(From Scientific American, November 1996)
When the Venetian explorer Marco Polo brought back wheat noodles from China, he introduced Europeans to a new and popular dish that was also a product of the era's most sophisticated agricultural system. In the 13th century Chinese farmers relied on advanced irrigation systems and innovative double cropping techniques to provide food for more than 100 million people. Rice and wheat were abundant.
Today China is faced with the daunting challenge of feeding 1.2 billion people 22 percent of the global population and only 9 percent of the world's arable land. (Despite the country's geographic expanse, much of the western part is desert and unfit for agriculture.) The most recent estimates suggest that China's fertile land covers 130 million hectares only 0.11 hectare for each person in China, compared with 0.73 hectare for every American. Moreover, in the past few years, China's population has been increasing by about 14 million every year. As the steadily expanding urban population encroaches on rural areas, the amount of land available for agriculture has decreased annually by about 400,000 hectares.
In light of these factors, as well as the news that during the past 10 years China's grain production per person has reached a plateau, some observers have painted a gloomy picture for the future of China's agricultural system and the country's ability to feed its citizens without buying massive quantities of foreign grain. In 1995, for the first time in decades, China began importing more grain than it exported. Although the country can afford to purchase large quantities of food from abroad thanks to its healthy economy, escalating demand on world markets could raise prices to such a level that other developing countries might not be able to procure the food they need.
Not surprisingly, many economists and policy makers around the world have recognized the importance of improving China's agricultural system. Chinese leaders have publicly stated that the country must become self-sufficient in its production of grain, for reasons of both social stability and national security. But can China feed itself? With this question in mind, we have, over the past nine years, traveled approximately 35,000 kilometers across the Chinese countryside, through most of the main agricultural regions, interviewing more than 500 families. At each stop, we wanted to hear from the farmers themselves about what might help them generate more and better crops to feed China.
In particular, we wanted to learn how the farmers might be able to achieve three goals we believe must be met if China is to become self-sufficient. First, the farmers must augment their current output per hectare. Second, they need to develop unused land into farmland. And finally, they must slow or stop the destruction of existing farmland. Fortunately, as our research shows, these three goals are intertwined and can be addressed with a common solution: policy changes that grant farmers more secure rights to their land
A History of Turmoil
Since 1949, when the Communists took power, China's agricultural practices and system of property ownership have undergone several turbulent changes. Before the revolution, many Chinese farmers were poor tenants who tilled fields owned by wealthy landlords.
Soon after Mao Tse-tung's peasant army conquered China, however, the government confiscated the holdings of landlords and wealthy farmers and distributed the property among all farming households on an egalitarian basis. The new land owning families operated small, independent farms and sold their harvest on an open market. For the first time in recent Chinese history, the dream of "land to the tillers" was a reality. Farmers responded to the new system with extraordinary zeal: grain production went up by about 15 kilograms per person each year between 1949 and 1955.
In the 1950s, under the influence of the Soviet system, Mao became imbued with the ambition to build a powerful nation under a planned economic system. As a result, China gradually began to collectivize its agriculture. The government encouraged farmers to form groups known as mutual aid teams in the early 1950s; these teams consisted of no more than 10 households and served to coordinate the farming practices of the members. Property rights did not change, however each family retained ownership of its plot. Later, during 1956 and 1957, the government further consolidated farms into agricultural collectives, each one with as many as 300 households. In this case, members actually had to surrender most of their land to the collective, although they could keep small private plots for growing food for the family.
The process of collectivization culminated in 1958, when the agricultural collectives merged into huge communes. These communes, each with an average size of about 4,000 families, took sole ownership of all property, including the private plots. All the farmers worked together on the land, receiving pay for time spent in the field, no matter how little they accomplished. And everyone shared the excess harvest. Under this system, none of the farmers had an individual stake in the land, so few cared about making improvements in effect, the communes severed farmers from their land.
The result of collective farming was disastrous: in perhaps the world's worst famine, an estimated 30 million Chinese died between 1959 and 1962. The communal farms simply did not generate enough food for the country. In the 1960s the government broke up the communes into more manageable units. But collective farming continued on a smaller scale through the late 1970s, when some Chinese leaders started to rethink its viability.
The brainchild born of this rethinking was the policy known as the Household Responsibility System. This policy divided the collective land among individual households, creating a nation of small family farmers. The collective, however, maintained official ownership of the property. Initially, the farmers' rights to the land were to be valid for up to three years, but in 1984 the Communist Party ordered local officials to extend contracts to 15 years. In return for the right to work the land, farmers had to sell a small portion of their crops to the state at a fixed price. But they could keep the rest of their harvest, either to consume or to sell for a profit. The system clearly encouraged farmers to become more efficient: between 1980 and 1984, grain production increased by 16.2 kilograms per person each year, up from an annual average increase of 1.3 kilograms per person between 1955 and 1980.
