Accelerating the Development of Modern Agriculture

From: English Edition of Qiushi Journal Updated: 2013-05-28 18:38
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I. Approaching the development of modern agriculture with a greater sense of urgency based on the characteristics of a new stage of development

Since the 16th National Congress of the CPC, China has made remarkable achievements in rural reforms and agricultural development. Grain output and rural incomes have increased for nine consecutive years; rural infrastructure and social programs have been improved; and historic breakthroughs have been made in the development of a social safety net for rural areas, which includes a new rural cooperative medical care system, subsistence allowance, old-age insurance, and various other programs. Despite this, however, China’s poor foundation of agriculture, low rural incomes, and significant urban-rural disparities are all problems that have built up over a long period of time, and there is no way we can expect to solve them overnight.

China is facing an arduous task in guaranteeing food security and ensuring the effective supply of major agricultural products at present, and we are increasingly seeing a situation in which the supply of certain agricultural products is failing to meet the growth in demand. In recent years, demand for agricultural products in both urban and rural areas has undergone dramatic changes. Firstly, the per capita direct consumption of agricultural products has begun to flatten out, while consumption of processed and organic foods has increased significantly. Secondly, the consumption of grain products among the rural population has been on the increase. At the same time, while per capita grain consumption has continued a downward trend, the consumption of edible vegetable oil, meat, eggs, milk and aquatic products has continued to increase. Thirdly, due to urbanization, there has been a significant increase in the direct consumption of agricultural products among the population that has moved out of agriculture.

Farmers of Jianshe Farm in Bei’an City, Heilongjiang Province pile together their newly harvested corn. China’s corn output for the year 2012 stood in excess of 208 million tons, more than any other type of grain. / Xinhua (Photo by Zhou Liangjun)

In recent years, China has substantially increased the import of certain agricultural products in a bid to mitigate the environmental and resource constraints that the country is facing domestically. Nevertheless, as the world’s most populous country, China must be self-sufficient if it is to maintain overall social stability. Given actual conditions in China, we can no longer expect to secure increases in agricultural output through the increased input of natural resources. Moreover, seeking to increase output through the increased application of chemical fertilizers and pesticides not only increases costs, but is also detrimental to the environment. Therefore, in order to ensure that we remain self-sufficient, our only option is to accelerate the modernization of agriculture.

The development of modern agriculture not only depends on deploying more advanced technologies and equipment, but more importantly, on deepening reform, introducing new modes of operation, and exerting institutional advantages in order to vitalize agricultural factors of production. At present, accelerating the introduction of new modes of agricultural operation, enhancing organization between farmers in agricultural production, and promoting widespread social participation in the operation of agriculture have become essential policies that China must follow in order to make progress in the development of modern agriculture. 

II. Introducing new modes of agricultural operation

China’s two-tier system for agricultural operation, which is based on contracting to households and links unified operation with independent operation, not only represents the single most important institutional achievement of China’s rural reforms, but also the starting point of China’s unique approach to agricultural modernization in practice. China’s basic rural operation system comprises of three aspects. Firstly, land in rural areas is collectively owned by rural residents. Secondly, rural collectives contract land to individual households to be operated on a per-household basis. Thirdly, where operation by individual households is unable to create economies of scale, various forms of unified operation may be employed. To accurately understand the connotations of China’s basic rural operation system, a full awareness of the intricate relationships between these three aspects is essential. 

At present, China’s agriculture and countryside are undergoing a wave of profound changes. The system of household-based operation has encountered a number of new developments and problems which have highlighted the urgent need to promote unified operation. Agriculture is a special industry that combines production by economic means and production that takes place naturally. Under complicated and uncertain conditions, the sound growth of agricultural products is only possible with the timely and meticulous efforts of agricultural producers. To achieve this, the most straightforward approach is to make farmers the owners of what they produce, which we have done by implementing a system of operation on a household basis. Benefiting from industrialized practices, a small number of agricultural products are now being factory produced in China. However, this represents only a very small fraction of our agricultural sector. In the majority of circumstances, the development of agriculture in China will rely on three things. The first is the shrinking of the rural population, which will allow farmers to gradually increase the scale of their operations; the second is the application of modern technology, which will allow production efficiency to be increased; and the third is cooperation and the expansion of agricultural services provided by a wide range of social participants, which will help to make up for the shortcomings of the household operation system. That said, however, the system of household operation itself will continue to be irreplaceable.

Individual households are unable to cope with all of the problems that arise during the course of agricultural production and operation. Therefore, in order to develop modern agriculture, we should push unified operation in the direction of association and cooperation between rural households, and in accordance with actual conditions, encourage the emergence of a diverse and multi-tiered framework for the operation of agriculture and the provision of agricultural services by a wide range of social participants. On the basis of these two trends, we will gradually develop a new framework for the operation of agriculture which is characterized by intensive, specialized, and organized agricultural production with widespread social participation.

