Agriculture Reference
In-Depth Information
cent productvty mprovement mples that Chna should almost double
the level of agrcultural research and development.
Agrcultural productvty may be mproved through other channels.
One such approach could be reformng the current land tenure system.
It s often argued that the average farm sze n Chna s too small to take
full advantage of available economies of scale. Without well defined land
ownership, farmers are reluctant to invest in land, and the lack of a land
market mpedes needed adjustments n Chna's rural economy (Lohmar
and Somwaru 2002). However, secure land tenure is also important so
that low-income farmers can have food security. Zhou (1998) finds that
Chna's 'dual land system'
4
s superor n terms of avodng generatng
new landlessness and inefficient landholding. Further, Ho (2001) finds
that many Chinese farmers prefer the current system, especially in poor
villages, as it guarantees households access to land. FAO (2002, p.26) also
shows that the poverty index is negatively related to land holding, and
productivity is negatively related to farm size, that is, smaller farms have
higher productivity. These findings may prompt second thoughts about the
popular idea of increasing farm size, especially in poor regions.
Finally, further liberalisation is also an option. It was suggested in
Chapter 6 that domestc market reform charactersed by freer movement
of prmary factors and commodtes may enhance overall welfare and
mprove regonal ncome dsparty.
In addition, China should promote trade liberalisation globally. China
has made significant commitments in trade liberalisation of agricultural
products and ts protecton of agrculture s among the lowest n the
world. Ths puts Chna n a good poston n the new round of trade
lberalsaton negotatons. GTAP smulatons show that the removal of
agrcultural protecton n OECD countres mproves the compettveness
of Chnese agrcultural products n world markets and ncreases the gran
self-sufficiency rate (Yu and Frandsen 2002).
