The dilemma of farmers' income growth has remained unchanged for 20 years, experts say agricultural policy lags behind
Expert: Agricultural policy lags behind, farmers' income growth dilemma unchanged for 20 years
(Agricultural Wealth Network) Li Changping is an expert on the "three rural issues" (agriculture, rural areas and farmers). In 2000, he rose to fame overnight by submitting a letter to the central government reflecting on the three rural issues. In Li Changping's view, the biggest problem with Chinese agriculture today is that the "company + farmer" model allows big capital to capture the majority of the gains in the agricultural industry, rather than the farmers.
Li Changping divides China's agricultural development into four stages. He believes Chinese agriculture has long passed the stage of mere food sufficiency and has begun to enter the stage of "pursuing price growth returns," that is, the stage of increasing farmers' income. But this second stage has lasted for more than 20 years without producing results. He attributes the cause to agricultural policy being out of step with actual conditions: "Our agricultural policy is still stuck in the first stage, still pursuing output - increasing production without increasing income."
Petrochemical agriculture will continue
Li Changping's home is by the edge of Hong Lake. During the commune period, his parents fished in Hong Lake year-round, catching tens of thousands, even over a hundred thousand jin a year. His older sister farmed in the production team, with rice yields of about 450 jin per mu. Now, very few people in Hong Lake make a living by fishing, and rice is rarely planted anymore, because the returns from grain cultivation are too low, and the land is basically all used for aquaculture.
Chemical fertilizers and pesticides began to be used in the late 1970s. Grain output went up, but the fish in Hong Lake grew fewer and fewer as industrial and agricultural pollution intensified. Li Changping says petrochemical agriculture does have an impact on the environment and is harmful, but grain output is higher than before. The natural fish are gone, but farmed fish have increased. "This depends on what people actually want, and how to pursue the benefits while avoiding the harms - we need to find a balance point."
Reporter: In recent years, some researchers have proposed the idea of agricultural diversification and integration with ecology, beginning to reflect on the past few decades of relying solely on petrochemical agriculture to increase output. What is your view?
Li Changping: Petroleum agriculture and chemical agriculture will continue. But petrochemical agriculture, genetically modified agriculture, energy agriculture, factory agriculture, along with ecological agriculture, organic agriculture, courtyard agriculture and cultural agriculture will develop simultaneously, and agriculture will become increasingly important. Agriculture will ultimately be influenced by the trend of "weaponization of agricultural products" as well as demand, ecological and cultural factors, forming a scientific, harmonious, diversified and sustainable model of agricultural development.
Reporter: Petroleum and chemical agriculture will continue - how do you explain that?
Li Changping: This kind of agriculture that pursues output will certainly continue, because the population is growing, and demand for agricultural products and energy is growing. For example, in the future we will use corn and other agricultural products to produce alcohol. Agricultural products are already linked to energy, so pursuing high output is certain - this will not change.
As for making food safer for people to eat, that is a different matter. For example, organic agriculture and ecological agriculture will also develop and become popular. But it is not that if we pursue organic agriculture and ecological agriculture, we stop pursuing petrochemical agriculture - the two run in parallel. If everyone ate only organic products, that wouldn't work either. Why? Because the Earth is only so big. If we didn't apply chemical fertilizers and pesticides, and didn't use diesel, agricultural output would be much lower and couldn't feed so many people. That would not necessarily be good for the ecology - it could be bad.
Reporter: Why would it not be good for the ecology?
Li Changping: Suppose the global population is now 6 billion. With current methods, 6 billion mu of land can feed 6 billion people. Suppose one day we ate only organic products - then 6 billion people might need 10 billion mu of land for cultivation. That would mean wetlands and other areas might be brought into use, which would have an even greater impact on the ecology.
Reporter: But the damage petrochemical agriculture does to the ecology is also obvious, and agricultural pollution is more persistent than industrial pollution, and potentially more harmful.
Li Changping: This problem also exists - it is a matter of choosing the lesser of two evils. I think that of the fertilizing and spraying farmers currently do, more than 50% is wasted.
So this is a matter of spreading technology. If used well, the effects would be greatly improved while the harm would be greatly reduced. But our agricultural production is still very extensive - the use of pesticides, chemical fertilizers and such is very extensive, so its impact on the ecology is relatively large.
"Company + farmer" could make China follow in the Philippines' footsteps
Li Changping became known and remembered because in 2000, as a grassroots cadre, he wrote a letter to Zhu Rongji in which he bluntly stated that "farmers are truly suffering, rural areas are truly poor, and agriculture is truly in danger." The context for his warning that agriculture was in danger was that starting in 1997, there was a continuous large-scale nationwide situation of losses in grain, cotton and oil crops, and farmers abandoning their land was very common. In Jianli County, where he worked, the abandoned area reached as high as 50%.
