Agriculture Reference
In-Depth Information
mgrant work to become the domnant form of off-farm actvty. Young and
better-educated workers ncreasngly domnate ths actvty. It has expanded
fastest n regons that are relatvely well off; and has recently begun to draw
workers from parts of the population, such as women, who earlier had been
excluded. If China continues to change at the pace it did in the 1980s and
1990s, and other provinces experience the changes that have taken place in
the richest provinces, China's economy should continue to follow a healthy
development path and be well along the road to modernsaton.
Improved incentives.
China's rural economic reform, initiated in 1979, was
founded on the household responsibility system (HRS). The HRS reforms
dismantled the communes and contracted agricultural land to households,
mostly on the bass of famly sze and the number of workers n the household.
Most importantly, after the HRS reforms, control and income rights belonged
to individuals. With the exception of the right to sell their land, farmers
became the resdual clamants of the outcome of ther efforts.
There s lttle doubt that the changes n ncentves resultng from these
property rghts reforms trggered strong growth n output and productvty.
In the most definitive study on the subject, Lin (1992) estimated that China's
HRS accounted for 42-46 per cent of the total increase in output during
the early reform period (1978-84). Fan (1991) and Huang and Rozelle (1996)
found that even after accounting for technological change, institutional
change during the late 1970s and early 1980s contributed about 30 per
cent of output growth. Other researchers have documented mpacts that
go beyond increases in output. For example, McMillan et al. (1989) found
that the early reforms also raised total factor productivity, accounting
for 90 per cent of the increase in output (23 per cent) between 1978 and
1984. Jin et al. (2002) also showed that the reforms had a large impact on
productivity, accounting for growth in total factor productivity of more
than 7 per cent annually.
Domestic output price and market liberalisation policies.
Although early
in the reforms China's leaders had no concrete plan to liberalise markets,
they dd take steps to change the ncentves faced by producers that were
emboded n the prces they receved for ther marketed surplus. The
mportant contrbuton of Chna's prcng polcy was n the tmng and
breadth of the policy change. The first major price rise occurred in 1979,
