1. Dr. Zhang Huidong International Poverty Reduction Center In China Agricultural Growth and rural Development in China Agricultural Growth and rural Development in China

2. 1. Fundamental characteristics and general situation of agricultural and rural economy in China 2.Agricultural Growth and rural Development during planned economy 3.Agricultural Growth and Rural Development during economic reform 4.Enlightenments Outline

3. 1. Fundamental character and general situation of agricultural and Rural economy in China 1.1 Fundamental character 1.1.1 small-scale family farming economy China is a typical small-scale family farming country, has large farming Population, but land for farming is relative Scarce. farmer family is independent in management. Rural land belongs to village collective (rural community) in terms of ownership, and is contracted to farmers, Farmer family only enjoy rights of use, disposition, and surplus governance power. Land purchase and sale activities in rural area are forbidden, but may be rent to others by farmers.

4. Basic Conditions of Rural Households in 2004 （ 15mu=1ha. ） Permanent Residents (Per household) (Per household) Full/Semi Labor Force (Per household) (Per household) Arable land area (mu/person) Hilly area (mu/person) Grassland area (mu/person) 4.082.822.000.214.69

5. 1.1 Fundamental character 1.1.2 being in initial stage of transition from traditional agriculture to modern agriculture Farmer family make extensive cultivation with poor Specialization, Systematization and mechanization, main farm produce still is land-intensive and labor-intensive products, farmers consumption primarily depends on family farming. 1. Fundamental character and general situation of agricultural and Rural economy in China

6. 1.1 Fundamental character 1.1.3 Characteristics of dual economy is distinct Modern industry and traditional agriculture exist side by side with high proportion of rural population and labor force, big productivity gap between industry and agriculture, and large difference on industry structure, employment system, life style, and progress of public services between urban and rural areas. in 2004, Per Capita Annual Disposable Income of urban household is 3.21 times more than Per Capita Annual Net Income of rural households. Engle Coefficient of urban household is 37.7% ， in rural area the figure is 47.2%. 1. Fundamental character and general situation of agricultural and Rural economy in China

7. 1.1 Fundamental character 1.1.4 rural development depends on economic growth, structure optimization and community public service improvement synchronously Economic growth: total output and per labor productivity of agriculture Increase with that of non-farm sectors harmoniously. Structure optimization: Agricultural structure: land-intensive and labor-intensive to capital-intensive and technology- intensive Rural industrial structure: rural industrialization and urbanization. 1. Fundamental character and general situation of agricultural and Rural economy in China

8. 1.1 Fundamental character 1.1.4 rural development depends on economic growth and Structure Optimization, community public service improvement synchronously C ommunity public service improvement: fundamental education and vocational education fundamental education and vocational education medical and health service medical and health service social security service social security service 1. Fundamental character and general situation of agricultural and Rural economy in China

9. 1.2 General situation 1.2.1Agricultural and Rural Management system Farmer groups and villager committee,both are self-government institutions, manage and handle Rural land and other community public Properties. Leaders of both are elected by villagers, Their decision should be open, and supervised by villagers. Town government and village Committee are primary administrative Institutions in rural areas. farmers Farmer group—natural village central government central government Administrative village— villager committee town county municipality province 1. Fundamental character and general situation of agricultural and Rural economy in China

10. Basic Conditions of Rural Grassroots Units in 2004 Number of Township and Town Governments （ units ） Number of Villagers' Committees （ units ） Number of Rural Households (10000units) Rural population （ 10000persons ） 369526527182497194254

11. 1.2 general situation 1.2.2 resources A. Arable land In 2004, area of whole country’s arable land is 0.13 billion ha. among which, The area of irrigated land is 54.49 million ha. Total Sown Grain crops Oil-bearing crops CottonVegetables Area of Tea plantations at year-end Area of Orchard at year-end 1535531016061443156931756012629768 Total Sown Areas of Farm Crops in 2004 （ 1000 ha. ） 1. Fundamental character and general situation of agricultural and Rural economy in China

12. Composition of land for farming in 2004 Land for Farming Cultivated Land Garden Plot Afforested Land Grassland Water Area for Breeding Aquatics 10043.182.3332.2520.641.59

