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Mainstream, Vol XLVII, No 20, May 2, 2009

Agricultural Prospects and the Rural Economy in China and India

Saturday 2 May 2009, by Gilbert Etienne

Agriculture is again in the world news with the food crisis in 2007-08. In Asia, agriculture has been neglected during the past twenty years. In Africa the situation is much worse since more decades. Now, from China to South-East and South Asia, governments are rediscovering their farmers. In Beijing, as in New Delhi, one hears the same worries: growing income disparities between towns and villages, rising imports of agricultural commodities, social malaises leading in China to violent clashes between local authorities and farmers; in India farmers’ suicides, Naxalite pockets in 150 districts, acute poverty still prevailing in several regions. (See on poverty Arjun Sengupta’s Report on Conditions of Work…., National Commission for Enterprises in the Unorganised Sector, 2008)

Put in a nutshell, the future of both countries offers similarities and differences: a limited and shrinking cropped area, the need for massive public funds and recurrent expenditure. In China, unavoidable rising imports of grain and soya beans could be partly balanced by growing exports of fruits, vegetables, fish, meat. In India the room for manoeuvre is wider: the untapped potential for higher yields is larger than in China, so that cereal imports could be limited, while, as in China, there is much scope for increasing exports of fruit, vegetables and other agricultural items as well as marine fish.

Some Preliminary Observations

SINCE ages, Chinese farmers have used very intensive traditional techniques, very careful tillage of the soil, heavy use of all possible natural fertilisers: farm manure, compost (a Chinese invention), the systematic use of latrines everywhere to collect human excreta and apply them on the fields. In India there is a greater diversity of human behaviours and yields. Agriculture-oriented dominant castes like the Jats, the Pattidars, the Kammas and others nurture their crops carefully and apply much hard work. When the dominant castes are not agriculture-oriented, the techniques are less intensive. In the 1920s, the famous Sir Malcolm Darling pointed out the differences between a Rajput and a Jat village in Punjab (see The Punjab Peasant…, London, Oxford University Press, 1947), although these differences may slowly change. For instance, in the eastern plains the Twice Born are gradually giving up the taboo preventing them to plough their fields. While Indian traditional tools, irrigation devices have never been “primitive”, the use of organic manure has been—and remains—weak. A sizeable part is used as fuel, the rest is not well kept. Beisdes, farm manure has shorter effect under tropical climates as in India, while the major part of China enjoys a temperate climate. Vegetable traditions are also less strong than in China, but Indian farmers have much more cattle and milk.

These differences explain why Chinese yields have been and remain substantially higher than Indian ones. Already in the 1930s, Chinese yields of cotton and rice were twice the ones in India and wheat yields were 33 per cent higher. (See J.L. Buck, Land Utilisation in China, New York, Paragon, 1964)

The Present Situation

BOTH countries face big regional differences: wide tracts of peninsular India, plateaux and hilly areas in China suffer from a low and erratic rainfall and the irrigation potential is limited. Yield increases are bound to be but moderate since these areas are not fit for the Green Revolution (GR).

On both sides irrigation has been important in plain areas for many centuries boosting yields and double cropping. It has progressed in a big way during the past fifty years through major and minor works, including reservoirs and canals, tubewells and pumpsets, both of them relying often on the arrival of electricity. These early achievements paved the way for the GR in both countries by the mid-1960s. New high yield varieties of cereals, responding better to higher doses of chemical fertilisers than traditional seeds, require also more water, so that the latter is the decisive factor. Then comes pest control especially in the rainy season.

In a few years time, in the plains fit for the GR, yields doubled with often more double cropping and, later on, increased further. In both countries governments were able to gather buffer stocks of cereals. India could considerably reduce its imports of grain and became even a net exporter of rice and wheat in the last few years. In China, grain imports remained relatively high until the decollectivisation of the rural economy in the 1980s.

From the 1980s onwards, agriculture was neglected in India, with falling public investments as well as maintenance and operations (M&O) expenditures, which could not be compensated by rising private investments. As a result there has been a slowdown of agricultural growth. Foodgrains and oilseeds have been fluctuating during the past ten years, so that in 2006-07 India had to import 6.6 million tonnes of wheat, after exporting wheat in the previous years. Edible oil is also an important import item. Progress in the late 1980s, with the introduction of soya beans and sunflower, has levelled off. As for pulses, their output increased only by 25 per cent since the early 1950s. As a result, even with high imports, poor people cannot any more afford dal which is rich in proteins. Recent progress of sugarcane is limited except in 2006-07. Only cotton enjoyed a fast growth in the past four years. As for plantations of tea and coffee, their output has hardly increased in recent years, unlike rubber which recorded a smart growth since 2003-04.

The irrigated area has very moderately increased since the mid-1990s: 40 per cent of the net cropped area of 140 million ha.
In China, the decollectivisation of the rural economy in the early 1980s gave a spectacular boost to agriculture, rural trade and small industries, so that between 1980 and 1985, the new revolution brought down urban-rural disparities. The first private buyer of a car (1984) was a farmer raising pigs near Beijing. He had his picture with his Toyota on the front page of The People’s Daily, the main newspaper. The new revolution was not followed by adequate public investments and M&O expenditures, so that the growth of major crops slowed down. On the other hand, fruit, vegetables, meat, fish did better as seen below.