Now, land abandonment has become less common, because the abolition of the agricultural tax and agricultural subsidies have made farming profitable for farmers. For example, in Hebei, a farmer planting one mu of land can earn at least 600 yuan from two seasons. But in Li Changping's view, with the spread of the "company + farmer" model, a new dangerous situation for agriculture is emerging...
Reporter: Chinese agriculture, like that of Japan and South Korea, is small-scale agriculture, but the development approaches differ. What is the most important difference?
Li Changping: Japan, South Korea and China's Taiwan region organized small farmers, turning unorganized, scattered small farmers into organized cooperative small farmers, and developed agriculture with farmers as the main body. All the returns in the agricultural industry chain went to the farmers, and the farmers themselves became prosperous. Under these circumstances, farmers moving to cities was orderly, not forced, and the income gap between farmers and urban residents was not large.
China mainly supports the development of leading enterprises, and then the leading enterprises integrate small farmers - that is, the "company + farmer" model. Companies dominate agricultural development, and farmers are dependent on companies. Companies capture most of the gains in the agricultural industry, and the gains farmers obtain from the agricultural industry grow smaller and smaller. Farmers moving to cities is a process of being forced out with no alternative.
Reporter: You have said many times that Chinese agriculture cannot follow the Philippine model. What is the Philippine model like? Why can't China follow it?
Li Changping: The Philippines was once the "model of Asia," in the same situation as we are today: big capital went to the countryside, forcing farmers into bankruptcy, and farmers went to the cities to work. When the economic crisis came, large numbers of migrant workers lost their jobs, but they could never go back. In the cities they demanded jobs, democracy and revolution, and the military coups of the 1960s in the Philippines emerged against this backdrop. Moreover, after big capital went to the countryside, it changed the country's food sovereignty. The Americans told the Filipinos, "You don't need to grow rice anymore - we'll sell it to you very cheaply," turning the Philippines into a raw material base for the United States. So when grain prices rose, Philippine troops lined up to maintain order as farmers bought grain. This is the loss of food sovereignty. Once a country loses food sovereignty, its economic sovereignty, social stability, and even national sovereignty will be held hostage by others. If China really did what some economists advocate - having 15% of the grain gap supplied by other countries - that would be equivalent to handing over control of grain price fluctuations of 50% up and down to foreign countries (just like soybeans), and our country would have no food security, economic security or social stability to speak of, and even national sovereignty would be unsafe. This is the situation in the Philippines today.
So in the process of modernization and transformation, Japan, South Korea and China's Taiwan region were relatively successful, while the Philippines was relatively unsuccessful. Should we learn from Japan and South Korea and support farmers in organizing? Or should we continue with "company + farmer"? Or maintain the current household business model? Or further improve the collective economy and cooperative economy? There is a question of model choice here. On this point, Comrade Deng Xiaoping long ago anticipated and warned us.
As early as 1985, Deng Xiaoping said: "The purpose of socialism is to make the whole nation prosperous, not to create polarization. If our policies lead to polarization, then we have failed." In 1993, Comrade Deng Xiaoping pointed out again: "How can 1.2 billion people achieve prosperity, and after becoming prosperous, how should wealth be distributed? These are big questions... If a small number of people obtain so much wealth while the majority have nothing, then sooner or later problems will arise if this development continues... We say we must prevent polarization, but in fact polarization naturally emerges... We must use all kinds of means, all kinds of methods and all kinds of plans to solve these problems."
In 2005, Bo Yibo said in a letter to the Third Member Congress of the China Foundation for Poverty Alleviation: "In rural development, there is a big issue that requires our in-depth study and attention. This is the idea of the 'two leaps' put forward by Comrade Deng Xiaoping. Deng Xiaoping said: 'Rural reform and development will have two leaps. The first leap is to abolish the people's communes and implement a responsibility system based mainly on the household contract responsibility system. The second leap is to develop the collective economy.' He also said: 'The rural economy will ultimately have to achieve collectivization and intensification.' 'Relying only on manual labor and farming by individual households alone, without moving toward collectivized and intensified economic development, it will be impossible to achieve agricultural modernization. Even if it takes 100 or 200 years, ultimately this road must still be taken.'"
Bo Yibo also said: "Hancunhe Village in Beijing, Huaxi Village in Jiangsu, Hangmin Village in Zhejiang, Liuzhuang and Nanjie Village in Henan, and others - the collective economies of these villages, in moving toward the large market, have already demonstrated their development advantages and the superiority of taking the road of common prosperity. There are also many rural areas that, on the basis of decentralized household management, guide farmers to voluntarily unite, develop community-based and specialized cooperative economic organizations, and guide these cooperative economic organizations to link up the production, processing and sale of agricultural products, gradually achieving industrialized operation, intensified operation and scaled operation. This will become a new important form of rural collective economic development, and is also an important path - meeting the requirements of the socialist market economy - to achieve the intensification, socialization and modernization of agriculture and the rural economy."
