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 | Saturday, April 15, 2000, updated at 15:07(GMT+8) | ||||||||||||
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Agriculture Ponders Post-WTO PolicyThe Chinese Government needs to orchestrate an agricultural development strategy as soon as possible to mitigate the negative effects on the country's rural economy after the country enters the World Trade Organization (WTO), said Huang Jikun, director of China Agricultural Economic Research Centre of the Chinese Academy of Agricultural Sciences."For the short run, it would be unrealistic for us to underestimate the negative effects on rural employment and the incomes of Chinese farmers after the country's entry to the WTO. International companies will step in and compete with their Chinese counterparts side by side in the marketplace, bringing structural changes to agriculture and many other business sectors based on the agriculture," he said. In a five-year period after China's accession to the WTO, the agricultural sector will trim 4 million jobs, he told the participants last week at the Forum on China's Agriculture organized by the Foreign Economic Co-operation Centre, Ministry of Agriculture. Both the production costs and retail prices of China's grain and the majority of other agricultural products now are higher than the average on the world market, and during the next two decades, they are likely to maintain such an expensive level, he predicted. But Huang is skeptical that under the foreseeable prerequisite, the Chinese consumers would continue to stand for such an expensive level and reject a more economic manner of buying foreign-made products at lower prices. Huang also warned that it would become the biggest challenge to the country's agriculture after the WTO entry. Under WTO principles, member countries must reduce trade obstacles. However, as a developing country, China can still implement a tariff-rate quota (TRQ) system to restrain imports of major agricultural products during the transitional period. In negotiations with the United States, China won a five-year grace period for its transition to full integration with the WTO, which means that by 2004 the average tariffs affecting the country's major agricultural products will decrease to 17.5 per cent from the current 21.2 per cent. For other farm and sideline products the rate will fall to 14.5 per cent. Chief economist of the World Bank Residential Mission to Beijing Deepak Bhattasali said it is hard to reach simple conclusions about China's agricultural prospects after its WTO accession because of the country's large population, its available lands, different climates and varieties of farm produce and returns that can be achieved in different areas. But, he said, the value-added output of Chinese farmers is low on average. Farming is increasingly becoming a part-time occupation in China. An increasing number of farmers have become workers at township factories, or gone to cities to find jobs, as they believed they could only be well-off by engaging in non-farming jobs in China. Restructuring changes in agriculture that have seen over the past decades have made many Chinese farmers lose their field jobs. But, the change that aims to make the agriculture maintain a sustainable growth will be minor than the post-WTO agriculture adjustment in the country, Deepak said. That it is labour intensive, rather than land intensive, will be an advantage of China's agriculture after the WTO entry, he said. Huang said China's annual net imports of grain could be as high as 54.699 million tons by 2005 if China becomes a WTO member this year. If it is not, net import would be about 20.888 million tons, he said. Huang said China has been falsely called a place where "livestock epidemic diseases are frequent" because of livestock breeding at the rural household level. This level of production makes the country's animal quarantine system hard for developed countries to accept. As a result, WTO entry will hardly bring any positive impetus to the export of the country's animal husbandry in the short run. On the contrary, the imports of meat and meat products will pose a threat to domestic animal husbandry development.
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