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

Justin Lin () and Fan Zhang
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Fan Zhang: China Center for Economic Research, Peking University.

No sp199901t3, EEPSEA Special and Technical Paper from Economy and Environment Program for Southeast Asia (EEPSEA)

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.

Keywords: Agriculture; China (search for similar items in EconPapers)
Date: 1999-01, Revised 1999-01
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