24 August 2019
China is producing too much low-quality produce and an inadequate amount of high-grade stuff the market wants.Photo: China Daily
China is producing too much low-quality produce and an inadequate amount of high-grade stuff the market wants.Photo: China Daily

Why China’s bid to improve agriculture is a losing battle

Recently, the Central Committee of the Communist Party of China and the State Council jointly issued the so-called “Document No.1”. (Editor’s note: “Document No.1” refers to the first major policy document issued by the CPC leadership at the beginning of each year that often sets the tone for major policy issues.)

Titled “On deepening the structural reforms of the supply side of the agricultural sector and enhancing the momentum of the development of the rural areas in China”, the document includes six sections and 33 articles that address a wide variety of issues ranging from boosting agricultural output and enhancing infrastructure development in rural areas to fostering the export of China’s agricultural produce.

Articles 7 and 8 propose that the mainland take advantage of Hong Kong’s status as an international trade and financial hub to facilitate the export of China’s agricultural produce and to arrange financing for state-owned agricultural enterprises through the stock exchange.

Since 2004, the Chinese government has issued for 14 consecutive years Document No. 1 specifically dealing with agricultural issues, indicating that the Communist Party attaches great importance to the overall development of agriculture and the enhancement of GDP per capita in rural areas.

However, 14 years on, it appears the party is still wrestling with the problems in the agricultural sector.

Even though the economic reforms unleashed by former paramount leader Deng Xiaoping in 1978 have succeeded in eradicating extreme poverty and hunger in the rural areas across the nation, the focus has been entirely on boosting volume.

The amount of agricultural output has been continually on the rise since the late 1970s but Chinese agricultural produce has been notorious for its poor quality, not to mention the rampant use of banned insecticide which has raised widespread concern about the safety of crops grown in China.

Poor quality means Chinese produce can hardly compete in the international market; weaker economic growth in some of China’s export destinations has worsened the situation.

China is producing too much low-quality produce and an inadequate amount of high-grade stuff the market wants.

Overall crop prices are capped but costs have been creeping up, taking a serious toll on the income of peasants and fuelling grievances among the rural population.

It is against this background that Document No.1 issued this year calls on party officials at the provincial, county and village levels to embark on a nationwide initiative to boost the quality of the country’s agricultural produce and develop high value-added agriculture such as tea cultivation and traditional Chinese herbal medicine.

The fact that the Communist Party has been struggling to improve the agricultural sector for 14 years indicates the sheer magnitude of the problem.

Ironically, many of these problems, such as poor quality control, lack of regulation and oversight, as well as low cost-effectiveness, actually have their roots in the government itself.

China’s government has invested too little in agri-technology and related infrastructure. The education level of farmers is also generally subpar.

Rampant pollution and corruption, lack of oversight or governance at the rural level and poor protection for the rights of peasants have added to the woes.

While technology is important, unless the government can faithfully introduce the rule of law into rural areas and reestablish its credibility, it is simply fighting a losing battle.

This article appeared in the Hong Kong Economic Journal on Feb. 9

Translation by Alan Lee with additional reporting

[Chinese version 中文版]

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