III. Safeguarding the lawful property rights and interests of rural households and improving the combination of factors of production

Efforts to develop new forms of agricultural operators and to promote cooperation and association among rural households cannot succeed without the necessary circulation and regrouping of factors of production. Therefore, a mechanism must be established to effectively protect the lawful property rights and interests of rural households, so as to create a favorable environment for the smooth circulation and optimal regrouping of factors of production.

China has experienced many twists and turns during the course of its efforts to develop agriculture. One of the major lessons it has learned is how to properly treat the lawful property rights and interests of rural households. Although the agricultural cooperative movement of the 1950s laid down the foundations for the collective ownership of rural land in China, the fears that “cooperation” evoke are still affecting the rational circulation of factors of production in the country to this day. Since the implementation of rural reforms, in a bid to reassure farmers, China has repeatedly emphasized the long-term stability of land contracts, extending contract terms for another 30 years on top of the original 15 years. The household contract responsibility system has been in practice for over 30 years. Despite this, however, contractual relations still tend to be limited to practice that resemble the leasing of land between parties. Many farmers still have doubts over the continued validity of their contracted land-use rights in the long term, and are thus uneasy with the idea of transferring their rights.

The promulgation and implementation of the Property Rights Law has laid down a strong foundation to boost the confidence that farmers have in the continuity of their contracted land-use rights. Currently, China’s land resources and forestry authorities have finished confirming the ownership of most collective land (including forestland) in rural areas. These rights have been registered, and the relevant certification is in the process of being issued. Agricultural authorities have already launched trials to confirm, register, and certify the contracted land-use rights of farmers in selected counties and cities, and these trials will be broadened on a step-by-step basis. These foundation initiatives will help to protect the lawful rights and interests that rural households enjoy with regard to land that has been contracted to them. 

Once the lawful rights and interests of rural households have been effectively protected, there are still a number of issues that must be addressed before factors of production in agriculture can genuinely enter circulation. The first pertains to information symmetry and services. In certain families, for example, the principal laborers have opted to leave the local area and seek work elsewhere. In such cases, their contracted land may be available for transfer. The problem, however, is that they have no way of knowing who is willing to take over that land. Similarly, there may be farmers who wish to increase the scale of their operations and take over more land, but have no way of knowing who is willing to transfer land to them. Therefore, intermediaries are needed to provide the relevant information.

Secondly, it must be clarified that the circulation of contracted land-use rights and other agricultural factors of production is centered around rural households. Therefore, the transfer of land-use rights must take place voluntarily, in accordance with the law, and on the condition that compensation is provided. Under no circumstances can transfers take place arbitrarily against the will of households. Large-scale agricultural operations may come in various forms. It is by no means the case that farmers are automatically required to waive their rights when engaging in large-scale operation. The will of farmers must be respected with regard to the means by which land is circulated, and the form that centralized and large-scale operation embodies in practice.  

IV. Developing new forms of organization for cooperation among farmers

The lack of organization in China’s agriculture is manifested in the underdevelopment of organizations for cooperation among farmers. Although village committees can be found throughout rural areas in China, these are primary autonomous organizations that engage in social management and provide public services. In order to develop agricultural production, farmers not only need village-level autonomous organizations, but also operational organizations that can lead them into the market. These are what we refer to as new forms of organization for cooperation among farmers. 

Farmer cooperatives have witnessed significant development since the promulgation of the Law on Specialized Farmers’ Cooperatives. Nevertheless, problems still exist, such as a lack of economic strength, limited operation scale, low service level, and deficient organizational systems. In a country where the vast majority of agricultural producers are rural households that operate on a small-scale, the development of modern agriculture in the real sense is impossible without promoting new types of organization for cooperation among farmers. This is because cooperative organization is able to promote the opening up of agricultural production to widespread social participation whilst maintaining the status of rural households as the primary units of agricultural operation.

Therefore, in line with objective requirements for developing modern agriculture with Chinese characteristics, we must make the major development of various forms of farmer cooperatives an important priority in our efforts to introduce new modes of agricultural operation. Government expenditure in agriculture should be tilted towards cooperative organizations that meet certain conditions, so as to generate more effective assets and productive forces. Doing so will not only improve the operational efficiency of cooperative organizations, but will also enhance their capacity to bring farmers together, thereby attracting more rural households to voluntarily participate in various forms of association and cooperation. In turn, this will drive the development of new modes of agricultural operation, and ultimately accelerate the development of modern agriculture in China.


(Originally appeared in Qiushi Journal, Chinese edition, No.2, 2013)

Author: Deputy Head of the Leading Group of the CPC Central Committee on Rural Work and Director of the Office of the Leading Group  

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