Diversification and Sustainable Development in Chinese Agriculture

Abstract

Feeding a growing population exceeding 1 billion is a big challenge to the Chinese government and has partly led to the self-sufficient policy in grain production and supply for decades. However, the efforts to push grain production everywhere have resulted in not only deterioration of the environment but also stagnation or even reduction in farmers' income as production costs continue to increase. This situation might be worsening after China's accession to the WTO that provides market access for bulk commodity imports. A sustainable development in Chinese agriculture depends on diversification, or structural adjustment, that allows Chinese farmers to fully utilize their comparative advantage in production of labor-intensive goods. Past experience has shown that diversification has contributed more than a half of the growth in Chinese agriculture during the reform period and reduced stresses on the environment at the same time. It is likely to contribute even more to Chinese agriculture in the future and in a sustainable manner.