Reporter: These are three completely different paths.
Li Changping: Yes, so my position is that we should both practice Deng Xiaoping's concept of the "second leap" and learn from the comprehensive agricultural cooperative model of Japan, South Korea and China's Taiwan region, and must never learn from the Philippines. But the current policy direction is still capital going to the countryside, supporting leading enterprises to deprive small farmers - which is precisely the Philippine path.
In the 1980s, if a farmer raised 20 pigs and planted 10 mu of land, he would be a "ten-thousand-yuan household," equivalent to more than a hundred thousand yuan today. But today, raising the same pigs and planting the same land yields only a few thousand yuan in income. Where have the returns from agriculture gone? Because the higher the level of "company + farmer" in agriculture, the greater the benefits obtained by capital and the smaller the returns obtained by farmers.
After 30 years of reform and opening up, China's farmers have not become prosperous. Since 1985, the returns farmers obtain from agriculture have been continuously declining. On the other hand, the number of farmers has not decreased - it has increased by 200 million. This shows that our path to modernization is dangerous.
So in "Big Climate" I warn of this point: if this development continues, we could become a second Philippines. We should draw some reflections from this, readjust our development direction, and we must avoid becoming a second Philippines.
China's agricultural policy lags behind actual development needs
Li Changping's new book "Big Climate" is a book seeking a way out for Chinese farmers. Regarding China's agricultural development, he believes it must go through four stages, and each different stage must have corresponding policies. But China's current situation is that the development stage and agricultural policy do not match. Agricultural development has entered the second, third, even fourth stage, but the policy is still that of the first stage. In other words, agricultural policy has fallen seriously behind. The dilemma of agricultural output increasing while farmers' income does not urgently needs agricultural policy adjustment.
Reporter: You once said you wanted to write a book called "Seeking a Way Out for Chinese Farmers." Have you ever thought about writing a book on a way out for Chinese agriculture? Where do you think the way out for Chinese agriculture lies? Or rather, where should Chinese agriculture go?
Li Changping: My recently published "Big Climate" can be considered "Seeking a Way Out for Chinese Farmers." If Chinese farmers have a way out, then Chinese agriculture will not have too many problems. In addition, agricultural development has four different stages, and agriculture must be developed in accordance with the development laws of the different stages of agriculture.
Generally speaking, agricultural development in Asian countries and regions must go through four stages:
The first stage is the stage of agricultural product shortage, whose biggest characteristic is that increasing production means increasing income. The core goal of agricultural development at this stage is "pursuing output growth returns." The key points of agricultural policy are "technology-intensive (technology focused on increasing output) + labor-intensive + infrastructure construction." The household contract responsibility system meets the development requirements of this stage.
The second stage is when supply and demand for bulk agricultural products are basically balanced. A 1% increase in output may cause prices to fall by 2-5%, and increasing production without increasing income is the biggest characteristic of this stage. The core goal of agricultural development at this stage is "pursuing price growth returns" - ensuring that increased production does not reduce income, and reduced production also does not reduce income. The key points of agricultural policy are "technology-intensive (technology focused on quality) + organization-intensive (farmer cooperation) + capital-intensive + brand-intensive." The cooperative economy and collective economy models, as well as the comprehensive agricultural cooperative model of Japan, South Korea and China's Taiwan region, meet the development requirements of this stage.
The third stage is the stage of highly developed agriculture, where the production capacity for bulk agricultural products is in absolute surplus. The biggest characteristic of this stage is highly intense competition. The goal of agricultural development is "pursuing market share growth returns" - steadily occupying a certain amount of market share for a certain agricultural product, obtaining absolute market pricing power, and securing market share returns over the long term. For example, American agricultural conglomerates have long occupied the market share returns for Chinese soybeans. The key points of agricultural policy are "technology-intensive (monopolistic) + organization-intensive (farmer cooperatives + export-leading enterprises) + capital-intensive + brand-intensive + government industrial policy support (export subsidies)."
In the third stage of agricultural development, "free trade," in which developed countries subsidize their own super-strong agricultural conglomerates to seize market share of certain important agricultural products in developing countries (gaining a certain degree of pricing power), will be one of the key goals that developed countries always pursue in WTO negotiations. If developing countries do not understand this principle, and if the markets for major agricultural products such as cotton and grain are occupied by developed countries with a relatively large share - manipulating market prices - it will seriously endanger economic security, social security, and even regime security. A development model of "internal-external combination" under government support - with farmer cooperative economic and collective economic organizations handling the internal side (intensified agricultural operation) and leading enterprises and industry associations handling the external side (expanding overseas market share) - is relatively suited to the third stage.
The fourth stage is the stage of agricultural alienation. In some places, agriculture will become industrialized; in others, agriculture will become service-oriented.
