Agriculture Reference
In-Depth Information
We believe that, taken as a whole, the trends in China's economic
structure and agrcultural trade n the two decades before WTO accesson
reveal that the changes that are beng experenced as a result of accesson
are not new. Chna was already movng n a drecton that was more
consstent wth ts resource endowments. To the extent that the new trade
agreements reduce barrers to allow more land-ntensve products nto
the domestc market and the reductons n mport restrctons overseas
stimulate the export of labour-intensive crops, the main impact of WTO
accesson s to push forward trends that were already under way. The
commtments that Chna undertook n ts WTO Protocol of Accesson are
largely consstent wth the naton's long-term reform plans.
Agrcultural development polces
Despite the continuity with the past, few can dispute that the terms of
Chna's WTO accesson agreement pose new challenges to the agrcultural
sector. In some cases, there could be large impacts on rural households
and these wll undoubtedly elct a sharp response. Whle the nature and
severity of the impacts will depend on how households respond, perhaps of
even greater mportance s how Chna's agrcultural polcymakers manage
ther sector as the new trade regme takes effect. To examne ths set of
issues more carefully, in this section we review agricultural policy before
Chna's WTO accesson and n the next secton we examne how WTO
measures change the polcy envronment n rural Chna.
Fiscal and financial policies.
Whle government expendture n most areas
of agriculture increased gradually during the reform period, the ratio of
agrcultural nvestment to agrcultural gross domestc product (AGDP)
declined monotonically from the late 1970s to the mid 1990s. In 1978, the
AGDP was 7.6 per cent; by 1995, it had fallen to 3.6 per cent (NBSC 2001).
Moreover, a significant outflow of capital from the agricultural sector to the
ndustral sector and from the rural sector to the urban sector took place
during the 1980s and 1990s through the financial system and government
agricultural procurement (Huang et al. 2006; Nyberg and Rozelle 1999). After
the mid 1990s, when China was preparing for WTO accession, investment in
agriculture was increased significantly. This trend of increasing investment
n the agrcultural and rural sectors has contnued snce accesson.
