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The Economic Role Of Agriculture In China

The Economic Role Of Agriculture In China

The “Chinese economic miracle” seems to have caught the world’s attention, especially about production,

manufacturing, sourcing, FDI inflows into China, and so on. But do we know the largest sector of the Chinese labor

market: the agricultural sector?

The Economic Role Of Agriculture In China

The Economic Role Of Agriculture In China
The Economic Role Of Agriculture In China

The People’s Republic of China inherited a country in ruins, exhausted by man-made disasters such as warlords, civil

wars, occupation, and natural disasters, droughts, famine, and floods.

During the Mao era, the Chinese government carried out far-reaching land reform in rural areas. Farmers with little

or no land were given the land of their own, significantly sparking their enthusiasm for production. In general, in the

Mao period, China’s agriculture developed slowly, with some golden times like 1953-57, when gross annual

production increased by 4.5% on average.

Under Mao, the conceptual role of agriculture was imperative. The Chinese farmer was the equivalent of the Soviet

blue-collar proletarian, so the importance of farmers in the class struggle was paramount.

After 1978 and under the reforms, China introduced the system of responsibility for domestic contracts, linking

remuneration to production, and began to dismantle the system of popular communes, eliminating the contracting

land from farmers altered the way land was distributed and mobilized farmers’ enthusiasm for production. As a

result, during the six years following 1978, agricultural production grew more than twice as fast as the average

growth rate during the previous twenty-five years.

The Economic Role Of Agriculture In China

The Economic Role Of Agriculture In China
The Economic Role Of Agriculture In China

The reforms made the market play a key role in adjusting the supply and demand situation for agricultural products

and in allocating resources and sparked the creativity and enthusiasm of farmers for production.

In general, the reformist push in China’s economic policy since 1978 has benefited agriculture, as it has benefited the

economy in general. However, after 30 years of reforms, the sector continues to lag behind most other sectors of the

Chinese economy.

The economic and political role of agriculture in contemporary China –

1. Food safety. In an extremely large and populous country like China, the concept of food security is of fundamental

importance. The task of feeding its people has perhaps been the priority of its rulers throughout history.

2. Political and social stability. China’s farmers are known to have a “rebellious spirit”, which is well documented in

history books. When famines, wars, or other extreme conditions occurred, China’s farmers, who used to be the

majority of the population and are still the largest group of people in China, decided to attack. Therefore, there is a

consensus that there is no stability without farmers/agriculture, and to avoid “da luan” – great chaos, farmers must

keep calm and content. Still today, China’s farmers are the largest, albeit an underrepresented, group that holds the

keys to stability in China.

3. Employment tool. On the one hand, there is a huge scale of surplus labor in the agricultural sector, which

generates underemployment or even unemployment. On the other hand, agriculture remains the main sector

responsible for the employment of food and, consequently, for maintaining the social and political order of about

60% of the population of China.

The Economic Role Of Agriculture In China

The Economic Role Of Agriculture In China
The Economic Role Of Agriculture In China

4. Participation in GDP. The reforms of the early 1980s initially increased the relative share of the agricultural sector.

The share of agricultural production in total GDP increased from 30% in 1980 to 33% in 1983. Since then, however,

the share of agriculture in total GDP has declined fairly steadily, and in 2003 it was only about 10%. 14%. These

figures indicate a relatively small share of the agricultural sector, although noteworthy in the overall performance of

the Chinese economy.

What are the main obstacles to the agricultural sector in China?

1. Natural resources and disasters. At the beginning of the 21st century, China still has to face and cope with several

serious ecological/environmental problems, some are the result of human error and others are simply the result of

the course of “mother nature”. The main problems are the supply of water, that is, scarcity, waste, and quality. In the

agricultural context, it is likely that the

The Economic Role Of Agriculture In China
The Economic Role Of Agriculture In China

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