Reporter: Which stage is Chinese agriculture mainly in now?
Li Changping: The actual situation of our agriculture entered the second stage long ago, but our agricultural policy is still in the first stage, still pursuing output - increasing production without increasing income.
The key of keys in second-stage agricultural policy is to organize farmers, develop the cooperative economy and collective economy, or learn from the comprehensive agricultural cooperative model of China's Taiwan region, South Korea and Japan. China's Taiwan region took only 6 years to enter the second stage, and it completed the first stage in 6 years as well. But we have spent more than 30 years and still have not completed it, precisely because our agricultural policy is wrong - we have not pursued price returns. Because only by pursuing price returns can there be pricing power and added value, and obtaining pricing power and added value in fact requires organizing farmers.
Reporter: You just mentioned the policy issue, but haven't the No. 1 Documents every year in recent years been about the three rural issues? And now it is not just about pursuing agricultural output, but "sound and rapid development."
Li Changping: Having a No. 1 Document shows that we attach importance to it, but it does not necessarily mean that agricultural policy is correct.
We completed the first stage of agricultural development in 1985 - that is, the stage of food sufficiency was already completed. In the first stage, implementing the household contract responsibility system was very correct. In 3 years our grain output rose, and by 1985 grain was already in surplus.
But how many years did we spend increasing farmers' income? From 1985 to now, if we exclude income from working as migrant laborers, farmers' income from agriculture has been declining for these more than 20 years. No growth means our policy was wrong.
What are the key points of the policy to increase farmers' income? It is organization. But for so many years we have never made the organization of farmers a key point. We did not learn from Japan, South Korea or China's Taiwan region, nor did we learn from Huaxi or Dazhai. Some countries have already entered the third stage and are pursuing international market share returns, while our companies are still fighting farmers over domestic market share. We fight among ourselves - you quote one yuan per jin, I quote ninety cents; you quote ninety cents, I quote eighty cents. This way we simply cannot make money.
Reporter: Then, when it comes to the third and fourth stages you mentioned, how should Chinese agriculture develop?
Li Changping: Further on, when agricultural development reaches the third stage and pursues market share returns, we need to learn from the United States and Europe, and support our leading enterprises in going overseas to seize others' market share. The more we export and the more we occupy others' market share, the higher not only domestic price returns but also international market pricing power will be, the more money we will earn from foreign countries, and the greater the economic benefits farmers can gain.
When it reaches the fourth stage - the stage in which agriculture in certain places becomes industrialized and service-oriented - post-modern agriculture must be developed in accordance with the development scale of industry and services.
So now policies must be formulated by stage. For example, Northeast China, the Jiaodong Peninsula, Hainan Island and some parts of ** have already entered the third stage of agricultural development, and need to be guided by third-stage agricultural policy. In the suburbs of some large cities and places with developed industry, agricultural development has entered the fourth stage, so fourth-stage agricultural policy should be formulated. Most places across the country are in the second stage of agricultural development, while agricultural policy is still that of the first stage - this is the biggest problem in agricultural development today.
Chinese agriculture has a heavy burden and a long road ahead
Increasing farmers' income and stabilizing agricultural production is one of the fundamental issues determining whether Chinese society and the economy can develop stably over the long term. Starting from the No. 1 Document of 2002, which put forward that the "three rural issues" are the top priority, the state's efforts in paying attention to farmers, rural areas and agriculture have continued to increase in recent years - such as increasing agricultural subsidies, abolishing the agricultural tax, and incorporating farmers into the medical insurance and pension systems - all of which have let farmers feel tangible benefits.
But the problems still exist. According to surveys by Li Changping and other scholars, if extra income such as from working as migrant laborers is excluded, Chinese farmers' income from agriculture has decreased. How farmers can increase income from agricultural production has always been a difficult problem. Leading enterprises going to the countryside, letting enterprises organize farmers, and creating brands to open up markets, is something governments at all levels from top to bottom have consistently supported. But whether enterprises pursuing maximized profits can guarantee that farmers obtain the benefits they deserve - no one dares to guarantee.
Starting in the 1950s, China's agricultural policy has consistently prioritized output, with large-scale and mechanized development becoming the goal of agricultural industrialization, and chemicalization being the means to achieve increased agricultural output. Fifty years later, under smallholder economic conditions, China still has not formed large-scale, mechanized agriculture, and has only achieved the food security, ecological and environmental pollution, and food safety consequences brought by petroleum agriculture.
In 2008, the Third Plenary Session of the 17th CPC Central Committee proposed that the development goal of Chinese agriculture by 2020 is to form a resource-conserving and environment-friendly agricultural production system, with rural living conditions and the ecological environment markedly improved and the capacity for sustainable development continuously enhanced. At the same time, the comprehensive agricultural production capacity should be markedly improved, and national food security and the supply of major agricultural products should be effectively guaranteed.
