Transcript Rural development versus agricultural modernization: some

Rural developments versus agricultural
modernization in China: some preliminary
thinking
Thomas M. H. Chan
China Business Centre
Hong Kong Polytechnic
University,
Beijing, June 2007
Industrialization and globalization creating
their own antithesis
1. Industrialization in the 20th Century had spread mass industrial production
with its inherent chase for technical & economic efficiency to the majority
areas in the world through economic deregulation, trade liberalization and
outsourcing & offshoring;
2. Globalization since the 1970s through financialization of national and international economic exchanges has facilitated the global industrialization
resulting in global commodification & the rise of global value
chains/systems both extensively and intensively for industries, services and
agriculture.
3. Mass production with ever improving technical & economic efficiency &
productivity has created over-supplies of cheap (at the lowest production
costs), standardized products for a world population of increasing
improvisation as wage labour (in whatever branches of productive
economy)
– profit squeeze (ever intensifying competition that obliges producers to
find innovations in production/technology and breaks in institutional
regulations) and
- political reaction from producers (competing for governance controls over
the global value system, or for alternative modes of production) and
consumers (exercise of choice in purchasing – shifting fashion &
personalized consumption (not complying with imposing product
standardization), demand for quality products & willing to pay higher
prices, concerns more for food safety & other non-product factors
(ecological & cultural/local conservation, animal welfare, etc.)
Global responses
1. Socialism & other forms of post-colonial revolution– disengagement from
the global value chain/systems and thus the short-circuiting of the
industrialization and globalization logics – transforming them into national
value chain/systems.
2. Toyotaism, Italian industrial districts, and other forms of post-Fordism in
industrial production mostly after 1970s – modifying the logic of
industrialization (with mass customization and even in combination with
some elements of artisanal production).
3. A new rural development paradigm that goes beyond agriculture since the
1990s – alternative food networks (organic food, local/localized food
system, various types of short food (supply) chains, multifunctionality/pluri-activity of agriculture, fair trade in food products, etc.)
Shift in European agricultural policy – setting
the trend?
From productivist to post-productivist paradigm from the late 1990s:
1. Original purposes of the post-war Common Agricultural Policy – financial
subsidies to expand production plus support for processing and marketing
to help integration of the food chain. A first territorial element was added in
the 1970s to designate less favourable areas eligible for special measures.
2. Agenda 2000 (approved in 1999) – add a 2nd pillar of rural development (to support agriculture as a provider of public goods in its environmental
and rural functions and rural areas in their development) to the CAP to
accompany the further reform of the market policy (the 1st pillar –
providing a basic income support to farmers who are free to produce in
response to market demand). i
Reform of the Common Agriculture Policy of the EU
Source: EU Director-General for Agriculture and Rural Development, EU Rural Development Policy 2007-2013, Fact Sheet, Luxemburg, 2006, p.5.
3. CAP reform in 2003 for implementation after 2005 – transfer of funds from
the 1st pillar to the 2nd – a strengthening of rural development policy via the
introduction of new measures (to promote quality & animal welfare, and
help for farmers to meet new EU standards) and a provision of more EU
money for rural development through a reduction in direct payments for
bigger firms.(1)
4. New rural policy set in 2005 for 2007-2013
- improving the competitiveness of agriculture and forestry;
- supporting land management and improving the environment; and
- improving the quality of life and encouraging diversification of economic
activities.
- building local capacity for employment and diversification
(1)
For the 1st pillar subsidies has been replaced by the Single Farm Payments, which do not require farm outputs or even specific
farm input use. But it is said that funds for the 2nd pillar is limited Funds for SFPs and remaining 1st pillar payments would be
43 billion Euro from 2007 -2013 versus 14 billion for the 2nd pillar plus LEADER scheme. Kenneth J. Thomson, Agricultural
multifunctionality and EU policies: some cautious remarks, presentation at European Network of Agricultural and Rural
Policy Research Institutes seminar, Andros, Greece, 1 October 2004.
New rural policy for EU
Source: EU Director-General for Agriculture and Rural Development, EU Rural Development Policy 2007-2013, Fact Sheet, Luxemburg, 2006, p.7.
