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The Effects of China’s Rural Policies on the Sustainability of Agriculture in China

Author

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  • Justin Yifu Lin

    (China Center for Economic Research, Peking University.)

  • Fan Zhang

    (China Center for Economic Research, Peking University.)

Abstract

Major rural policies in China before the reform include the state-monopolized procurement and marketing system (SMPMS), collectivization and grain self-sufficiency policy. All these three policies were shaped by heavy-industry-oriented development strategy, adopted in the early 1950s. SMPMS was implemented to provide cheap food and raw materials for urban areas. Collectivization was a vehicle for implementing the procurement policy. Grain self-sufficiency was for national security and for saving scarce foreign exchanges for the development of industries. The above three policies generally have negative impacts on the sustainability of agriculture. Low price SMPMS led to wasteful usage of natural resources. National self-sufficiency led to over-extraction of resources so as to meet increasing domestic demand from population and economic growth. Local selfsufficiency led to misallocation of resources. Collectivization caused low incentives in agricultural production. But these policies also gave local governments the ability to mobilize labor for construction of irrigation project, increasing the crop intensity and so forth. Some of these may be favorable for environment. The reform started at late 1970s improved farmers' incentives. But land and forest are still collectively owned. Some of the impacts of rural reform on environment are positive and others are negative. The negative impact is because that the property right is not secure so farmers have less incentive to concern about long-term sustainability and the government is less effective in mobilizing labor for environmental protection projects. The reform, however, may also have positive impacts. As the property rights are well defined and income increased, farmers' demand for better environment will increase. The direction of future reform are to secure property rights, to liberalize price and market control, to give up national and regional self-efficiency and to reduce government's direct involvement in economic activities. Suggested areas for future research are the environmental impacts of regional self-sufficiency, insecure land tenure system and the rapid development of township-and-village enterprises.

Suggested Citation

  • Justin Yifu Lin & Fan Zhang, 1999. "The Effects of China’s Rural Policies on the Sustainability of Agriculture in China," EEPSEA Special and Technical Paper sp199901t3, Economy and Environment Program for Southeast Asia (EEPSEA), revised Jan 1999.
    • Handle: RePEc:eep:tpaper:sp199901t3
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    References listed on IDEAS

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    1. Lin, Justin Yifu, 1988. "The Household Responsibility System in China's Agricultural Reform: A Theoretical and Empirical Study," Economic Development and Cultural Change, University of Chicago Press, vol. 36(3), pages 199-224, Supplemen.
    2. Fan, Shenggen, 1997. "Production and productivity growth in Chinese agriculture: new measurement and evidence," Food Policy, Elsevier, vol. 22(3), pages 213-228, June.
    3. Yifu Lin, Justin, 1997. "Institutional reforms and dynamics of agricultural growth in China," Food Policy, Elsevier, vol. 22(3), pages 201-212, June.
    4. Lin, Justin Yifu, 1991. "The household responsibility system reform and the adoption of hybrid rice in China," Journal of Development Economics, Elsevier, vol. 36(2), pages 353-372, October.
    5. Wen, Guanzhong James, 1993. "Total Factor Productivity Change in China's Farming Sector: 1952-1989," Economic Development and Cultural Change, University of Chicago Press, vol. 42(1), pages 1-41, October.
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