1.1 Chinese history

2.1 The history of Chinese agriculture

Due to China's status as a developing country and its severe shortage of arable land, farming in China has always been very labor-intensive. However, throughout its history various methods have been developed or imported that enabled greater farming production and efficiency. They also utilized the seed drill to help improve on row farming.

During the Spring and Autumn Period (722-481 BCE), two revolutionary improvements in farming technology took place. One was the use of cast iron tools and beasts of burden to pull plows, and the other was the large-scale harnessing of rivers and development of water conservation projects. The engineer Sunshu Ao of the 6th century BCE and Ximen Bao of the 5th century BCE are two of the oldest hydraulic engineers from China, and their works were focused upon improving irrigation systems. These developments were widely spread during the ensuing Warring States period (403-221 BCE), culminating in the enormous Du Jiang Yan Irrigation System engineered by Li Bing by 256 BCE for the State of Qin in ancient Sichuan.

For agricultural purposes the Chinese had invented the hydraulic-powered trip hammer by the 1st century BCE, during the ancient Han Dynasty (202 BCE-220 CE). Although it found other purposes, its main function to pound, decorticate, and polish grain that otherwise would have been done manually. The Chinese also innovated the square-pallet chain pump by the 1st century CE, powered by a waterwheel or an oxen pulling on a system of mechanical wheels. Although the chain pump found use in public works of providing water for urban and palatial pipe systems, it was used largely to lift water from a lower to higher elevation in filling irrigation canalsand channels for farmland.

During the Eastern Jin (317-420) and the Northern and Southern Dynasties (420-589), the Silk Road and other international trade further spread farming technology throughout China. Political stability and a growing labor force led to economic growth, and people opened up large areas of wasteland and built irrigation works for expanded agricultural use. As land-use became more intensive and efficient, rice was grown twice a year and cattle began to be used for plowing and fertilization.

By the Tang Dynasty (618-907), China had become a unified feudal agricultural society. Improvements in farming machinery during this era included the moldboard plough andwatermill. Later during the Yuan Dynasty (1271-1368), cotton planting and weaving technology were extensively adopted and improved.

While around 750, 75% of China's population lived north of the river Yangtse, by 1250, 75% of the population lived south of the river. Such large-scale internal migration was possible due to introduction of quick-ripening strains of rice from Vietnam suitable for multi-cropping.

In 1909 US Professor of Agriculture Franklin Hiram King made an extensive tour of China (as well as Japan and briefly Korea) and he described contemporary agricultural practices. He favourably described the farming of China as 'permanent agriculture' and his book 'Farmers of Forty Centuries', published posthumously in 1911, has become an agricultural classic and has been a favoured reference source for organic farming advocates.

Following the Communist Party of China's victory in the Chinese Civil War, control of the farmlands was taken away from landlords and redistributed to the 300 million peasant farmers. In 1952, gradually consolidating its power following the civil war, the government began organizing the peasants into teams. Three years later, these teams were combined into producer cooperatives, enacting the Socialist goal of collective land ownership. In the following year, 1956, the government formally took control of the land, further structuring the farmland into large government-operated collective farms.

In the 1958, «Great Leap Forward» campaign initiated by Mao Zedong, land use was placed under closer government control in an effort to improve agricultural output. In particular, the Great sparrow campaign had a direct negative impact on agriculture. Collectives were organized into communes, private food production was banned, and collective eating was required. Greater emphasis was also put onindustrialization instead of agriculture. The farming inefficiencies created by this campaign led to The Great Chinese Famine, resulting in the deaths of somewhere between the government estimate of 14 million to scholarly estimates of 20 to 43 million. Although private plots of land were re-instated in 1962 due to this failure, communes remained the dominant rural unit of economic organization during the Cultural Revolution, with Mao championing the «Learn from Tachai» campaign. Tachai's semiliterate party secretary Chen Yonggui was among those outmaneuvered by Deng Xiaoping after the death of Mao: from 1982-1985, the Dazhai-style communes were gradually replaced by townships.

Beginning in 1978, as part of the Four Modernizations campaign, the Family Production Responsibility System was created, dismantling communes and giving agricultural production responsibility back to individual households. Households are now given crop quotas that they were required to provide to their collective unit in return for tools, draft animals, seeds, and other essentials. Households, which now lease land from their collectives, are free to use their farmland however they see fit as long as they meet these quotas. This freedom has given more power to individual families to meet their individual needs. In addition to these structural changes, the Chinese government also engages inirrigation projects (such as the Three Gorges Dam), runs large state farms, and encourages mechanization and fertilizer use.