Leading by the EU, the OECD has also begun to adopt a new rural paradigm in
place of the old industrialization and modernization approach in the 2000s
Source: OECD, The New Rural Paradigm: Policies and Governance, June 2006
Different mechanism for extending short food
supply chains in time and space
Face-to-face SFSCs Proximate SFSCs
Extended SFSCs
Farm shops
Farmers markets
Roadside sales
Pick your own
Box schemes
Home deliveries
Mail order
E-commerce
Certification
labels
Production codes
Reputation effects
Farm shorp groups
Regional hallmarks
Consumer cooperatives
Community supported agriculture
Thematic routes (articulation in space)
Special events, fairs (articulation in time)
Local shops, restaurants, tourist enterprises
Dedicated retailers (e.g. whole food,
specialty, dietetic shops)
Catering for institutions (canteens,
schools)
Sales to emigrants
Source: H. Renting, T.K. Marsden & J. Banks, Understanding alternative food networks: exploring the role of short
food supply chains in rural development, Environment and Planning A, vol. 35 (2003), pp.393-411, (p.399, figure 2)
Different quality definitions & conventions
employed within short food supply chains
Regional/artisanal characteristics
paramount (link with place of
production or producer)
Ecological/natural
characteristics paramount
(link with bioprocesses)
Designation of origin (e.g.
protected domination of origin,
protected geographical indication)
Farm or cottage foods
Typical, specialty
On-farm processed
Traditional
Fair trade
Organic
Integrated
Natural
Healthy, safe
Free range
GMO free
hybrids
Source: H. Renting, T.K. Marsden & J. Banks, Understanding alternative food networks: exploring the role of short food
supply chains in rural development, Environment and Planning A, vol. 35 (2003), pp.393-411, (p.401, figure 3)
Scale of alternative food system in Europe
1. A 1998 market survey data indicate that organic products, including imports,
account fro less than 2% of total food sales in the EU, with projections of 6~7%
by 2005. (1)
2. A 1998 study of the socioeconomic impact of short food supply chain in EU 15
show:
- German, Italy, France – organic farming, quality production & direct selling add
7~10% to the total net value added realized in agriculture;
- The Netherlands, UK & Spain – 2~4%;
- Ireland – less than 1%;
- Italy – total net value added (including primary production) of SFSC at 29% of
total NVA of the agricultural sector. (2)
(1)
(2)
Quoted in David Goodman, Rural Europe Redux? Reflections on alternative agro-food networks and paradigm change,
Sociologia Ruralis, 44:1 (January 2004), pp.3-16, (p.13)
Quoted in H. Renting, T.K. Marsden & J. Banks, Understanding alternative food networks: exploring the role of short food
supply chains in rural development, Environment and Planning A, vol. 35 (2003), pp.393-411, (p.407)
Some projections/agruments
1. Because of uneven spatial and temporal intensity, there is the possibility of
change that may not engender convergence, but rather accentuate existing
dualism, as between highly intensive industrial agriculture in East Anglia
and the Paris Basin, for example, and other rural areas of more regionallyembedded, multi-functional agriculture.
2. At least, it might create ‘new spaces of possibility’ for farm reproduction
and rural livelihoods, building on the heterogeneity and polyvalence that
are such distinctive features of contemporary European food practices. (David
Goodman, Rural Europe Redux? Reflections on alternative agro-food networks and paradigm change, Sociologia Ruralis,
44:1 (January 2004), pp.3-16)
3. Rural development has created an important, if not decisive, line of defense
for European agriculture against the vagaries and growing instability of
globalized commodity markets. The creation of this defense line is, in
practice, identical to the transformation of agriculture towards new,
multifunctional constellations. (Jan Douwe wan der Ploeg & Henk Renting, Behind the ‘Redux’: a
rejoinder to David Goodman, Sociologia Ruralis, 44:2 (April 2004), pp. 233-242, (0.235)
The Chinese experience from 1949
1. Collectivization under a national redistributive system of planning controls
since the mid 1950s – forced industrialization of agriculture to increase
scale and technical/economic efficiency but with expropriation of
agricultural surplus by and for the urban and industrial sector (socialist
primitive accumulation or the usual capitalist urban and industry biased
economic development strategy?)