At present, Chinese agriculture still has many problems. How to gradually realize ecological agriculture that coexists harmoniously with the ecological environment on the basis of ensuring China's food security remains a heavy burden with a long road ahead.
Li Changping divides China's agricultural development into four stages. He believes Chinese agriculture has long passed the stage of mere food sufficiency and has begun to enter the stage of "pursuing price growth returns," that is, the stage of increasing farmers' income. But this second stage has lasted for more than 20 years without producing results. He attributes the cause to agricultural policy being out of step with actual conditions: "Our agricultural policy is still stuck in the first stage, still pursuing output - increasing production without increasing income."
Petrochemical agriculture will continue
Li Changping's home is by the edge of Hong Lake. During the commune period, his parents fished in Hong Lake year-round, catching tens of thousands, even over a hundred thousand jin a year. His older sister farmed in the production team, with rice yields of about 450 jin per mu. Now, very few people in Hong Lake make a living by fishing, and rice is rarely planted anymore, because the returns from grain cultivation are too low, and the land is basically all used for aquaculture.
Chemical fertilizers and pesticides began to be used in the late 1970s. Grain output went up, but the fish in Hong Lake grew fewer and fewer as industrial and agricultural pollution intensified. Li Changping says petrochemical agriculture does have an impact on the environment and is harmful, but grain output is higher than before. The natural fish are gone, but farmed fish have increased. "This depends on what people actually want, and how to pursue the benefits while avoiding the harms - we need to find a balance point."
Reporter: In recent years, some researchers have proposed the idea of agricultural diversification and integration with ecology, beginning to reflect on the past few decades of relying solely on petrochemical agriculture to increase output. What is your view?
Li Changping: Petroleum agriculture and chemical agriculture will continue. But petrochemical agriculture, genetically modified agriculture, energy agriculture, factory agriculture, along with ecological agriculture, organic agriculture, courtyard agriculture and cultural agriculture will develop simultaneously, and agriculture will become increasingly important. Agriculture will ultimately be influenced by the trend of "weaponization of agricultural products" as well as demand, ecological and cultural factors, forming a scientific, harmonious, diversified and sustainable model of agricultural development.
Reporter: Petroleum and chemical agriculture will continue - how do you explain that?
Li Changping: This kind of agriculture that pursues output will certainly continue, because the population is growing, and demand for agricultural products and energy is growing. For example, in the future we will use corn and other agricultural products to produce alcohol. Agricultural products are already linked to energy, so pursuing high output is certain - this will not change.
As for making food safer for people to eat, that is a different matter. For example, organic agriculture and ecological agriculture will also develop and become popular. But it is not that if we pursue organic agriculture and ecological agriculture, we stop pursuing petrochemical agriculture - the two run in parallel. If everyone ate only organic products, that wouldn't work either. Why? Because the Earth is only so big. If we didn't apply chemical fertilizers and pesticides, and didn't use diesel, agricultural output would be much lower and couldn't feed so many people. That would not necessarily be good for the ecology - it could be bad.
Reporter: Why would it not be good for the ecology?
Li Changping: Suppose the global population is now 6 billion. With current methods, 6 billion mu of land can feed 6 billion people. Suppose one day we ate only organic products - then 6 billion people might need 10 billion mu of land for cultivation. That would mean wetlands and other areas might be brought into use, which would have an even greater impact on the ecology.
Reporter: But the damage petrochemical agriculture does to the ecology is also obvious, and agricultural pollution is more persistent than industrial pollution, and potentially more harmful.
Li Changping: This problem also exists - it is a matter of choosing the lesser of two evils. I think that of the fertilizing and spraying farmers currently do, more than 50% is wasted.
So this is a matter of spreading technology. If used well, the effects would be greatly improved while the harm would be greatly reduced. But our agricultural production is still very extensive - the use of pesticides, chemical fertilizers and such is very extensive, so its impact on the ecology is relatively large.
"Company + farmer" could make China follow in the Philippines' footsteps
Li Changping became known and remembered because in 2000, as a grassroots cadre, he wrote a letter to Zhu Rongji in which he bluntly stated that "farmers are truly suffering, rural areas are truly poor, and agriculture is truly in danger." The context for his warning that agriculture was in danger was that starting in 1997, there was a continuous large-scale nationwide situation of losses in grain, cotton and oil crops, and farmers abandoning their land was very common. In Jianli County, where he worked, the abandoned area reached as high as 50%.
Now, land abandonment has become less common, because the abolition of the agricultural tax and agricultural subsidies have made farming profitable for farmers. For example, in Hebei, a farmer planting one mu of land can earn at least 600 yuan from two seasons. But in Li Changping's view, with the spread of the "company + farmer" model, a new dangerous situation for agriculture is emerging...