13. 1.2 general situation 1.2.2 resources B. Labor force In 2004,there are 0.49billion labors in china rural Areas, accounting for 64.8 % of that of whole country. 1. Fundamental character and general situation of agricultural and Rural economy in China

14. Number and Composition of Rural Laborers by Sector in 2004 （ 10000 persons, % ） (The number of laborers by sector in this table is classified by main economic activity. For example, those engaged primarily in agriculture and secondarily in commerce are classified as the laborers under farming, forestry, animal husbandry and fishery) Sectors1Industry2345 number305965438.93380.51475.92701.66102.4 Proportion in Rural labors61.610.96.83.05.412.3 Note:1=Farming, Forestry, Animal Husbandry and Fishery; 2=Construction 3=Transport, Storage, Post and Communication Services 4=Wholesale, Retail Trade and Catering Services 5=Other Nonagricultural Trades

15. 1.2 general situation 1.2.2 resources C. Investment （ productive facilities and means of production ） In 2004, government expenditure for supporting rural production is 235.79 billion yuan (RMB), accounting for 8.28% of national finance expenditure. In 2004, total investment in fixed assets in rural area is 1144.93 billion yuan (RMB), accounting for 16.24% of whole country. In which, farmer family investment is 336.27 billion yuan (RMB), accounting for 29.37%. In 2004, original value of productive fixed assets of per rural household at the Year-end is 5956.18 yuan （ RMB), in which, the share used in agricultural production is 4457.13 yuan (RMB), accounting for 74.83%. 1. Fundamental character and general situation of agricultural and Rural economy in China

16. In 2004, per capita productive cash expenditure of rural household is 896.2yuan (RMB), in which, expenditure for household operation is 788.5 yuan (RMB), accounting for 88.03%; expenditure on productive fixed assets is 107.7 yuan (RMB), accounting for 11.97%. 31.31%

17. ： Productive Fixed Assets ： Number of Major Productive Fixed Assets Per 100 Rural Households at the Year-end Motor vehicles （ set ） Large and medium tractors （ set ） Mini and Walking Tractors （ set ） Motorized Threshing Machines （ set ） Carts with Rubber Tyre （ set ） Pumps （ unit ） Draught Animals （ unit ） Commodit y Animals （ unit ） 1.432.2418.7810.1212.8822.0634.8351.83

18. 1.2 general situation 1.2.3 output Presently, China’s total outputs of Grain, Cotton, Meat, Poultry egg rank first in the world. Yield of Major Farm Crops （ 10000 tons ） and Output of Per Capita （ kg ） (2004) ProductGrainCotton Oil-bearing corps Sugar cane Beetro ots TeaFruits Total output 46946.9632.43065.9 8984. 9 585.783.5 15340. 9 ProductGrainCotton Oil-bearing corps Sugar Crops TeaFruits Output of Per Capita3624.923.773.840.64118.36 1. Fundamental character and general situation of agricultural and Rural economy in China

19. Total output of major livestock and Aquatic Products (10000tons) and Output of Per Capita （ kg ） (2004) MeatMilk Poultry Eggs Aquatic Products Total output 7244.82368.42723.74901.8 Pork, Beef and Mutton Cow milk Poultry Eggs Aquatic Products Output of per capita44.617.4b37.8

20. 1.2 general situation 1.2.3 output Output value: Gross Output Valuevalue added Farming, Forestry, Animal Husbandry and Fishery36239.021224.9 Farming18138.411827.7 Forestry1327.1905.6 Animal Husbandry12173.85953.7 Fishery3605.62081.1 Gross Output Value and value Added of Farming, Forestry, Animal Husbandry and Fishery in 2004 （ 0.1billion yuan RMB ） 1. Fundamental character and general situation of agricultural and Rural economy in China

21. 1.2 general situation 1.2.4 structure Primary Industry SecondaryIndustryTertiaryIndustry Gross Domestic Product15.252.931.9 Labor Force46.922.530.6 Composition of Gross Domestic Product and labor force in 2004 （ % ） 1. Fundamental character and general situation of agricultural and Rural economy in China

22. of Composition of Gross Output Value and Labor Force of Farming, Forestry, Animal Husbandry and Fishery in 2004 （ % ） FarmingForestryAnimal Husbandry Fishery Gross Output Value50.13.733.69.9

