Agriculture Reference
In-Depth Information
in other rural-based countries, the main factors behind reductions in rural
poverty wll be the scope for rural households to earn off-farm ncome and
for people to move from rural areas nto ndustral and servces actvtes n
urban centres. Therefore, to a very large extent, the success of the trade
reforms wll depend on polces beyond agrculture.
There was considerable internal resistance to China joining the WTO,
wth concern about food securty (more commonly seen n Chna as food
self-sufficiency) and the perceived adverse impacts on the agricultural
sector. The analysis carried out in this project has confirmed that structural
change driven by productivity growth—which the trade reforms will
promote—will lead to agriculture becoming a smaller and smaller part of
the economy. As incomes increase, consumption patterns change and the
share of agriculture shrinks, China will become less self-sufficient in many
commodities. Because it has such a large population, however, China will
always have to produce most of the food that t consumes. As the modellng
has shown, trying to hold this development at bay or reverse it would have
exorbitant costs. No doubt, however, there will continue to be resistance
to the reforms n agrculture. The large proporton of the populaton that
is still supported by agriculture can be a significant political weapon.
Unfortunately, resistance to reforms can prevent exploitation of the
potential for their incomes to increase, thus providing further ammunition
for arguments to provide government support for the sector. It is important,
therefore, that the economic arguments against 'food self-sufficiency' be
made over and over.
The gap between urban and rural ncomes has wdened n the past
decade or so. Partly, this is an outcome of the very rapid growth of the
urbanised industrial and services sectors, but it is also the result of a slowing
of the growth of rural ncomes. Ths s partly the result of the slow-down
in the growth of the TVE sector and the lessened opportunities for rural
households to earn off-farm ncomes. Incomes n the agrcultural sector have
not grown as rapidly as they could because of poor agricultural policies,
such as ineffective and costly price support policies, regional self-sufficiency
policies and monopolistic marketing and distribution of bulk commodities,
fertlsers and seeds. Chna's accesson to the WTO should help to mantan
pressure to brng about reforms n these areas.