Reporter: Chinese agriculture, like that of Japan and South Korea, is small-scale agriculture, but the development approaches differ. What is the most important difference?
Li Changping: Japan, South Korea and China's Taiwan region organized small farmers, turning unorganized, scattered small farmers into organized cooperative small farmers, and developed agriculture with farmers as the main body. All the returns in the agricultural industry chain went to the farmers, and the farmers themselves became prosperous. Under these circumstances, farmers moving to cities was orderly, not forced, and the income gap between farmers and urban residents was not large.
China mainly supports the development of leading enterprises, and then the leading enterprises integrate small farmers - that is, the "company + farmer" model. Companies dominate agricultural development, and farmers are dependent on companies. Companies capture most of the gains in the agricultural industry, and the gains farmers obtain from the agricultural industry grow smaller and smaller. Farmers moving to cities is a process of being forced out with no alternative.
Reporter: You have said many times that Chinese agriculture cannot follow the Philippine model. What is the Philippine model like? Why can't China follow it?
Li Changping: The Philippines was once the "model of Asia," in the same situation as we are today: big capital went to the countryside, forcing farmers into bankruptcy, and farmers went to the cities to work. When the economic crisis came, large numbers of migrant workers lost their jobs, but they could never go back. In the cities they demanded jobs, democracy and revolution, and the military coups of the 1960s in the Philippines emerged against this backdrop. Moreover, after big capital went to the countryside, it changed the country's food sovereignty. The Americans told the Filipinos, "You don't need to grow rice anymore - we'll sell it to you very cheaply," turning the Philippines into a raw material base for the United States. So when grain prices rose, Philippine troops lined up to maintain order as farmers bought grain. This is the loss of food sovereignty. Once a country loses food sovereignty, its economic sovereignty, social stability, and even national sovereignty will be held hostage by others. If China really did what some economists advocate - having 15% of the grain gap supplied by other countries - that would be equivalent to handing over control of grain price fluctuations of 50% up and down to foreign countries (just like soybeans), and our country would have no food security, economic security or social stability to speak of, and even national sovereignty would be unsafe. This is the situation in the Philippines today.
So in the process of modernization and transformation, Japan, South Korea and China's Taiwan region were relatively successful, while the Philippines was relatively unsuccessful. Should we learn from Japan and South Korea and support farmers in organizing? Or should we continue with "company + farmer"? Or maintain the current household business model? Or further improve the collective economy and cooperative economy? There is a question of model choice here. On this point, Comrade Deng Xiaoping long ago anticipated and warned us.
As early as 1985, Deng Xiaoping said: "The purpose of socialism is to make the whole nation prosperous, not to create polarization. If our policies lead to polarization, then we have failed." In 1993, Comrade Deng Xiaoping pointed out again: "How can 1.2 billion people achieve prosperity, and after becoming prosperous, how should wealth be distributed? These are big questions... If a small number of people obtain so much wealth while the majority have nothing, then sooner or later problems will arise if this development continues... We say we must prevent polarization, but in fact polarization naturally emerges... We must use all kinds of means, all kinds of methods and all kinds of plans to solve these problems."
In 2005, Bo Yibo said in a letter to the Third Member Congress of the China Foundation for Poverty Alleviation: "In rural development, there is a big issue that requires our in-depth study and attention. This is the idea of the 'two leaps' put forward by Comrade Deng Xiaoping. Deng Xiaoping said: 'Rural reform and development will have two leaps. The first leap is to abolish the people's communes and implement a responsibility system based mainly on the household contract responsibility system. The second leap is to develop the collective economy.' He also said: 'The rural economy will ultimately have to achieve collectivization and intensification.' 'Relying only on manual labor and farming by individual households alone, without moving toward collectivized and intensified economic development, it will be impossible to achieve agricultural modernization. Even if it takes 100 or 200 years, ultimately this road must still be taken.'"
Bo Yibo also said: "Hancunhe Village in Beijing, Huaxi Village in Jiangsu, Hangmin Village in Zhejiang, Liuzhuang and Nanjie Village in Henan, and others - the collective economies of these villages, in moving toward the large market, have already demonstrated their development advantages and the superiority of taking the road of common prosperity. There are also many rural areas that, on the basis of decentralized household management, guide farmers to voluntarily unite, develop community-based and specialized cooperative economic organizations, and guide these cooperative economic organizations to link up the production, processing and sale of agricultural products, gradually achieving industrialized operation, intensified operation and scaled operation. This will become a new important form of rural collective economic development, and is also an important path - meeting the requirements of the socialist market economy - to achieve the intensification, socialization and modernization of agriculture and the rural economy."
Reporter: These are three completely different paths.