Unfortunately, the momentum behind agricultural expansion has slowed considerably since then. Between 1984 and 1993, grain production increased by only 2.9 kilograms per person each year. Although the basic guidelines of the Household Responsibility System have not changed in the past few years, farmers appear to be less motivated than they were only a decade ago
An Uncertain Future
To generate more food for China, farmers must once again boost their output. Exploring possible ways that they might raise their efficiency, we surveyed hundreds of farmers throughout China. We visited farms away from large population centers and primary roads, randomly selecting people to interview. We typically visited one household at each stop, although our interviews often attracted people from nearby farms. To ensure spontaneity, we did not give farmers advance notice of our visit. We also took extra measures to avoid the company of local officials so that we could obtain candid responses to our questions. Typical interviews were relatively informal and lasted from one to two hours; we usually conducted four or five interviews with different farmers each day, talking with them out in their fields or in their houses and courtyards.
The people we interviewed confirmed that they do indeed appreciate the innovations of the Household Responsibility System. Families now produce much more per hectare on their small, intensively worked farms than residents of the former collectives ever did and they are living much better as a result. Even on these small plots (the average farm is just slightly larger than an American football field), the typical household enjoys a new brick home, consumes an adequate diet and can afford amenities such as a television.
The families also have more leisure time to enjoy these benefits. Farmers now spend far less time in the field than members of the collective did. Workers were in the collective fields for 250 to 320 days a year; in contrast, the same family members now spend between 60 and 90 days a year on their individual share of the same land. Many farmers told us that in the past, much of their time was spent, as one man put it, "leaning on my hoe." Such featherbedding has disappeared on today's farms. The families we talked to unanimously agreed that the policies implemented by the Household Responsibility System have improved their standard of living.
Chinese farmers achieved this efficiency under the new system by making relatively small but crucial modifications to their techniques. For instance, they became more assiduous in weeding, used better seed, applied fertilizer more carefully and timed more precisely such activities as sowing, transplanting, irrigating and harvesting. These practices delivered better crops almost immediately. But further gains in crop yields one of three goals to be met to ensure China's self-sufficiency will be far more difficult to achieve. Farmers must start making extensive long-term investments in the land, such as better irrigation families more effective drainage systems, improved land terracing and leveling, as well as significant soil upgrades.
There is considerable room for improvement: some two thirds of China's current farmland is underutilized, offering low crop yields as a result of poor land quality and insufficient irrigation. Many agricultural scientists in China hive concluded that farmers could obtain crops two to three times larger than what they currently harvest. The farmers we talked to also acknowledged that the land could afford much larger yields. Yet few of them had made any major alterations to their plots, even though they all knew that such changes would boost their output.
The farmers' reluctance to sink money and labor into any extensive modifications can be directly attributed to their underlying fear that they may not be able to hold on to their property long enough to realize a return on their investment. (In contrast to the changes already made, the costs of which were recovered quickly, the next phase of improvements will take many years to pay for themselves.) Back in 1984 the central government ordered that land contracts be extended for 15 years, but local officials have not implemented this policy to any significant degree. Indeed, very few farmers even possess written contracts granting them the right to tend a specific plot. And when they do obtain a contract, the expiration date is often left blank, so the term may change without warning, or the contract may be terminated far short of what was originally promised.
Dismantling the Family Farm
A farmer's landholdings may be broken up for a variety of reasons. For example, in many villages, representatives from the collective take back all the land in the village every three to six years and reallocate the plots. Households in which someone has recently moved away or died receive a smaller portion of land, and families that have increased in size acquire a larger share. This procedure, a remnant of the absolute egalitarianism emphasized during the collective period, not only discourages farmers from making long-term investments in their land, it also undermines China's family-planning policy by encouraging farmers to have more children. Most of the farming families we interviewed favored a different approach to redistributing land among farmers: voluntary sale and purchase of perpetual-use rights to a parcel of land. Although current law does allow farmers to transfer their land rights, few are willing to purchase rights that are so tenuous. As a result, the market in rural land rights is essentially inactive.
The government can also readily reclaim land for such nonagricultural purposes as urban or industrial development. Farmers are rarely if ever consulted in such events, known as takings, and they generally feel powerless to prevent them from happening. Furthermore, farmers are almost never adequately compensated for the land, let alone for any improvements they might have made. For instance, when a state-owned factory wants additional property to expand its operation, the factory manager negotiates with a representative of the collective. This representative has only a limited concern for the land, and the farmer who does have a substantial interest in the transaction and is left entirely out of the loop.
Such land takings contribute to farmers' insecurity regarding their rights and at the same time eliminate valuable expanses of fertile soil. China must protect its existing farmland from industrial and urban encroachment if it is to achieve agricultural self-sufficiency. Senior government officials have recently issued a number of appeals against the taking of arable land for other uses. But because local officials can secure great sums of money by selling land rights, they often ignore or circumvent the central government's instructions. And, according to the households we talked to, once property has been reallocated to other families or reclaimed by the government, farmers have no effective means of legal redress.
The situation can be remedied, however. For instance, companies that wish to acquire land for commercial purposes could be required to seek the farmers' consent and to pay full market value for the land. Farmers could also negotiate directly with local officials for standard levels of compensation when property is reclaimed for other public purposes. (And of course, the bulk of the compensation should be given to farmers; today the money almost always goes to the collective.) Increasing farmers' participation in the taking process, together with more effective planning for the use of land, would help protect against further loss of agricultural land.