2. Decollectivization reform from 1979 – restoration of the peasant economy
(minus private land ownership and the inevitable land concentration that
devastate & destabilize rural economy) with a gradual relaxation of state
redistributive planning controls over sales of food grains and other major
agricultural products (market liberalization in the trade of agricultural
products has not yet completed while an increasing domination of
distribution by urban corporations has already begun)
3. National food security. Several factors like the bitter experiences of over a
century of wars, the large population increase (a consequence of political,
economic and social stability), and the desire to attain a high degree of self
sufficiency (for surplus transfer and for food security) have led the state
agricultural policy to put high priority on production increase by expanding
cultivated land and raising yield. Quantity increase has taken precedence
over other considerations, including even the welfare of peasant families,
ecological and cultural preservation. The fall in cultivated land since the
mid 1990s due to urbanization and industrialization has put further
emphasis on productivity enhanced production increase. Nevertheless, in
the 1990s China has achieved self sufficiency in food supplies at a high
level of calorie intake for its population, but which is also founded upon
ever increasing inputs of chemical fertilizers, insecticides, use of water, etc.
with heavy burden on land and ecology.
4. Rural development in terms of per capita incomes growth of peasant
families has been lagging behind urban development. To overcome this
gap, the state has resorted to rural industrialization, further aggravating
ecological problems by industrial pollution especially with lax
environmental regulations, and individual peasant families have relied on
off farm employment, especially as migrant workers in urban industries and
services (with migrant workers reaching over 100 million).
Food grain production in China
year
Grain production
in 10,000 tons
Per capita grain production
in kg.
1980
32,055.5
326.7
1985
37,910.8
360.7
1990
44,624.3
393.1
1995
46,661.8
387.3
2000
46,217.5
366.0
2005
48,402.2
371.3
Source: Chinese Statistics Yearbook, 2006
International trade in food grain
Trade surplus/deficit
(10,000 tons)
Trade gap/domestic
production
1990
- 789
1.8%
1995
- 1967
4.2%
2000
+ 44.5
insignificant
2005
- 2227.5
4.6%
Source: Chinese Ministry of Agriculture, China Agricultural Development Report, Beijing, 2006, p.145, Table 18.
Agricultural production (in 10,000 tons)
Meat
Poultry &
eggs
Dairy
products
Sea & fresh
water food
Fruits
1990
2857
795
475
1237
1874
1995
5260
1677
673
2517
4215
2000
6125
2243
919
4279
6225
2005
7743
2879
2865
5106
16120
Source: Chinese Ministry of Agriculture, China Agricultural Development Report, Beijing, 2006, p.139, Table 12.
Agricultural land (1,000 hectares)
All farmland
For food grain
For vegetables
For fruits
1990
148,362
113,466
6,338
5,179
1995
149,879
110,060
10,616
8,098
2000
156,300
108,463
15,237
8,932
2005
155,488
104,278
17,721
10,035
Source: Chinese Ministry of Agriculture, China Agricultural Development Report, Beijing, 2006,
p.134, Table 7.
Use of chemical fertilizers & insecticide in
China’s agriculture (in 10,000 tons)
Chemical
fertilizers
Per hectare of
farmland (tons)
Insecticides
Per hectare of
farmland (tons)
1990
2590.3
174.7
n/a
n/a
1995
3593.7
240.4
108.7
7.2
2000
4146.4
265.3
128.0
8.2
2005
4766.2
306.5
146.0
9.4
Source: Chinese Ministry of Agriculture, China Agricultural Development Report, Beijing, 2006, p.131,
Table 4.
Demand for food in China in the 2000s
1. With rising living standard and especially the improvement in calorie intake
and food composition, the demand for agricultural products in China has
experienced a structural transformation:
- a decline in food grain consumption (almost half in 15 years by 2005 for
urban residents & decline began in 2000 with a drop of 20% in 5 years for
rural residents)
- stabilization of meat consumption (but with a large increase in poultry &
egg consumption) in the urban sector since the late 1980s and fast increase
for rural residents since the late 1990s (meat consumption in the rural
sector is about ¾ of urban consumption in 2005)
- acceleration in the demand for seafood and fruits, but a negative growth
for vegetables.
2. Spending on food in consumption expenditures has declined to less than
20% for urban families and 45.5% for rural families in 2005.
