective commercial construction land. These measures will allow rural residents to enjoy the fruits of industrialization and urbanization to a greater extent. We should establish a unified human resources market to ensure that urban and rural residents have equal access to employment, and adopt various measures to help the rural labor force secure employment outside of agriculture. We will deepen the reform of the household registration system, relax the criteria for accommodating eligible rural migrants as permanent urban residents in line with actual conditions, and increase the coverage of rural migrant workers under public service networks and social security systems, thereby ensuring the reasonable and orderly relocation of the rural labor force and rural residents in cities.

(Originally appeared in Qiushi Journal, Chinese edition, No.19, 2011)

Author: Minister of Agriculture of the People’s Republic of China

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