Agricultural Policy Adjustment in the Process of Trade Liberalization

China’s Agricultural Policies in the Past

   The development of China’s agricultural policy since 1949 can be divided into two stages based on their objectives.  In the first stage, from early 1950s to late 1970s,  the main objective of the agricultural policy was to support the industrialization.  In order to maintain a low cost for urban industries, agriculture was heavily taxed and agricultural prices were centrally controlled at very low level.  Consequently, China’s agriculture developed in a very slow pace and farmers’ income was almost fixed for thirty years.

    The second stage started from 1978 when economic reform began.  As a result of thirty years of heavy taxation and ten years of the Cultural Revolution, China’s agriculture was at the edge of crisis. Food supply in China was at a subsistent level.  In all urban and rural areas, food were rationed.  Changes in the Chinese agricultural policy was urgently needed.  This was the main reason why the economic reforms started in the agricultural sector.

       The main objective of the agricultural policy since 1978 is to increase food supply and ensure food security. Although food security is one of the objectives for most countries’ agricultural policy, it is extremely important and sensitive in China.  Food security is highly related to the political stability in China.  Historically, China had several food shortage which resulted in either political turmoil or peasant uprising.  By the end of the cultural revolution,

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