Food consumption in China and other countries, 2002
China
S. Korea
Japan
Thailand
USA
Calorie/day/person
Vegetable
Animal
total
2333
2587
2187
2172
2727
618
478
572
295
1047
2951
3058
2761
2467
3774
Consumption/person/year (kg)
Cereals
166.6
151.7
113.8
122.3
112.5
80.7
17.2
34.1
18.0
63.7
9.5
12.3
14.1
6.3
27.8
47.3
66.8
56.3
87.8
110.3
254.1
209.2
106.5
42.1
127.7
Sugar
7.2
19.2
19.3
31.9
32.9
Meat
52.5
49.2
43.9
26.4
124.1
Milk
13.3
29.4
67.1
18.8
261.3
fish
25.6
58.7
66.3
30.9
21.3
Starchy roots
Vegetable oils
Fruits
Vegetables
Source: FAO, quoted in Ivan Roberts & Neil Andrews, Developments in Chinese Agriculture, ABARE, eReport, July 2005, p.5, Table 2.
Food consumption in China (kg/person)
Food grain
Vegetables
Meat
Poultry
Fish & seafood
urban
rural
urban
rural
urban
rural
urban
rural
urban
rural
1990
263.1
130.7
134.0
138.7
11.3
21.7
1.3
3.4
2.1
7.7
1995
260.1
97.0
104.6
118.6
11.3
19.7
1.8
4.0
3.4
9.2
2000
249.5
82.3
112.0
114.7
14.6
20.1
2.9
7.4
3.9
11.7
2005
208.8
77.0
102.3
118.6
17.1
23.9
3.7
9.0
4.9
12.6
Source: Chinese Ministry of Agriculture, China Agricultural Development Report, Beijing, 2006, p.151, Table 24.
Challenges for China’s rural development
in the 21st Century
1. How to internalize external costs of industrialized agricultural
production
(e.g. agriculture-related pollution especially through intensive use of
chemical inputs– air, water, solid wastes, & impact on biodiversity,
deterioration in product quality because of standardization & excessive
priority on quantity increase, problems of food safety & its consequence for
public health, rapid increase in energy consumption, etc. – agricultural
pollution in some coastal areas has exceeded industrial pollution; wastes
from rural enterprises has exceeded 50% of total industrial wastes of the
nation; 120 million tons of rubbish & 25 million tons of waste water from
rural households per year totally untreated );
2. How to raise peasant incomes and revitalize rural economy with a
better chance of sustainability
(governance issue and thus competition over value added created in
increasingly extensive & globalized food supply chains, public finance
issue - equal provision of public infrastructural facilities, services and other
public & semi public goods); and
3. How to achieve/maintain social stability, ecological balance and cultural continuity
of rural communities (ageing – natural & out-migration of the young, & family
problems from migrant workers’ families)
Employment composition per average village of a study of 2749 villages in 2005
Tot. local
labour
Outside
employment
Local
farming
Local nonfarm work
Non-local
workers
National
1081 (100%)
260 (26.5%)
548 (52.1%)
278 (21%)
273 (18%)
Eastern
1226 (100%)
246 (22%)
481 (44.6%)
507 (34.7%)
491 (30.9%)
Central
768 (100%)
223 (31%)
472 (54.5%)
75 (10.4%)
30 (4.4%)
Western
1150 (100%)
322 (29.4%)
737 (61.9%)
93 (8.6%)
60(4.8%)
Collection of Research Reports of the State Council Development Research Centre, 2007,
Beijing, p. 230, Table 1.
Shift in Chinese agricultural policy after 2005
1. Direct reaction to rural development crisis of the late 1990s (continuous
decline in rural incomes from 1997 – 2000 amidst a long-term decline in
relative growth of the rural sector versus the urban sector since 1985) & the
challenges of WTO liberalization of imports of agricultural products after
2003 –
a) a new priority of national policy (with increases in budgetary spending)
on peasants, agriculture & rural villages in 2002;
b) No. 1 Central Policy Document in every year since 2003 for more
aggressive agricultural policy but up to 2005 focusing on conventional
development strategy of intensive, industrialized agriculture for higher
output increase for raising rural incomes plus some new measures of tax
reduction, grain production subsidies & protection of welfare of migrant
workers in the urban sector – not yet any qualitative change in policy.