By 1984, when about 99% of farm production teams had adopted the Family Production Responsibility System, the government began further economic reforms, aimed primarily at liberalizing agricultural pricing and marketing. In 1984, the government replaced mandatory procurement with voluntary contracts between farmers and the government. Later, in 1993, the government abolished the 40-year-old grain rationing system, leading to more than 90 percent of all annual agricultural produce to be sold at market-determined prices.

Since 1994, the government has instituted a number of policy changes aimed at limiting grain importation and increasing economic stability. Among these policy changes was the artificial increase of grain prices above market levels. This has led to increased grain production, while placing the heavy burden of maintaining these prices on the government. In 1995, the «Governor's Grain Bag Responsibility System» was instituted, holding provincial governors responsible for balancing grain supply and demand and stabilizing grain prices in their provinces. Later, in 1997, the «Four Separations and One Perfection» program was implemented to relieve some of the monetary burdens placed on the government by its grain policy.

As China continues to industrialize, vast swaths of agricultural land is being converted into industrial land. Farmers displaced by such urban expansion often become migrant labor for factories, but other farmers feel disenfranchised and cheated by the encroachment of industry and the growing disparity between urban and rural wealth and income.

The most recent innovation in Chinese agriculture is a push into organic agriculture. This rapid embrace of organic farming simultaneously serves multiple purposes, including food safety, health benefits, export opportunities, and by providing price premiums for the produce of rural communities, the adoption of organics can help stem the migration of rural workers to the cities. In the mid-1990s China became a net importer of grain, since its unsustainable practises of groundwater mining has effectively removed considerable land from productive agricultural use. [5]

2.2 Chinese agriculture

Agriculture is by far the leading occupation, involving almost 50% of the population, although extensive rough, high terrain and large arid areas-especially in the west and north-limit cultivation to only about 15% of the land surface. Since the late 1970s, China has decollectivized agriculture, yielding tremendous gains in production. Even with these improvements, agriculture accounts for only 12% of the nation's GDP. Despite initial gains in farmers' incomes in the early 1980s, taxes and fees have increasingly made farming an unprofitable occupation, and because the state owns all land, farmers have at times been easily evicted when croplands are sought by developers. Additional land reforms adopted in 2008 allow farmers to transfer land use rights.

Except for the oasis farming in Xinjiang and Qinghai, some irrigated areas in Inner Mongolia and Gansu, and sheltered valleys in Tibet, agricultural production is restricted to the east. China is the world's largest producer of rice and wheat and a major producer of potatoes, corn, peanuts, millet, barley, apples, sweet potatoes, sorghum, and soybeans. In terms of cash crops, China ranks first in cotton and tobacco and is an important producer of tea, oilseeds, silk, ramie, jute, hemp, sugarcane, and sugar beets.

Livestock raising on a large scale is confined to the border regions and provinces in the north and west; it is mainly of the nomadic pastoral type. China ranks first in world production of red meat (including beef, veal, mutton, lamb, and pork). Sheep, cattle, and goats are the most common types of livestock. Horses, donkeys, and mules are work animals in the north, while oxen and water buffalo are used for plowing chiefly in the south. Hogs and poultry are widely raised in China, furnishing important export staples, such as leather and egg products. Fish, chicken, and pork supply most of the animal protein in the Chinese diet. Due to improved technology, the fishing industry has grown considerably since the late 1970s.

Although China's agricultural output is the largest in the world, only about 15% of its total land area can be cultivated. China's arable land, which represents 10% of the total arable land in the world, supports over 20% of the world's population. Of this approximately 1.4 million square kilometers of arable land, only about 1.2% (116,580 square kilometers) permanently supports crops and 525,800 square kilometers are irrigated. The land is divided into approximately 200 million households, with an average land allocation of just 0.65hectares (1.6 acres).

China's limited space for farming has been a problem throughout its history, leading to chronic food shortage. While the production efficiency of farmland has grown over time, efforts to expand to the west and the north have held limited success, as such land is generally colder and drier than traditional farmlands to the east. Since the 1950s, farm space has also been pressured by the increasing land needs of industry and cities.

