What to Do If No One Farms the Land in Rural China? Causes and Countermeasures Explained
Agricultural crop rotation and land fallowing are conducive to the sustainable development of agricultural production, so a large amount of farmland is a good thing. However, the fundamental way out for agricultural economic growth is to replace labor with capital; therefore, we need not lament the growing number of "hollow villages," nor celebrate increases in land rent rates and land prices.
China's economic growth is a necessity for liberating the productive forces, and also a necessity for human emancipation. From the perspective of the actual economic structure, achieving this goal requires integrated urban-rural development, and urban-rural integration must be led by urbanization. Now that the foundation of national industrialization has been laid, the layout of cities, the hierarchical gradient of city sizes, and the incremental adjustment of urban functions must take rural modernization as the primary constraint. Only in this way can China's urbanization reflect the requirements of the humanist principle.
The fundamental characteristic of China's resource allocation adjustment is that, guided by the signal that cities lack cheap labor even more than rural areas do, cheap rural labor flows continuously into cities. This is the main factor behind the improvement in China's resource allocation efficiency. Over the past 30-plus years, China's rapid economic growth has benefited from urbanization, and in the future it will still rely on the power of urbanization to achieve sustained economic growth. Urbanization is the engine of economic growth during China's transitional period. The fundamental goal of urbanization is for the nation to achieve modernization on the basis of sustainable development. Doing this well will facilitate China's modernization transformation; if deviations occur, it will delay development and cause waste.
Urbanization is the result of markets and professional division of labor mutually reinforcing each other. Having practitioners gather in cities to engage in economic activities is the main way to reduce transaction costs. Given that China cannot construct a modern social division-of-labor system on the basis of 3 million natural villages, we must therefore achieve integrated urban-rural economic and social development on the basis of advancing urbanization, rather than on the basis of retaining a huge rural population. The government spends money building a "new countryside" so that farmers are happy to stay in rural areas and enjoy their own lives, but by no means so that more farmers will stay in rural areas.
Technological progress in the most important links of the modern agricultural industry chain is achieved by relying on cities. In fact, in the modern agricultural economy, the contribution of technology and capital to agricultural output far exceeds the contribution of land and labor. After World War II, the world's total agricultural output increased severalfold, while land basically did not increase, and the agricultural labor force shrank dramatically. This shows that the main contributing factors to agricultural economic growth come from technology and capital. This result manifests as a decline in land rent rates and a relative decline in land prices. Seed breeding, fertilizer research and development and production, and agricultural equipment research, development, and manufacturing, which make huge contributions to agriculture, are all accomplished by relying on cities.
In countries with relatively sound land markets, land prices are much lower than we imagine. When the author visited Poland, he learned about some land price conditions there. One hectare of poorer farmland is about 4,000 euros, equivalent to 2,700 yuan per mu; while better farmland is equivalent to 14,000 yuan per mu. Construction land designated by planning in rural areas is also not expensive, working out to about 130,000 yuan per mu.
Agricultural crop rotation and land fallowing are conducive to the sustainable development of agricultural production, so a large amount of farmland is a good thing. However, the fundamental way out for agricultural economic growth is to replace labor with capital; therefore, we need not lament the growing number of "hollow villages," nor celebrate increases in land rent rates and land prices.
Urban-rural integration mainly refers to achieving unification of urban and rural factor markets between urban and rural areas, that is, apart from allowing a certain minimal degree of government intervention involving important public social interests, the existing barriers between urban and rural areas regarding factors such as land, capital, and labor should be broken down, and the decisive role of the market in factor flows should be maximized.
The emergence of cities is related to war and trade. After the Industrial Revolution, cities also became a condition for industrial growth. What people overlook is that agriculture also has an influence on urban layout. In regions closer to cities, the level of agricultural development is higher. In the period ahead, China's population distribution will continue to change, but several key factors may play a role at the inflection point of the rate of change.
First, the existing distribution and size of cities. The existing urban structure is not a relatively stable structure, but this structure will have an important influence on future urban development. China's continuously rising urbanization rate is indeed a major event in human history. However, a major flaw in China's urban development is that it has become detached from the needs of agricultural development: large cities conducive to industry and commerce have grown rapidly, while small cities needed for agricultural progress have languished. We cannot overturn the existing urban pattern, but in future incremental adjustments we must attach importance to the development of small cities.
Second, the incomes of specialized farmers remaining in rural areas being broadly consistent with those of urban residents is the most important factor. According to our estimates, when the number of specialized farm households nationwide reaches about 30 million, that is a threshold point; after this point, the incomes of urban and rural residents can largely be made basically equal.
Third, from the perspectives of public services, transportation structure, and information exchange, on average about one city is needed per 1,200 sq km. About 4 million sq km of mainland China is suitable for human habitation and has the conditions to develop competitive agriculture. Considering rural roads and public bus service times, at least one city per 1,200 sq km would be beneficial to agricultural development; thus, China needs at least 3,300-plus cities.
Fourth, counter-urbanization population. Judging from the situation in which Chinese farmers still largely live in villages after having left agricultural production, the counter-urbanization population determined by historical factors has already reached a huge number. Taking the non-agricultural population living close to agricultural areas as the counter-urbanization population, and considering a series of factors, it is estimated that when the scale of China's future non-agricultural population living in rural areas reaches about twice that of specialized farm households, there will be a stable state, that is, reaching about 60 million households.
Fifth, education and school establishment factors. The establishment of rural schools is of key significance for achieving equalization of basic public services between urban and rural areas and eliminating the intergenerational inheritance of poverty. Considering this factor, in the vast majority of China's rural areas, 30,000 primary schools need to be built to high standards. This also means that rural areas need at least 30,000 large residential settlements, with the rest being smaller residential points for specialized farm households.
Based on the above assumptions and inferences, a relatively stable future population and urban layout can roughly be sketched out. A total population of 1.5 billion is estimated to be a relatively stable population scale for China over a certain period. If there were such a population and urban layout, China's agriculture would be better, rural education would be better, and it would be conducive to agricultural modernization and social stability.