Li Changping: Yes, so my position is that we should both practice Deng Xiaoping's concept of the "second leap" and learn from the comprehensive agricultural cooperative model of Japan, South Korea and China's Taiwan region, and must never learn from the Philippines. But the current policy direction is still capital going to the countryside, supporting leading enterprises to deprive small farmers - which is precisely the Philippine path.
In the 1980s, if a farmer raised 20 pigs and planted 10 mu of land, he would be a "ten-thousand-yuan household," equivalent to more than a hundred thousand yuan today. But today, raising the same pigs and planting the same land yields only a few thousand yuan in income. Where have the returns from agriculture gone? Because the higher the level of "company + farmer" in agriculture, the greater the benefits obtained by capital and the smaller the returns obtained by farmers.
After 30 years of reform and opening up, China's farmers have not become prosperous. Since 1985, the returns farmers obtain from agriculture have been continuously declining. On the other hand, the number of farmers has not decreased - it has increased by 200 million. This shows that our path to modernization is dangerous.
So in "Big Climate" I warn of this point: if this development continues, we could become a second Philippines. We should draw some reflections from this, readjust our development direction, and we must avoid becoming a second Philippines.
China's agricultural policy lags behind actual development needs
Li Changping's new book "Big Climate" is a book seeking a way out for Chinese farmers. Regarding China's agricultural development, he believes it must go through four stages, and each different stage must have corresponding policies. But China's current situation is that the development stage and agricultural policy do not match. Agricultural development has entered the second, third, even fourth stage, but the policy is still that of the first stage. In other words, agricultural policy has fallen seriously behind. The dilemma of agricultural output increasing while farmers' income does not urgently needs agricultural policy adjustment.
Reporter: You once said you wanted to write a book called "Seeking a Way Out for Chinese Farmers." Have you ever thought about writing a book on a way out for Chinese agriculture? Where do you think the way out for Chinese agriculture lies? Or rather, where should Chinese agriculture go?
Li Changping: My recently published "Big Climate" can be considered "Seeking a Way Out for Chinese Farmers." If Chinese farmers have a way out, then Chinese agriculture will not have too many problems. In addition, agricultural development has four different stages, and agriculture must be developed in accordance with the development laws of the different stages of agriculture.
Generally speaking, agricultural development in Asian countries and regions must go through four stages:
The first stage is the stage of agricultural product shortage, whose biggest characteristic is that increasing production means increasing income. The core goal of agricultural development at this stage is "pursuing output growth returns." The key points of agricultural policy are "technology-intensive (technology focused on increasing output) + labor-intensive + infrastructure construction." The household contract responsibility system meets the development requirements of this stage.
The second stage is when supply and demand for bulk agricultural products are basically balanced. A 1% increase in output may cause prices to fall by 2-5%, and increasing production without increasing income is the biggest characteristic of this stage. The core goal of agricultural development at this stage is "pursuing price growth returns" - ensuring that increased production does not reduce income, and reduced production also does not reduce income. The key points of agricultural policy are "technology-intensive (technology focused on quality) + organization-intensive (farmer cooperation) + capital-intensive + brand-intensive." The cooperative economy and collective economy models, as well as the comprehensive agricultural cooperative model of Japan, South Korea and China's Taiwan region, meet the development requirements of this stage.
The third stage is the stage of highly developed agriculture, where the production capacity for bulk agricultural products is in absolute surplus. The biggest characteristic of this stage is highly intense competition. The goal of agricultural development is "pursuing market share growth returns" - steadily occupying a certain amount of market share for a certain agricultural product, obtaining absolute market pricing power, and securing market share returns over the long term. For example, American agricultural conglomerates have long occupied the market share returns for Chinese soybeans. The key points of agricultural policy are "technology-intensive (monopolistic) + organization-intensive (farmer cooperatives + export-leading enterprises) + capital-intensive + brand-intensive + government industrial policy support (export subsidies)."
In the third stage of agricultural development, "free trade," in which developed countries subsidize their own super-strong agricultural conglomerates to seize market share of certain important agricultural products in developing countries (gaining a certain degree of pricing power), will be one of the key goals that developed countries always pursue in WTO negotiations. If developing countries do not understand this principle, and if the markets for major agricultural products such as cotton and grain are occupied by developed countries with a relatively large share - manipulating market prices - it will seriously endanger economic security, social security, and even regime security. A development model of "internal-external combination" under government support - with farmer cooperative economic and collective economic organizations handling the internal side (intensified agricultural operation) and leading enterprises and industry associations handling the external side (expanding overseas market share) - is relatively suited to the third stage.
The fourth stage is the stage of agricultural alienation. In some places, agriculture will become industrialized; in others, agriculture will become service-oriented.
Reporter: Which stage is Chinese agriculture mainly in now?
Li Changping: The actual situation of our agriculture entered the second stage long ago, but our agricultural policy is still in the first stage, still pursuing output - increasing production without increasing income.