23. 1.2 general situation 1.2.5 farmer income and consumption income ： Per Capita Annual Total Income, Net Income and Cash Income of rural households and related Composition (yuan RMB,% ） rural households and related Composition (yuan RMB,% ） Next page 1. Fundamental character and general situation of agricultural and Rural economy in China

24. Total income Cash income Net income number%number%number% Total amount 4039.601003234.161002936.40100 Income from Wages and Salaries 998.4624.72997.5630.85998.4634.01 Income from Household Operations 2804.5169.402019.8362.451745.7959.45 Income from Properties 76.611.9062.591.9376.612.61 Income from Transfers 160.633.98154.184.77115.543.93

25. 1.2 general situation 1.2.5 farmer income and consumption Expenditure ： Per Capita Annual Total Expenditure, Cash Expenditure of rural households and related composition in 2004 (yuan, RMB, %) Next page 1. Fundamental character and general situation of agricultural and Rural economy in China

26. Total expenditure Cash expenditure number%number% Amount3430.101002862.54100 Expenditure for household operations 923.9226.9788.5527.5 Purchase of productive fixed assets 107.743.1107.743.8 Taxes and fees 37.491.136.911.3 Expenses on Household Consumption 2184.6563.71754.4661.7 Expenses on Properties and Transfers 176.305.2174.886.1

27. Per capita expenditure for household operations of rural household in 2004 and related composition (yuan, RMB, %) number% Amount923.92100 Farming, Forestry, Animal Husbandry & Fishery 829.289.7 Industry31.23.4 Construction5.60.6 Transport, Storage, Post and Telecommunication Services 27.22.9 Wholesale, Retail Trade and Catering Services 18.62.0

28. Number and Composition of Per Capita Consumption Expenditure of Rural Households in 2004(yuan, RMB, %) number% Amount2184.65100 Food1031.9147.23 Clothing120.165.50 Housing324.2514.84 Household Appliances and Services 89.234.08 Health Care and Medical Services Health Care and Medical Services130.565.98 Transport and Telecommunications 192.638.82 Education, Cultural and Recreation and Services 247.6311.33

29. 2.1 Backgrounds Industry-priority strategy: industrialization——Modernization, need enough capital, only from Agriculture, deprive agricultural surplus to accumulate industry capital. China take two measures in rural areas ： First, build up state monopoly for farm produce purchase and Marketing system, restrict free trade. Government decide the price and quota which farmers sale their surplus farm produce. Grain purchase and marketing is controlled only by state-owned grain agencies. 2.Agricultural Growth and rural Development during planned economy(1949-1978)

30. 2.1 Backgrounds Second, build up production teams in village-level and people commune in township to control production and distribution In village: production brigade and production team In town-level: people commune All production facilities and resources belong to this two kinds of institutions. Farmers went into farming production only as labor, farmer family have no autonomy in management. Production decisions and surplus distribution was controlled by production brigade and people commune. 2.Agricultural Growth and rural Development during planned economy(1949-1978)

31. 2.1 Backgrounds this two systems for promoting industrialization impaired enthusiasm of farmers on farming, resulting in low agricultural productivity, slow agriculture growth and low standard of living in rural areas. Nevertheless, rural areas still make great progress on economy and social services, Especially in infrastructure construction, agricultural technique, fundamental education and medical services. Late in 1970s, China has succeeded in establishing relatively integrated industry system, there is no need to deprive agricultural operation surplus anymore. If continue to conduct past measures, it will impair not only rural development, but also industry itself. 2.Agricultural Growth and rural Development during planned economy(1949-1978)

32. 2.2 Agricultural Growth and rural Development 19521979 Annual average growth rate (%) Farming labor （ 10000 persons ） 19317294522.02 Rural labor （ 10000 persons ） 18243310252.00 Arable land （ 10000 ha. ） 107929950—0.30 Gross output of Grain （ 10000 tons ） 16390332102.50 Gross output of Cotton(10000 tons) 130.4220.72.22 Gross output of oil-bearing corps (10000 tons) 372.8564.11.44 Gross output of Sugar cane(10000 tons) 759.42461.34.64 Gross output of tea (10000 tons) 8.227.74.69 Gross output of fruits(10000 tons) 244.3701.53.86 Growth of agricultural output and resources （ 1952——1979 ） 2.Agricultural Growth and rural Development during planned economy(1949-1978)

