The Agricultural Sector in China: Performance and Policy Dilemmas during the 1990s

Abstract

The varied experience of China's agricultural economy during the 1980s highlights the challenges and opportunities facing the farm sector during the present decade. Until 1985 agriculture's performance was widely regarded as an unqualified success. Decollectivization and institutional initiatives provided a framework which allowed, for the majority of farmers, an unprecedented degree of independence in decision-making. Farming was once more practised on a household basis, peasants' activities were increasingly geared towards market signals and their economic relationship with the state defined by legal contracts. Large increases in the purchase prices of major farm products provided the material incentive for the expansion of all branches of the agricultural economy. These same increases were the source of substantial gains in income, which contained the wherewithal for large-scale investment in agricultural production.