The process of reform in the agricultural sector in China (Term Paper Sample)

The process of reform in the agricultural sector in China
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China is an Asian country whose population is extremely high thus putting much pressure on the food produce available in the economy. The number of people who need food resources is high thus implying that the government has to devise mechanisms of ensuring that it meets this basic requirement. The government perceives agriculture as one of the most essential industries that are necessary for economic growth and development where efforts have been made to increase the food supply in the economy (Li, 2010). China is an economy that is expanding tremendously in the global economy owing to the numerous industries in the economy that are able to produce lots of products for export purposes. China has also been exporting food products implying that there is plenty of it in the local economy to the extent that it surpasses the local demand thus warranting export.
There have been various reforms that are credited for enhancing the increase in value of agricultural production, which grows at a rate of 4.8% annually, which represents an increase of 2.75% more than what was achieved 26 years earlier (Li, 2010). The output of meat, fruits, aquatic products, and edible oil has increased tremendously as a result of these reforms. There have also been structural changes in agricultural production where new methods of doing things have come in as a result of technological improvements.
Before the onset of the agricultural reforms in this economy, almost one third of Chinese living in rural areas were underfed. The problem was fixed by the tremendous reforms that were introduced by joined efforts of the government and the private sector. According to Wouters (2012), majority of Chinese live above poverty line at the moment since they enjoy an abundant supply of food resulting from the improvements in agriculture.
The origin of agricultural reform of China begun under the central planning mechanism that was initiated in 1950s when the government installed the soviet –style of planning that was to steer industrialization in the country (Findlay & Martin, 1993). Agriculture productivity was quite low by that time implying that majority of Chinese had to depend on little food supplies that they could cultivate on their farms or trade with their neighbors. The government came up with reforms that supported agriculture helping to provide farm equipment to organizations and individuals. After this, the government followed up by setting procurement and marketing board, which was charged with the responsibility of purchasing agricultural products from farmers and sell abroad where prices were high to help in the foreign exchange that was re-invested in agriculture and other related processing industries.
The first reform that was witnessed in agriculture was the change of the production system. The Chinese people together with their leaders managed to come together to ensure an increase in the rate of production in the economy. Li (2010) claims that the households were encouraged to increase their production level by being allowed access to farm inputs at cheap prices while the government used to help them to market the produce to the urban centers where the demand for the farm produce and food in particular were extremely high. It implies that the rural agriculture sector was playing a significant role as a producer of raw produce where the produce could be taken to the urban centers inform of food or raw materials to the variety of agriculturally based industries for processing. The government came up with the contract farming system to replace the collective farming system that was widely used in the previous years (Binswanger-Mkhize et al., 2009). Under the collective system, farmers were encouraged to join cooperative societies to get incentives to increase their productivity. The contract system was to safeguard the interests of the farmers where they were now allowed to enter in contracts with firms to supply them farm produce and agreed upon terms and conditions.
The reforms involving the price and market system are also regarded as the process that led to massive transformations in the agricultural sector of china as a whole. By the time these new reforms were introduced, the institutional and structural transformation of the agriculture sector was almost complete where the household-based farm production was functioning well in supplying the farm produce to various markets that had been made available especially in the rural areas. The process of marketing and price systems especially regarding cotton and grain was essential and is still essential from the early days.
Currently, the Chinese government is still concerned about the need to introduce further reforms in the agricultural sector. One of the areas that are under consideration is the pricing mechanism that shall enhance productivity and competitiveness. The Communist party leaders have indicated that there is need to support the issue of having a market based economy where there is no intervention in the prices and pricing of firms (Binswanger-Mkhize et al., 2009). This is a reform that is going to help the Chinese products to become competitive in the global market since the prices will tend to reflect the costs incurred in production and distribution. There are social aspects that are embedded in the current pricing system where the government normally subsidize or help the farmers to produce their products. In such a scenario, the produce can get to consumers at relatively low prices. Majority of the rural dwellers are able to access various agricultural products at cheaper pieces. The local industries that depend on the agricultural products as source of inputs are helped by the government to get the required inputs at low prices for them to produce at low costs. The products produced by the agro-based industries are taken to the international markets as exports thus earning foreign exchange.
There was a contract system, which had been initiated in 1979 that increased procurement activities of 18 major agricultural products that led to an increase in prices to up to 25%. There was a need for more reforms to ensure that the prices of products were fair enough to ensure that the farmers got value for their efforts. Marketing and price mechanisms were supposed to help the farmers to access markets at reasonable prices. There were numerous mechanisms and effort by the government to market the farm produce to industrial and domestic consumers Binswanger-Mkhize et al., 2009). These were responsible for the purchase of produce from farmers to enable them to expand their activities to a large scale thus leading to increased production to meet the escalating demand fin the economy.
The economy has benefited from the tremendous growth in the agricultural sector that has derived most of its success from the establishment and popularization of Household Responsibility System (HRS) that has led to the independence of farmers thus enabling the growth of the market economic system. The agricultural commercialization in China is credited as a reform that has enhanced the increase of farm products and production factors, which have ended up giving regulation a driving role in the agricultural economy (Findlay & Martin, 1993). The growth of this industry has been credited to the signing of numerous international trade pacts between China and her trading partners as the US under the surveillance of World Trade Organization to ensure and facilitate fair trade. Data collected by Li (2010) shows that the marketing reforms that paved way for international trade were responsible for the major milestone that was seen in 1998 where China made history by exporting agricultural products that were worthy over US $26.2 billion. It was a milestone that opened doors for increased exportation of agricultural products to foreign countries to earn China the much needed foreign exchange.
The economy has always been changing rapidly due to various developments and transformations witnessed both in Chins and around the world. The period between 1980 and 2010 saw China record large increases in population, which meant that the government and other stakeholders had to go to the drawing table to draft new strategies to ensure food security in the local setting (Wouters, 2012). It was argued by various economists that it was only through meeting local demand for agricultural products that will pave the way for increased participation in the global market. The demand and supply for food have almost been nearing the same mark thus prompting the stakeholders to react by devising modern mechanisms of ensuring productivity.
The agricultural strategies that have been implemented include use of modern methods of farming based on scientific principles and methods where thorough research activities and use of modern technology are incorporated in the sector. These reforms have had both their advantages and disadvantages to the economy as a whole. Among the reported disadvantages is the idea of enhancing a surplus in the demand and supply equation (Findlay, & Martin, 1993). The surplus has been cited as a blessing in disguise since it has majorly been occurring at the low-income level thus making it to be a structural problem to the economy.
The shortage of agricultural produce to feed the ever increasing number of industries under the industrialization process of china has led to a new thinking among the government and private stakeholders (Findlay & Martin, 1993). The outcome of the new deliberations that the government has been engaging farmers, experts, and other interested parties have led to the decisions that have enhanced the conducting of strategic adjustment in agriculture. These decisions are targeting to have improvements in the quality ...