By Han Jun of DRC

Research Report, No. 26 2014 (Total 4525)

The promotion of agricultural modernization along with the further development of industrialization, IT application and urbanization is an underlying task related with the establishment of a moderately prosperous society in all respects and the overall construction of modernization. Based on the national conditions and agriculture development and in line with the requirements of our times, we must strive to break new paths leading to a new-type agricultural modernization with Chinese characteristics, including advanced production techniques, moderate management scales, strong competitive edges and sustainable environment. The No. 1 Document of the CPC Central Committee issued in 2014 laid down a comprehensive plan for the comprehensive development of reform in rural areas and the acceleration of agricultural modernization, and explicitly pointed out the direction and principles for the progress of new-type agricultural modernization of China under the new circumstances. It also raised many new ideas and measures for issues concerning agriculture, rural areas and farmers in the new era. Some relevant options on the implementation of the guidelines of the document are given as below.

I. Correctly Handling the Relations between Domestic Supply and Appropriate Import of Food and Improving Food Security System of China

It is an eternal social rule that only when clothing and food are sufficient and the granary is full can there be a stable social order. Food security concerns economic development, social stability and national independence. For China, a country with a large population, it is a matter of utmost importance for its governance to hold fast to the food supply. Since the reform and opening-up drive, the comprehensive productivity of food in China has improved steadily and food supply has become increasingly abundant. It is a universally acknowledged achievement for China to feed over one billion people with nearly 9% of arable land and 6.5% of water resources in the world. The Global Food Security Index released recently by Economist Intelligence Unit indicates that China ranked 42nd among the world 107 countries with an excellent economic performance. In view of China's position as the 52nd in the world rankings and in terms of per capita GDP, China is one of the few countries which surpass that of the wealthy countries related to food security by a big margin.

In the course of swift industrialization and urbanization, China is still experiencing the transition of food consumption structure. Except for the continuous drop in the consumption of provisions, the consumption of other agricultural products has a relatively large room for growth. The total demand of food will keep growing. China's urbanization level stood at 52.57% in 2012, and is expected to reach 70% by 2030, whereas the expected peak value of urbanization in China would range between70%~75%. In the 20 years from 2011 to 2030, there will be around 300 million newly added urban residents. According to relevant statistics, the average food demand per capita per annum of the migrant workers in 2013 was respectively 119.14 kg, which is 51.04kg higher than that of the rural residents and urban residents. A rural resident coming to the city, after following the food consumption pattern in the city, will increase his daily food consumption by 20%. The hundreds of millions of city-bound farmers will bring about new changes to the food demand. In the meantime, the total acreage of arable land keeps decreasing, the shortage of water resource gets aggravated, influence of the climate change becomes intensified and the sustainable increase of food production in China would become increasingly difficult, therefore, the food supply and demand will remain tightly balanced in the long run.

China, as a developing country with a large population and insufficient land, will find it hard to satisfy the food consumption of the residents and the increasing food demand arising from the economic and social development if it just limits itself to the domestic arable land and water resources. Take the year 2013 for example. The imported food and edible vegetable oil is equivalent to the cultivation of over 800 million mu (15 mu make one hectare) of sown area, approximately equivalent to one third of the total sown area of crops in China. Against the background of deepening economic globalization, it is impossible for China to develop agriculture in isolation from the world. The strategic layout of the agricultural development should utilize both international and domestic resources and markets and give full play to its advantages as a major economy, and efficiently make use of the global resources and international markets so as to effectively regulate and supplement the domestic food supply. We must pay close attention to the formulation of an international trade strategy on major agricultural products, optimize the mix of the source of grain import, and establish stable and reliable trade relations; speed up the implementation of the “go global” agricultural strategy and foster large enterprise engaged in the production of grain, cotton and oil and with international competitive edge; render support to qualified enterprises to conduct overseas agricultural production and cooperation on import and export with mutual benefit and especially with neighboring countries so as to prevent and mitigate the risks resulting from purely relying on the import of agricultural products.

Given the changes related to the domestic resources and environment conditions, supply and demand pattern of food and the international trade environment, we should keep a firm hand on the initiatives of food security and implement a national food security strategy based on domestic supply and moderate imports which will ensure production capacity and the science and technology-based support. First of all, it is determined by the special condition of China. China is the largest food producer and consumer. Every year, China's food consumption is approximately twice the food trading volume of the world. Should food import is excessive, there will be considerable risks and potential dangers which will not only be unbearable to the international market, but also bring adverse impact to food security of low income countries. Second, it is determined by the demand of the development of China's agriculture. The per unit yield of wheat, rice and corn of China is around 60%, 71% and 67%, respectively, the average of the top ten countries. There is still much room for the improvement of food production in China. From 2020 to 2030, the number of agricultural labor force will still be as high as 210 million and 160 million respectively. Should food import is excessive, domestic food production is bound to be affected, resulting in the unemployment of a large number of farmers. Third, the influence of China on global food market keeps increasing and the requirement from international community on the responsibility of China is more demanding. China's effort in securing self-sufficiency of food is also an important contribution to global food security.

To facilitate the establishment of a guarantee system for food security in compliance with the situation of China, we must ensure that the red line for protecting farmland (arable land) is not crossed, delimit the scope of permanent basic farmland and implement the practice of holding provincial governors responsible for the “rice bag” (grain supply). We should further clarify the responsibility and division of work in food security between the central and local governments, keep improving the comprehensive productivity of agriculture, enhance China's ability in coordinating and utilizing the international agricultural resources and market and ensure general self-sufficiency of grain and security of food to provide a strong support for the establishment of a moderately prosperous society in a comprehensive manner.

II. Correctly Handling the Relations between the Common Development of Household-based Management and Diversified Management Modes and Facilitating the Establishment of a New-type Agricultural Management System

Household management is the most common form in agricultural management according to the practice in light of the agricultural development worldwide. The basic feature of agricultural production is decentralized management and it requires timely response to the minor changes in natural environment, which has made the supervision cost for agricultural production relatively high. The economic benefit among family members of rural households is highly conformable with each other and does not require exact labor measurement or supervision. Compared with other management modes, household management is the most adoptive in agriculture, which can not only be adopted by traditional agriculture which is based on manual labor, but also by modern agriculture which applies advanced scientific technology and means of production. In agricultural modernization in China, household contract management boasts great potential and has promising prospects. There is no possibility that the fundamental status of household management will be changed after productivity is increased. Household management is and will be the fundamental management mode in Chinese agriculture.

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