Such increases in the sizes of cities, such as the administrative district of Beijing's increase from 4,822 kmІ in 1956 to 16,808 kmІ in 1958, has led to the increased adoption of peri-urban agriculture. Such «suburban agriculture» led to more than 70% of non-staple food in Beijing, mainly consisting of vegetables and milk, to be produced by the city itself in the 1960s and 1970s. Recently, with relative food security in China, periurban agriculture has led to improvements in the quality of the food available, as opposed to quantity. One of the more recent experiments in urban agriculture is the Modern Agricultural Science Demonstration Park in Xiaotangshan.

Food crops

About 75% of China's cultivated area is used for food crops. Rice is China's most important crop, raised on about 25% of the cultivated area. The majority of rice is grown south of the Huai River, in the Yangtze valley, the Zhu Jiang delta, and in Yunnan, Guizhou, and Sichuan provinces.

Wheat is the second most-prevalent grain crop, grown in most parts of the country but especially on the North China Plain, the Wei and Fen River valleys on the Loess plateau, and in Jiangsu, Hubei, and Sichuan provinces. Corn andmillet are grown in north and northeast China, and oat is important in Inner Mongolia and Tibet.

Other crops include sweet potatoes in the south, white potatoes in the north, and various other fruits and vegetables. Tropical fruits are grown on Hainan Island, apples and pears are grown in northern Liaoning and Shandong.

Oil seeds are important in Chinese agriculture, supplying edible and industrial oils and forming a large share of agricultural exports. In North and Northeast China, Chinese soybeans are grown to be used in tofu and cooking oil. China is also a leading producer of peanuts, which are grown in Shandong and Hebei provinces. Other oilseed crops are sesame seeds, sunflower seeds, rapeseed, and the seeds of the tung tree.

Citrus is a major cash crop in southern China, with production scattered along and south of the Yangtze River valley. Mandarins are the most popular citrus in China, with roughly double the output of oranges.

Other important food crops for China include green and jasmine teas (popular among the Chinese population), black tea (as an export), sugarcane, and sugar beets. Tea plantations are located on the hillsides of the middle Yangtze Valley and in the southeast provinces of Fujian and Zhejiang. Sugarcane is grown in Guangdong and Sichuan, while sugar beets are raised in Heilongjiang province and on irrigated land in Inner Mongolia. Lotus is widely cultivated throughout southern China.

China is the leading producer of cotton, which is grown throughout, but especially in the areas of the North China Plain, the Yangtze river delta, the middle Yangtze valley, and the Xinjiang Uygur Autonomous Region. Other fiber crops include ramie, flax, jute, and hemp. Sericulture, the practice of silkworm raising, is also practiced in central and southern China.

Livestock

China has a large livestock population, with pigs and fowl being the most common. China's pig population and pork production mainly lies along Yangtze River. In 2011, Sichuan province had 51 million pigs (11% of China's total supply). In rural western China, sheep, goats, and camels are raised by nomadic herders. In Tibet, yaks are raised as a source of food, fuel, and shelter. Cattle, water buffalo, horses, mules, and donkeys are also raised in China, and dairy has recently been encouraged by the government, even though approximately 92.3% of the adult population is affected by some level of lactose intolerance.

As demand for gourmet foods grows, production of more exotic meats increases as well. Based on a survey data from 684 Chinese turtle farms (less than half of the all 1,499 officially registered turtle farms in the year of the survey, 2002), they sold over 92,000 tons of turtles (around 128 million animals) per year; this is thought to correspond to the industrial total of over 300 million turtles per year.

Increased incomes and increased demand for meat, especially pork, has resulted in demand for improved breeds of livestock, breeding stock imported particularly from the United States. Some of these breeds are adapted to factory farming.

Fishing

China accounts for about one-third of the total fish production of the world. Aquaculture, the breeding of fish in ponds and lakes, accounts for more than half of its output. The principal aquaculture-producing regions are close to urban markets in middle and lower Yangtze valley and the Zhu Jiang delta.

Production

In its first fifty years, the People's Republic of China greatly increased agricultural production through organizational and technological improvements.

However, since 2000 the depletion of China's main aquifers has led to an overall decrease in grain production, turning China into a net importer. The trend of Chinese dependence on imported food is expected to accelerate as the water shortage worsens. However desalination plants find few customers because it is still cheaper to over-utilize rivers, lakes and aquifers, even as these are depleted.

