China's agriculture sector: Emerging trends and new challenges

The Ninth Five‐Year Plan defines China's approach and priorities to economic reform for the period 1996–2000. The Plan recognizes that the agriculture sector is the weak link in China's drive for rapid economic development. It is the thesis of this paper that the 9th Plan focuses too much on producing more of China's staple foods and fails to lay the foundation for an agriculture that can meet the rapidly changing taste patterns of that subset of the population that is becoming more urban and is experiencing a rapid growth in income. It is argued that China needs to develop a mature food and agriculture system which directs resources to creating an efficient agricultural inputs and services subsector as well as a modern post‐harvest subsector. This will involve institutional development with extensive investment in such activities as the timely and efficient delivery of farm inputs as well as the storage, transport, processing and marketing of farm output. External forces will have a major impact on shaping the continued development of China's agriculture sector as it struggles to compete internationally in the face of significant water and land constraints. Where these external pressures promote reforms that include a greater reliance on market forces, China still has some distance to travel before resources will be allocated on the basis of relative prices that are formed in open, competitive markets.