33. 19521979 Annual average growth rate (%) Output of Pork, Beef and Mutton (10000 tons) 338.51062.74.25 Output of aquatic products(10000 tons) 1674313.73 Total output value of farming(0.1 billion yuan RMB) 713.01431.52.51 Total output value of Animal husbandry (0.1 billion yuan RMB) 98.7299.54.20 Total output value of agriculture (0.1 billion yuan RMB) 858.01872.22.91 农业总量增长情况（ 1952——1979 ）（接上表） Note: output value is calculated by 1980 fixed price Resource: Cheng Shulan, 1999, Page 264. Agricultural growth met not only the need of industrial capital accumulation, but also that of people’s consumption with arable land area decreasing and total population increasing. Growth of agriculture output and resources （ 1952——1979 ） (continued)

34. 2.2 Agricultural Growth and rural Development Agricultural production conditions Changes of agriculture technical facilities and production conditions （ 1952——1979 ） Next slide Resource: see last table 2.Agricultural Growth and rural Development during planned economy(1949-1978)

35. 19521979 Annual average growth rate (%) Total power of agricultural machinery(10000 kw) 181337927.71 Area of land cultivated by machine(10000 ha. ） 13.64221.923.58 Irrigated area(10000 ha.) 1995.94500.33.05 Consumption of chemical fertilizer (10000 tons) 7.81086.320.03 Gross output of pesticide(10000 tons) 0.253.722.99 Electricity consumed in rural areas(100 million kwh ) 0.5282.726.50 Number hydropower station in rural areas 988322428.30 Station of agrotechnical extension 2321762217.07 Agrotechnician(10000 persons) 1.532.411.87

36. 2.2 Agricultural Growth and rural Development Rural economic structure Rural economic structure Changes of rural economic structure （ 1952——1979 ） Next slide 2.Agricultural Growth and rural Development during planned economy(1949-1978)

37. year Composition of agricultural gross output value （ % ） Composition of gross output value in rural (%) 123456789 195283.10.711.50.393.24.32.5 197976.53.216.01.469.219.31.76.53.4 Change between 1952 and 1979 -6.6+2.5+5.5+1.1-24+15+1.7+6.5+0.9 Animal husbandry;4:Fishery 1: Farming; 2: Forestry; 3: Animal husbandry;4:Fishery 5: Agriculture; 6: Industry; 7: transport; 8: construction;9:commerce Resource: see last table

38. 2.2 Agricultural Growth and rural Development Agriculture and rural areas have made tremendous contribution to national modernization, providing food, raw materials, foreign exchange, consumption market, capital and labor to industry. 2. Agricultural Growth and rural Development during planned economy(1949-1978)

39. 2.2 Agricultural Growth and rural Development Development of social programs and services in rural areas: Education and medical service. By the year 1979, china has popularized primary education in rural areas, establishing elementary school in village and high school in town, teachers are available in abundance. At the same time, relatively perfect cooperative medical care system has been founded with relatively integrated rural medical institutions and professional medical staff. The life expectancy in rural areas increased form 36 in 1950 to 64 in 1979. 2. Agricultural Growth and rural Development during planned economy(1949-1978)

40. 3.1 backgrounds 3.1.1 Agricultural and rural management system reform Central planned economic system transit to market economic System, initiated in rural areas and extended gradually to urban areas and non- agricultural industries. A. Change land operation mode: rationalize ownership to encourage investment on production Endow the farm households with the right of land use, land Endow the farm households with the right of land use, land disposal and claim to the rest of land ； Extend land contract ； Extend land contract ； Regulate land transfer. Regulate land transfer. 3.Agricultural Growth and Rural Development during economic reform

41. 3.1 backgrounds 3.1.1 Agricultural and rural management system reform B. Reform on market circulation of farm products: return to real price signals, increase the efficiency of agricultural resources distribution Lift government direct control on price ； Lift government direct control on price ； Expand the variety of traded products ； Expand the variety of traded products ； Lift the constraint on grain market buyer and seller. Lift the constraint on grain market buyer and seller. 3.Agricultural Growth and Rural Development during economic reform