Fundamentally, though, China's farmers want more than just improved rules for land takings. They want longer and more secure rights to manage their small plots. Theoretically, current land- use rights extend for at least 15 years; most farmers favor land rights that are perpetual, can be inherited and cannot be reallocated when the household's size changes. More than 80 percent of the farmers we interviewed indicated that they would be willing to invest in their land if they were assured of having permanent access to it. Notably, perpetual land-use rights can be granted even if the collective maintains formal ownership of the land.
With longer and more secure rights in place, farmers would also begin to cultivate undeveloped land - another important step toward achieving agricultural self-sufficiency. China's Ministry of Agriculture estimates that the country has at least 33 million hectares of wasteland that could be converted into grain growing farmland, as well as vast acres that could be transformed for growing fruit trees, medicinal herbs and other cash crops. Such a change, of course, would require significant investment investment that farmers would make if they felt their property rights were secure. The central government has begun to make efforts in this direction.
Several years ago officials auctioned off land-use rights with terms of up to 100 years to non cultivated land in Shanxi Province; 17 other provinces have since followed this lead. We have interviewed farmers in Shanxi Province who purchased 50- to 100-year rights to noncultivated land, guaranteed by a detailed written contract. These farmers have made substantial investments of both cash and labor to develop this land. But in contrast, the same people described to us their unwillingness to make similar expenditures on their other plots because their rights to that land were so tenuous.
Continued efforts to strengthen farmers' land rights must go beyond mere policy pronouncements from Beijing. And the experience in Shanxi Province demonstrates that this goal can be achieved. To enforce new procedures, the government will have to establish the rule of law in rural land transactions as a countermeasure to widespread abuse of power and repeated violations of contracts by local cadres. We recommend, for instance, that the government at the county level or above issue uniform land- use certificates and written contracts specifying the length of time covered and all the rights and obligations of both individual land users and the collective owners. It should also conduct a massive public education campaign to inform farmers of their rights and obligations. In addition, the government should institute a better system at the local level for resolving disputes over land rights.
The government has tentative plans for a pilot project, encompassing two counties in Fujian Province and Shaanxi Province, that would test the practicality and effects of changes similar to those recommended above. Although the final details have yet to be agreed on, we expect the project to begin within the next few months. The proposal would extend land-use rights for up to 75 years for existing farmland and 100 years for usable wasteland, end land readjustments for changes in household size and provide written land contracts to all farm households. The plan would also implement new rules for land takings, land-use planning and the resolution of disputes.
Hope for the Future
A Are there other remedies that could encourage investment in China's farmland or otherwise increase agricultural production? Some policymakers have argued that improved seed and fertilizer would boost efficiency, as would higher grain prices. Although such ideas could help, our fieldwork suggests that such steps would be peripheral at best.
Novel fertilizer and seed would most likely provide few benefits in the absence of other improvements, such as better irrigation, that farmers are unwilling to pay for right now. Higher prices would increase farmers' profits, conceivably enabling them to invest more aggressively in their land. But without secure land use rights, farmers would still base their financial decisions on whether they would have time to recover the costs of their investments. Moreover, increasing grain prices will require substantial government outlays.
Another widely discussed strategy for enhancing agricultural output in China could in fact have the opposite effect. Some Chinese officials have proposed a return to large-scale farming based on the assumption that bigger farms would have a stronger financial position and better access to current technology than small family farms. Proponents also assert that productivity would rise if property were consolidated and managed by a few very proficient farmers. Although large farms exist in other countries -notably the U.S., where the average farm encompasses about 190 hectares - their prospects in China appear to be quite different.
Evidence from around the world demonstrates that smaller farms are typically more productive than larger farms. The expansive plots in the U.S. have led to agricultural prosperity not because of their size but rather because of the unique land, labor and capital resources available. Large farms generally employ less labor and utilize more capital per hectare than small farms do. China's countryside, however, has abundant labor and little capital. Thus, employing large numbers of workers to manage limited hectares of fertile ground makes sense given the circumstances in China. If agriculture is modernized so that one person with high tech machinery can manage land previously farmed by 10 people, the other nine must find a job elsewhere. China already has a serious problem of rural unemployment and cannot afford even more surplus labor. In any case, as history indicates, farm size should not depend on administrative fiat but should evolve voluntarily as less interested or less capable farmers, with widening prospects away from the family farm, sell their land rights to those who want to work the land.
Fortunately, the Chinese government seems intent on continuing what has been, since 1980, a fairly sensible reform of the country's agricultural system. In 1995, for instance, the Chinese State Council announced that land rights would be extended for another 30 years. More important, the council's ruling should help put an end to the practice of reallocating land for changes in household size. The council also reiterated that land-use rights may be transferred for compensation and are inheritable. In addition, it called for strict punishment of officials who wrongfully attempt to terminate new contracts. But practical measures for enforcement of the council's directive must be tested and put in place. The Chinese government appears willing to give people greater control over the land they farm; only if it succeeds in implementing these reforms will China be assured of its ability to feed itself in the next century.