The key of keys in second-stage agricultural policy is to organize farmers, develop the cooperative economy and collective economy, or learn from the comprehensive agricultural cooperative model of China's Taiwan region, South Korea and Japan. China's Taiwan region took only 6 years to enter the second stage, and it completed the first stage in 6 years as well. But we have spent more than 30 years and still have not completed it, precisely because our agricultural policy is wrong - we have not pursued price returns. Because only by pursuing price returns can there be pricing power and added value, and obtaining pricing power and added value in fact requires organizing farmers.
Reporter: You just mentioned the policy issue, but haven't the No. 1 Documents every year in recent years been about the three rural issues? And now it is not just about pursuing agricultural output, but "sound and rapid development."
Li Changping: Having a No. 1 Document shows that we attach importance to it, but it does not necessarily mean that agricultural policy is correct.
We completed the first stage of agricultural development in 1985 - that is, the stage of food sufficiency was already completed. In the first stage, implementing the household contract responsibility system was very correct. In 3 years our grain output rose, and by 1985 grain was already in surplus.
But how many years did we spend increasing farmers' income? From 1985 to now, if we exclude income from working as migrant laborers, farmers' income from agriculture has been declining for these more than 20 years. No growth means our policy was wrong.
What are the key points of the policy to increase farmers' income? It is organization. But for so many years we have never made the organization of farmers a key point. We did not learn from Japan, South Korea or China's Taiwan region, nor did we learn from Huaxi or Dazhai. Some countries have already entered the third stage and are pursuing international market share returns, while our companies are still fighting farmers over domestic market share. We fight among ourselves - you quote one yuan per jin, I quote ninety cents; you quote ninety cents, I quote eighty cents. This way we simply cannot make money.
Reporter: Then, when it comes to the third and fourth stages you mentioned, how should Chinese agriculture develop?
Li Changping: Further on, when agricultural development reaches the third stage and pursues market share returns, we need to learn from the United States and Europe, and support our leading enterprises in going overseas to seize others' market share. The more we export and the more we occupy others' market share, the higher not only domestic price returns but also international market pricing power will be, the more money we will earn from foreign countries, and the greater the economic benefits farmers can gain.
When it reaches the fourth stage - the stage in which agriculture in certain places becomes industrialized and service-oriented - post-modern agriculture must be developed in accordance with the development scale of industry and services.
So now policies must be formulated by stage. For example, Northeast China, the Jiaodong Peninsula, Hainan Island and some parts of ** have already entered the third stage of agricultural development, and need to be guided by third-stage agricultural policy. In the suburbs of some large cities and places with developed industry, agricultural development has entered the fourth stage, so fourth-stage agricultural policy should be formulated. Most places across the country are in the second stage of agricultural development, while agricultural policy is still that of the first stage - this is the biggest problem in agricultural development today.
Chinese agriculture has a heavy burden and a long road ahead
Increasing farmers' income and stabilizing agricultural production is one of the fundamental issues determining whether Chinese society and the economy can develop stably over the long term. Starting from the No. 1 Document of 2002, which put forward that the "three rural issues" are the top priority, the state's efforts in paying attention to farmers, rural areas and agriculture have continued to increase in recent years - such as increasing agricultural subsidies, abolishing the agricultural tax, and incorporating farmers into the medical insurance and pension systems - all of which have let farmers feel tangible benefits.
But the problems still exist. According to surveys by Li Changping and other scholars, if extra income such as from working as migrant laborers is excluded, Chinese farmers' income from agriculture has decreased. How farmers can increase income from agricultural production has always been a difficult problem. Leading enterprises going to the countryside, letting enterprises organize farmers, and creating brands to open up markets, is something governments at all levels from top to bottom have consistently supported. But whether enterprises pursuing maximized profits can guarantee that farmers obtain the benefits they deserve - no one dares to guarantee.
Starting in the 1950s, China's agricultural policy has consistently prioritized output, with large-scale and mechanized development becoming the goal of agricultural industrialization, and chemicalization being the means to achieve increased agricultural output. Fifty years later, under smallholder economic conditions, China still has not formed large-scale, mechanized agriculture, and has only achieved the food security, ecological and environmental pollution, and food safety consequences brought by petroleum agriculture.
In 2008, the Third Plenary Session of the 17th CPC Central Committee proposed that the development goal of Chinese agriculture by 2020 is to form a resource-conserving and environment-friendly agricultural production system, with rural living conditions and the ecological environment markedly improved and the capacity for sustainable development continuously enhanced. At the same time, the comprehensive agricultural production capacity should be markedly improved, and national food security and the supply of major agricultural products should be effectively guaranteed.
At present, Chinese agriculture still has many problems. How to gradually realize ecological agriculture that coexists harmoniously with the ecological environment on the basis of ensuring China's food security remains a heavy burden with a long road ahead.