Agricultural change

Woman working in the rice fields of Longsheng, China
Woman working in the rice fields of Longsheng, China

In China around 275 million people work in agriculture (30 per cent of all workers) compared to less than 300,000 people (less than one per cent of all workers) in the UK. By 2020 the Chinese government aims to move a further 100 million from rural to urban areas (250 million by 2026) under the National New-type Urbanisation Plan.

In the UK, agricultural output is less than 1 per cent of GDP but in China it is worth around 10 per cent of GDP. China produces more farm produce than any other country in the world. Rural incomes in China are very low and are, on average, under a third of urban incomes at around $1,400 per year (2014).

The Household Responsibility System

In 1978, Deng introduced the Household Responsibility System (HRS) for agriculture which remains the basis of Chinese agriculture today.

Under Mao, farms were run as collectives. There was little financial incentive to work hard and so agricultural output was low. The HRS allows farmers to work the land as owners and to make a profit. Farm output has increased. Today food shortages are much less of a threat to China than they were in the past.

With the freedom to develop their farms and sell their produce in the marketplace, the income of farmers has risen. Most farmers remain relatively poor compared to urban Chinese but a few farmers have become very wealthy.

Agricultural problems

In China only around 15 per cent of the land is suitable for farming. As the cities have expanded the amount of available land for farming has shrunk. The authorities are determined that China remains self-sufficient in food but they face the problem of a return to food shortages in the future.

Until recently, the authorities were keen to move farmers off marginal farms, such as in arid areas, where food production was low. The plan was to return the land to a more natural state and to plant more trees to offset China's huge carbon emissions.

In some parts of China there has been a growth in organic farming that is sustainable and not environmentally damaging. But with a wealthier population consuming more red meat and vegetables, many of the plans for reforestation or environmental protection have been suspended. China authorities also have concerns about the growing level of subsidies (over $165 billion in 2012) handed out to farmers.

Town and village enterprises

How TVEs work from  small agricultural businesses to possibility to be privatised and exported

As rural incomes are low many people supplement their earnings from agriculture by working in Town and Village Enterprises (TVEs).

TVEs are most often small scale businesses (of less than five people) either run as private companies or as village collectives. These businesses produce everything from agricultural by-products (fertilizers, animal feeds, etc) to lollipops for sale in the cities. A few TVEs export their products.

Until a few years ago, TVEs employed as many as 30 per cent of the Chinese population and produced 34 per cent of China's GDP. Many TVEs have now been bought out (privatised). Others have been unable to survive in the increasingly competitive Chinese economy.