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Agriculture
Rural Area Agriculture Sector Urban population 1/3; Rural population 2/3 But agriculture labor force is around Why? Many working in the urban areas without urban residence permit (counted as rural residents) Many rural residents working in rural industry not in agriculture (Township and Village Enterprises)
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Rural Organization
Natural Units Market town Large village Small village or neighborhood Household
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1962-84
1984-present
Household
Household
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Management: The collective served as the basic accounting unit Distribution: Net income was distributed to households on the basis of work points
Households accumulate work points over one year The collective after paying taxes, deducting collective accumulation (retained public funds) distribute income to households by the year end, in grain and cash
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Non-agricultural activities
Rural industry (small factories and workshops)
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Spread to other counties in Anhui The central government encouraged the practice only in 1982 Spread throughout China by 1984
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Why?
Stabilization of rural populations The role of land as a means of security and insurance Political economy: the landless are a risky constituency
Economics 12 June 2011 162 Roland-Holst 13
Elementary school: despite nationwide 9 year compulsory education, rural education suffering
Supply side: local public finance constraint, quality declining with real wages and migration Demand side: drop out rates seem to be rising
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Scott Rozelle: How China Will NOT Starve the World (1996) David: China will reverse a 50 year downward trend in global food prices. (2010)
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180
160
140
120
Peak
100
Peak
80 1975
1980 Production
1985 Yield
1990
2000
2010
2015 Population
Source: USDA.
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Changing crops
Grain crops: Rice, wheat, maize, potatoes, etc. Economic or cash crops: Cotton, oil seeds, sugar crops, tobacco, vegetables, fruits, etc.
Agricultural Economics
Demand
Calories and protein came mainly from grain Changing diet: shifting from grain to meat, vegetables, fruits, fish, poultry, etc. Forecasting future demand critical for world market Grain production is land intensive: China is a land scarce country Meat production requires a lot of grain: high conversion ratio for pork (4:1) (but low for poultry (2:1)) Comparative advantage of labor intensive products: vegetables, some fruits, etc.
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Supply
Agricultural Economics
Government policies
Before 1996: redistribution from rural to urban (agriculture product prices below world prices) After 1996: redistribution from urban to rural (agriculture product prices above world prices) Agriculture tariffs (average) Wheat: 24% Maize: 29%
China both imports (wheat and maize) and exports (rice) grain. A net importer. Net self sufficiency rate in grain: set to 95%
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Fertilizer
Domestic production (imported big factories and small local factories) Imports
Water
Irrigation facilities Rice growing region (south of Huai river) vs. wheat growing region (north of Huai river) (Huai river is between Yangtze River and Yellow River)
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Traditional Variety
Fertilizer Applied
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45
60
40 50 35 Irrigated Area
40
25 30 20
15
Fertilizer
20
10 10 5
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300
250
200
50
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1999
2004
2009
2014
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1989
1994
1999
2004
2009
2014
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and shrinking.
Provincial Land Stock Changes
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10"
GDP" GDPPC"
1988"
1998"
1980"
1982"
1984"
1986"
1990"
1992"
1994"
1996"
2000"
2002"
2004"
2006"
2008"
2010"
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36
and so is Inequality
Source: USDA.
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Source: UN.
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Chinas urbanites do not need food price suppression. This stimulates both domestic prices and imports.
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kcal/person/day
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Emergent Imbalances
Despite significant progress in productivity, the implications of these trends in supply and demand are both obvious and inevitable. Chinas growth can only be sustained with increased absorption of resources and resourceintensive products. As it has with energy, China will emerge as a leading global importer of agricultural products.
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Source: USDA.
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Source: USDA/ERS.
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Millions in 2004
4.048 7.110 2,218.543 2.334 312.036 1.163 1,516.575 45.556 51.485 67.546 2.297 88.821 61.001 0.131 332.462 36.994 17.432
Millions in 2004
1.250 54.452 153.413 0.922 14.666 26.612 8.023 6,956.654 1.758 12.604 119.744 25.247 24.436
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