Agriculture Reference
In-Depth Information
hardly serve a national goal. Given a shortage of supply, some
agencies may support the market using their reserves, while others
may buy and hoard grains to make a profit. Therefore, it is necessary
to reform the gran reserve system to gve t a sngle objectve and
to have it operate under clear guidelines and unified control.
Relationship between rural industrialisation and urbanisation
and rural incomes
Gran market deregulaton and structural adjustment n the agrcultural
sector are important. However, due to the huge surplus of agricultural
labour, these measures will not be sufficient to absorb the shock of
agrcultural nternatonalsaton. Polcy adjustments are also needed to
accelerate Chna's rural ndustralsaton and urbansaton.
During the economic reform period, particularly up to the mid 1990s,
rural ndustry developed very quckly and made a major contrbuton to
Chna's rapd economc growth (see the World Bank 1996; Ca 2000; and
Wang 2000). Employment in the Township and Village Enterprise (TVE)
sector increased from 28 million to 135 million during the period 1978-96,
accounting for more than one-fourth of the total rural labour force. TVEs
produce at least one-quarter of the total ndustral output. Development of
the TVE sector has also made a great contribution to increases in farmers'
ncomes. Nearly one-half of rural household ncome now comes from non-
agricultural sources, mainly from the TVE sector. Figure 4.2 shows that the
level of rural income per capita in China's 31 provinces is closely associated
wth provncal achevements n rural ndustralsaton.
Rural industries experienced substantial development in the 1980s,
partally because the rural reform created a better market envronment whle
the urban economy was stll heavly subject to central control. Government
policies also had an important influence, encouraging development of TVEs
in rural areas and discouraging rural-urban migration.
Development of rural industries slowed in the late 1990s, mainly due to
sharper market competition, unfavourable location of the rural enterprises,
difficulties in external finance, and lack of infrastructure facilities, technical
inputs, and human resources. Meanwhile, urbanisation accelerated. Large
numbers of rural labourers migrated to urban areas to find jobs. In year