Today, China is both the world's largest producer and consumer of agricultural products. However, the researcher Lin Erda has stated a projected fall of possibly 14% to 23% by 2050 due to water shortages and other impacts by climate change; China has increased the budget for agriculture by 20% in 2009, and continues to support energy efficiency measures, renewable technology, and other efforts with investments, such as the over 30% green component of the $586bn fiscal stimulus package announced in November 2008.

Inefficiencies in the agricultural market

Despite rapid growth in output, the Chinese agricultural sector still faces several challenges. Farmers in several provinces, such as Shandong, Zhejiang, Anhui, Liaoning, and Xinjiang often have a hard time selling their agricultural products to customers due to a lack of information about current market conditions.

Between the producing farmer in the countryside and the end-consumer in the cities there is a chain of intermediaries. Because of a lack of information flows through them, farmers find it difficult to foresee the demand for different types of fruits and vegetables. In order to maximize their profits they therefore opt to produce those fruits and vegetables that created the highest revenues for farmers in the region in the previous year. If, however, most farmers do so, this causes the supply of fresh products to fluctuate substantially year on year. Relatively scarce products in one year are produced in excess the following year because of expected higher profit margins. The resulting excess supply, however, forces farmers to reduce their prices and sell at a loss. The scarce, revenue creating products of one year become the over-abundant, loss-making products in the following, and vice-versa.

Efficiency is further impaired in the transportation of agricultural products from the farms to the actual markets. According to figures from the Commerce Department up to 25% of fruits and vegetables rot before being sold, compared to around 5% in a typical developed country. As intermediaries cannot sell these rotten fruits they pay farmers less than they would if able to sell all or most of the fruits and vegetables. This reduces farmer's revenues although the problem is caused by post-production inefficiencies, which they are not themselves aware of during price negotiations with intermediaries.

These information and transportation problems highlight inefficiencies in the market mechanisms between farmers and end consumers, impeding farmers from taking advantage of the fast development of the rest of the Chinese economy. The resulting small profit margin does not allow them to invest in the necessary agricultural inputs (machinery, seeds, fertilizers, etc.) to raise productivity and improve their standards of living, from which the whole of the Chinese economy would benefit. This in turn increases the exodus of people from the countryside to the cities, which already face urbanization issues. [6]

2.3 Inefficiencies in the agricultural market

Despite rapid growth in output, the Chinese agricultural sector still faces several challenges. Farmers in several provinces, such as Shandong, Zhejiang, Anhui, Liaoning, and Xinjiang often have a hard time selling their agricultural products to customers due to a lack of information about current market conditions.

Between the producing farmer in the countryside and the end-consumer in the cities there is a chain of intermediaries. Because of a lack of information flows through them, farmers find it difficult to foresee the demand for different types of fruits and vegetables. In order to maximize their profits they therefore opt to produce those fruits and vegetables that created the highest revenues for farmers in the region in the previous year. If, however, most farmers do so, this causes the supply of fresh products to fluctuate substantially year on year. Relatively scarce products in one year are produced in excess the following year because of expected higher profit margins. The resulting excess supply, however, forces farmers to reduce their prices and sell at a loss. The scarce, revenue creating products of one year become the over-abundant, loss-making products in the following, and vice-versa.

Efficiency is further impaired in the transportation of agricultural products from the farms to the actual markets. According to figures from the Commerce Department up to 25% of fruits and vegetables rot before being sold, compared to around 5% in a typical developed country. As intermediaries cannot sell these rotten fruits they pay farmers less than they would if able to sell all or most of the fruits and vegetables. This reduces farmer's revenues although the problem is caused by post-production inefficiencies, which they are not themselves aware of during price negotiations with intermediaries.

These information and transportation problems highlight inefficiencies in the market mechanisms between farmers and end consumers, impeding farmers from taking advantage of the fast development of the rest of the Chinese economy. The resulting small profit margin does not allow them to invest in the necessary agricultural inputs (machinery, seeds, fertilizers, etc.) to raise productivity and improve their standards of living, from which the whole of the Chinese economy would benefit. This in turn increases the exodus of people from the countryside to the cities, which already face urbanization issues. [6]

3. Food safety in China and Chinese government regulation of economic