2. New initiatives after October 2005 that introduced the 11th Five-year
Programme:
a) the no. 1 central policy document of 2006:
- a broader conception of rural development including agriculture, rural
enterprises (labour intensive manufacturing & services), and migrant
workers on one hand, and government sponsored & financed development
of rural infrastructure (farming, ecological & everyday life infrastructural
facilities, village planning & governance of human settlement environment),
and rural public goods (education, training, culture, health, social welfare &
civic morale);
- a new production strategy/regime of high production, high quality, high
efficiency, ecological balanced & safety by structural optimization of
agriculture, promotion of specialty agriculture, green food & ecological
farming, maintenance of famous brand-names of agricultural products & a
healthy husbandry;
- a new ecological approach of recycling & resource-saving farming (saving
of land, water, fertilizers, seeds & insecticides), using energy saving
equipment & machinery and raising input-output efficiency and with a
stepped efforts against agricultural pollution.
b) the no. 1 central policy document of 2007
- direct state financial subsidies for agriculture to be established and
increased;
- promote the development of specialized cooperatives of peasants;
- develop rural clean energy with extension to all types of rural waste
treatment;
- raise sustainability capability of agriculture including organic farming,
ecological farming, recycling agriculture and covers policy areas of rural
environmental protection, and treatments of agricultural pollution and water
pollution in streams, rivers, lakes, and sea;
- develop multifunctions of agriculture including safe & healthy husbandry
& poultry farming (with labeling and traceability systems), specialty
agriculture, garden farming, agro-tourism, bio-energy & bio-products,
product safety & quality standard system (certification, geographical
indication, labeling & traceability procedures, etc.)
c. A new conception of food safety & standards proposed by President Hu in
late April 2007 – ‘from farm to dining table’ whole-process quality control
and monitoring of food chain, which seems to follow the same policy of the
EU (From Farm to Fork: Safe Food for Europe’s Consumers, DirectorateGeneral for Communication, European Commission, 2005) and has the
possibility of moving towards a more integrative policy perspective of
agriculture, food safety & regulations, environmental preservation and
conservation, and public health (ecological public health) (1)
(1) Tin Lang, David Barling & Martin Caraher, Food, social policy and the environment: towards a new
model, Social Policy and Administration, 35:5 (Dec. 2001), pp.538-558; Tim Lang and Geof Rayner, Food
and Health Strategy with UK: A policy impact analysis, The Political Quarterly, 2003, pp.66-75; Tim Lang,
Food control or food democracy? Re-engaging nutrition with society and the environment, Public Health
Nutrition, 8(6A), 2005 and Overcoming public cacophony on obesity: an ecological public health framework
for policy markers, Obesity Review, 8 (suppl. 1), 2007, pp.165-181。
The future of conflicting or complementary
dualism for China’s agriculture?
1. Would Chinese people change their diet from a catching up with the meat & dairy
product-dominated diet of developed countries of USA & Western Europe to return
to a much healthier traditional food of better quality & nutrition?
If so, China would continue the conventional strategy of intensive, industrial
agriculture to increase grain imports and suffer an ever increasing deficit in grain
trade. It would also repeat all problems of rural deprivation, quality deterioration,
and public health issues of food safety associated with global food supply chain.
Agricultural & rural pollution would accelerated. All these would come at a much
larger scale than most developed countries because of the scale of population &
economy of China.
2. Would the alternative food system introduced as new measures in the current
central policy be able to develop in China in competition with the global food
supply chains and the industrial agriculture logic embraced by the Chinese
bureaucracy to achieve a dualism, or be incorporated as supplementary to the
conventional system?
Agricultural & non-agricultural labour in China’s
rural sector ( in 10,000 persons)
Rural
population
% in
national
population
Agricultural
labour
% of rural
population
Nonagricultural
labour
1990
89,590
78.4%
33,336
79.4%
8,673
1995
91,675
75.7%
32,335
71.8%
12,707
2000
92,820
73.3%
32,988
68.4%
15,165
2005
94,907
72.6%
29,976
59.4%
20,412
Source: Chinese Ministry of Agriculture, China Agricultural Development Report, Beijing, 2006, p.129, Table 2.
Composition of peasant per capita income, 2005
Net incomes, total
3255 (+10.8%)
100%
Wage incomes
1175 (+17.6%)
36.1%
- industrial work
713 (+21.5%)
Of which, local
244
non-local
496
Family farm incomes
1845 (+5.7%)
- agriculture
1098 (+3.9%)
- forestry
46 (+34.1%)
- husbandry
284 (+4.6%)
- fishery
- secondary sector
56.7%
43 (+17%)
108 (no change)
- tertiary sector
267 (+11.3%)
Financial incomes
88 (+15.5%)
2.4%
Transfer incomes
147 (+27.6%)
4.5%
Source: 69,000 peasant household
sample survey study quoted in Ministry
of Agriculture, China Agricultural
Development Report, 2006, Beijing,
pp.28-29.