The International Experience of Industry Nurturing Agriculture and China’s Path of Policy Adjustmen - 中欧社会论坛 - China Europa Forum

The International Experience of Industry Nurturing Agriculture and China’s Path of Policy Adjustmen

Authors: Ma Xiaohe et al

Extract from ” Management Worldly (Monthly), 2005“

The relationship between industry and agriculture in the industrialisation process should be divided into two stages: industry to complement agriculture, and agriculture to complement industry. Industry started supporting agriculture in the middle of the industrialisation process and continued into later stages of industrialisation. The supporting of agriculture during the mid stages of industrialisation can be categorised into the turning point and the point of large-scale support. However, the national economic structural features of the turning point of industry supporting agriculture did not have a strict, unified, clear and objective universal international standard. Only by looking at major countries and areas which have successfully industrialised can some universal experiences be concluded for future reference. To determine if a country’s industry is supporting agriculture and what methods and to what extent it is doing so, in addition to referring to the national economic structural features, it also depends on factors such as the country’s social economic environment, agricultural resources, the policy path dependence, policy decision-making preferences, as well as the strength of the interest groups for urban and rural areas. International experience has made it clear that the policy objectives of the support policy during the turning point focus are of increasing agricultural output, highlighting the status of food security; the intensity of support is low and its range is smaller, forming a very small degree of support; the core of the policy instruments is to support production, ensure stable prices and protect tariff; and for newly industrialised countries and areas to start implementing certain agricultural support policies before countries which were industrialised earlier. The goal of a large scale support is to see a long-term rise in agricultural production capacity, and to increase rural income as well as to protect the environment; types of policies will begin to increase, their intensity will rise and the scope is widened, forming a wider range of support; policy instruments will focus on land and other infrastructure investment, subsidies on agricultural production means, credit facilities and price support; and countries and regions with shortage of resources will improve enhance the scale of land management, whereas countries with rich resources will start to protect their production capacity.

Since the reform and opening up, especially since entering the 20th century in the 90s, China’s economy has maintained rapid growth. The social economic structure has undergone massive changes and entered the mid-stage of industrialisation in 1997. According to international experience, following the introduction of the next step of industrialisation, the relationship between industry and agriculture will experience a turning point. The development of economy will also enter the stage where industry complements or supports agriculture. Through the calculation of major indicators such as per capita GDP, the proportion of agricultural GDP, industrial structure, employment structure, urbanisation, the Engel coefficient and the proportion of agricultural tax revenue accounted for in 2003, as well as making a comparison with internationally comparable indicators, it can be seen that China’s economic development has entered the stage where industry complements or supports agriculture and has overcome that turning point, moving towards a large scale process of industry supporting agriculture. However, it is still a far cry from a comprehensive, large scale support period. Therefore, it is imperative to raise awareness and to value agriculture, a vulnerable industry, as well as rural residents, who are a vulnerable community; to appropriately adjust national income distribution and to increase the strength of financial input for agriculture; to implement agricultural subsidies gradually and with focus; to strengthen the establishment of systems, providing system security for the support of agriculture by industry and for the adjustment of the national economic structure; and to make clear division of duties in the process of industry supporting agriculture at all government levels, based on local conditions.


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