AGRICULTURE TRANSITION IN CHINA: EXPERIENCES AND LESSONS

Agricultural development since the beginning of the reform era has played a vital role in China's economic transition.First the rural reforms instituted during the household responsibility system period significantly improved agricultural output and productivity while simultaneously lifting hundreds of millions of farmers out of absolute poverty.Secondly, the massive labor flow from rural to urban areas due both to increases in agricultural productivity and systemic policy reforms associated with labor mobility also resulted in significant economic growth.This shift in the workforce is a major factor in explaining China's success with respect to both industrialization and urbanization.Thirdly, agricultural development, including increases in gross output as well as improved production efficiency, has enabled China to respond effectively to the challenge of feeding 1/5 of the world's population while relying on only 7% of the world's arable land.This article summarizes the history of China's agricultural transition, reviews its major achievements, and analyzes lessons learned. I. BACKGROUNDIn 1949, China's economy was based largely on its farming sector, and farming families, with low rates of accumulation.To speed up development of industry, particularly heavy industry, and to accomplish a goal of catching up with and surpassing developed economies, China had to maximize its collection of agricultural surplus, and push the accumulation rate up to 12% or higher, whilst maintaining low costs for labour and raw materials needed for industrial development by all means possible.Two approaches are available for the purpose of collection of agricultural surplus, one is financial and the other is fiscal management.A financial approach is built on a combination of accurate and flexible financial policy, well-structured financial organizations and the development of flexible and multiple financial tools.These financial conditions were unavailable in China at that time, so a fiscal management 25 WIEŚ I ROLNICTWO, NR 3 ( 164) 2014