Agriculture Reference
In-Depth Information
The current government grain reserve system is inefficient in many
respects and very costly. It s run by dfferent government agences at the
central, provincial and municipal levels, each with different interests and
not very clearly defined roles. These arrangements give rise to conflicting
nterests n operatons dealng wth market nstablty and cannot serve the
goal of food security well. A smaller, well-managed grain reserve system
with a clear, single objective would better serve this goal. It should be
understood, however, that grain markets will never operate efficiently while
there is a government-run storage system, as it will crowd out efficient
prvate storage.
The restrictions on rural-urban migration and constraints on the
development of urban centres have also restrcted opportuntes for the
rural-urban income gap to be reduced. The research shows that urbanisation
has significant positive impacts on rural incomes and regional economic
growth. The development of urban centres, particularly in inland regions,
appears to be a matter of hgh prorty. The 'keep them down on the farm'
polcy of Chna (and many other developng countres) seems to be due
partly to a concern about problems associated with urban development,
such as congestion and pollution. Urban centres should, however, be seen
in a positive light. They exist because they provide efficiencies of scale
and scope. Problems assocated wth ctes derve largely from the lack
of good planning of infrastructure, inappropriate property rights to land
and napproprate taxes and subsdes. Chna should therefore persst wth
nfrastructure development to promote nland ctes as an offset to the
geographical disadvantages of the inland regions. Otherwise, it will face
contnued pressures for mgraton to the coastal ctes. Removal of the
remaining restrictions on rural-urban migration and discrimination against
rural mgrants should accompany the promoton of the development of
urban centres.
It s shown that rural households n the coastal regon wll do best from
the trade reforms as they have the most opportunty for earnng ncome
n off-farm employment. These opportuntes arse because the non-
agricultural industries in the eastern region benefit most from the trade
reforms. Ths s partly the result of the bulk of prvate-sector development
havng taken place n ths regon. The government should reduce ts support
