China is the world’s sixth largest economy and its most populous country, home to 1.3 billion people or 21% of the Earth’s total population. But it faces a major challenge in providing its people with food – China has only 10% of the world’s arable land and only one quarter of the average world water resources per person.
Agricultural reform has therefore been a major pillar of the fundamental economic reforms undertaken by China since 1978, resulting in a gradual transition from a centrally planned economy towards a socialist market economy. The commune system was replaced by one where individual families lease land from the collectives, ensuring that almost all rural households have access to land. Then, rural industries started to expand and absorbed a large part of farm labour. The reforms have achieved a sharp rise in agricultural production together with a dramatic fall in poverty and a significant improvement in the amount and quality of food available.
China’s accession to the World Trade Organisation (WTO) in 2001 confirmed a further strengthening of the reform course it has been following for the last 25 years.
A unique element of China’s experience is that the bulk of the shift in employment has taken place within the rural economy, as agricultural workers moved to newly-developed non-agricultural industry, rather than through migration from rural to urban areas.
This Policy Brief provides an overview of the agricultural policy reform in China, its impacts on agriculture, the challenges facing the sector and the suggested directions for further policy reforms.