42. 3.1 Backgrounds 3.1.2 Changes of agricultural and rural development policies Over the past two decades, China shifted from agriculture supporting industry to industry repaying agriculture, thus brought about the integrated development of the two sectors and balance between rural and urban areas. Concrete measures involved in following areas: Concrete measures involved in following areas: （ 1 ） Infrastructure construction in rural areas （ 1 ） Infrastructure construction in rural areas （ 2 ） agriculture science and technology （ 2 ） agriculture science and technology （ 3 ） agricultural support and farmer’s burden （ 3 ） agricultural support and farmer’s burden （ 4 ） economic restructuring （ 4 ） economic restructuring （ 5 ） non-farm employment of rural labors （ 5 ） non-farm employment of rural labors 3.Agricultural Growth and Rural Development during economic reform

43. 3.2 Agricultural Growth and rural Development 3.2.1 Agricultural Growth Gross Output Value FarmingForestry Animal Husbandry Fishery 1952100 1979221.8204.2904.2286.31180.4 1995602.2439.72298.81237.78915.6 2002883.6591.62985.62040.515518 Gross Output Value indices of Farming, Forestry, Animal Husbandry and Fishery （ 1952=100 ） 3.Agricultural Growth and Rural Development during economic reform

44. 3.2 Agricultural Growth and rural Development 3.2.2 Farmer’s income Per Capita Annual Net Income (yuan, current prices) and Related Indices (1978=100,comparable prices) of Rural Households in China 3.Agricultural Growth and Rural Development during economic reform

45. 3.2 Agricultural Growth and rural Development 3.2.2 Farmer’s income Composition of per capita annual total income of rural household 3.Agricultural Growth and Rural Development during economic reform

46. 3.2 Agricultural Growth and rural Development 3.2.3 Rural economic structure Composition of Output Value of Farming, Forestry, Animal Husbandry and Fishery Composition of Rural Laborers( 10000 persons, see next figure) 3.Agricultural Growth and Rural Development during economic reform

47. 1= Farming, Forestry, Animal Husbandry and Fishery Transport, Storage, Post and Telecommunication Services 2=Transport, Storage, Post and Telecommunication Services 3=Wholesale, Retail Trade and Catering Services 4=Other Nonagricultural trades

48. 3.2 Agricultural Growth and rural Development 3.2.4 Rural social public service development Education ： Fundamental education in rural areas in 2004 ： Senior Secondary school: 2454; student:2.55 million; teachers:136000 Junior Secondary school: 38095;student:31.68million;teacher:1.63 million. Senior Secondary school: 2454; student:2.55 million; teachers:136000 Junior Secondary school: 38095;student:31.68million;teacher:1.63 million. Primary school:0.337 million; student:73.78 million;teacher:3.91 million. Primary school:0.337 million; student:73.78 million;teacher:3.91 million. Farmer’s adult education: Farmer specialized secondary school (in 2002): 221,student: 92056, Farmer specialized secondary school (in 2002): 221,student: 92056,teacher:5420. Farmer technical school:0.192million,stendent:46.84million. Farmer technical school:0.192million,stendent:46.84million. Farmer Secondary school:2502, student: 0.579 million. Farmer Secondary school:2502, student: 0.579 million. Farmer primary school:68000,student: 3.8 million. Farmer primary school:68000,student: 3.8 million. 3.Agricultural Growth and Rural Development during economic reform

49. 3.2 Agricultural Growth and rural Development 3.2.4 Rural social public service development Medical service ： Rural township hospital:41626;beds:668863;Medical technical personnel:1.03 million. Village clinic: 0.552 million, in which, run by village collective:0.298million run by village collective:0.298million private:.0.167million. private:.0.167million. Village doctors and assistants: 0.883million. Village doctors and assistants Per village:1.37. Village Doctors & Assistants Per 1000 Rural Population:1.02. Midwife in rural areas:0.227 million (in 2001). 3.Agricultural Growth and Rural Development during economic reform

50. 4. Enlightenments 4.1 Economic system properties rights and price signal properties rights and price signal 4.2 Integrated industry system 4.3 Structure optimization 4.4 Public policy