The New Course in Chinese Agriculture

Abstract

China's current reform program in agriculture is enormously ambitious in intent and highly significant for all aspects of future economic and political development. It represents a rejection of past policies of large-scale labor mobilization and communal self-reliance in favor of commercialization and individual incentives for peasants. Diversification of the rural economy, decentralization of farm management, production specialization, crop selection in accord with comparative advantage, expansion of free markets, release of labor from the land, and a shift toward household-based, rather than collective, cultivation have all been important elements of the new line. The resultant explosion of pent-up rural entrepreneurship, fueled also by marked state procurement price rises, produced dramatically positive effects on overall productivity, peasant incomes, and standards of living. These led to widespread introduction of even more radical reforms. The recent agricultural boom will be difficult to sustain, however, without worsening China's already serious budget and finance crisis. Today's leadership coalition also faces intrabureaucratic opposition from cadres at all levels who are threatened by the reorganizations, and widespread popular unease about new patterns of social inequality that may accompany greater reliance on market relations. Decentralized management, a wider role for the market, and the vigor of new commercial combines also appear to be hampering the ability of central planners to regulate the economy. Such factors are capable of producing their own political backlash. The new course is, therefore, still a risky gamble in search of a workable balance between plan and market, growth and equality, national priorities and local demands.