Irrigation covers 45 per cent of the cultivated land of 122 million ha (net). Two-thirds of the cropland have low or medium yields, due to hilly terrain, lack of irrigation.

While comparing Chinese and Indian data one has to be careful. Under foodgrains the Chinese understand cereals, soya beans, tubers for one-fifth of their gross weight. Unlike in India, they take paddy and not clean rice (two-thirds of paddy). India includes pulses which are not important in China.

Foodgrain output amounted in China 498 million tonnes in 2006, and 502 million tonnes in 2007, in India: 279 million tonnes and to 293 million tonnes (following the Chinese accountings) versus a population of 1300 million in the former and 1100 million in the latter. One must add that the increase in India is mostly due to a good monsoon which led to a substantial increase in coarse grains, pulses, oilseeds (mostly rainfed).

Average Yields kg/ha
China 2006
Paddy 6000 3200
Wheat 4000 2670
Maize 4800 1900
Cotton (lint) 1100 420

In addition to gaps in output and yields, other differences are worth mentioning. The share of non-agricultural activities in rural areas has grown much faster in China thanks to the TVE (township and village enterprises), that is, small and medium local industries. After a first expansion under the collective system in the 1960s and 1970s, there was an enormous expansion following the decollectivisation. In 2004, 22 million TVEs employed 139 million workers. Out of a total rural labour force of 490 million, 177 million depend on non-agricultural jobs. Then come around 150 million peasants who have migrated to cities.

These outlets are particularly important when bearing in mind that private holdings allotted in the early 1980s to all peasant families amount to 0.2-0.5 ha in most areas. A great number of families do manage thanks to the outside job of one or some members. The average source of non-agricultural revenue per household has reached about 55 per cent of the total.

In advanced areas of India one comes across a similar combination of agriculture, small industries and services. In Punjab 52 per cent of the rural workers are outside agriculture, but the percentage falls to 45 per cent in Uttar Pradesh, to 33 per cent in Madhya Pradesh.

Finally the rate of urbanisation has reached 45 per cent in China, versus 30-33 per cent in India. (These are estimates of 2007.)

All in all, agriculture remains more important in India than in China: 17.5 per cent of the GDP in 2006-07 versus nine per cent, 50 to 55 per cent of the labour force depending on agriculture versus 40 per cent. (These are rough estimates.) According to the respective Census in 2001, 58 per cent versus 47 per cent.

The Main Weaknesses

ALTHOUGH a number of defects and shortcomings are rather similar, it is difficult to know which country is worse off, but their overall impact on the economy and society is bound to be higher in India because of the heavier weight of agriculture.

Irrigation, though so crucial, is in a poor shape. In India, the huge canal networks (much less widespread in China) have suffered practically since independence due to a weak administration and leakages of all sorts (in both senses of the word!), poor maintenance, lack of replacement of structures, so that only 30-40 per cent of the water entering the canals reaches the plants. (The normal rate is 60 per cent.) The shortage of water leads to repeated complaints. Not only are O&M budgets thoroughly insufficient partly due to low water rates, but most of the amount goes to the salaries of irrigation officials: 83 per cent in Haryana. As for the UP Irrigation Department, it employs 110,000 people.

New medium and major surface irrigation projects proceed very slowly. In spite of constant complaints, new projects keep on being started instead of first completing the ones under construction. Shortages of funds add to further delays. The gap between the potential created and actual irrigation amounts to about nine million ha, because minor canals and field channels have not been completed. In 2006, for instance, the very poor district of Mayurbhanj in Orissa was still waiting for the arrival of canals of the Subarnarekha Project which had been decided in 1978 and has been under construction since 1982.

Ground water through tubewells, which has been a major factor of growth, has become a stumbling block in spite of many alarm bells heard for more than ten years. Excess of pumping in the Indo-Ganges Basin as well as in peninsular India is lowering the water table and reducing the amount of water because of lack of recharge. In addition, tubewells suffer from the lack of electricity often limited to eight hours or less, power cuts, falls of voltage which damage the engines. Power supply is either free or much below costs. Power thefts are widespread. Here again we come across shortage of O&M funds and thoroughly insufficient investments in new power plants and networks.

Under such conditions, irrigation is no more protecting crops against drought. In 2004, in a number of villages in western UP, sugarcane yields fell by 30 per cent due to inadequate irrigation and a poor monsoon. On the other side good rains may compensate irrigation defects.

Then come waterlogging and salinity which affect respectively 13 and 11 million ha. More drainage would be needed. As for floods, especially in the eastern plains, they are far from being controlled as we can see with the devastating floods from the Kosi in 2008. Besides, there are wide tracts of lowlands which suffer from excess water even under a normal monsoon so that either crops are not possible or farmers grow broadcast floating paddy of a very low yield.

High yielding seeds renewal is not done every four to five years so that they lose their qualities. Since the beginning of the GR, all over Asia, there has been an unbalanced use of N-P-K chemical fertilisers, which in the long run damage the soil. Pest control is often inadequate. The sales of chemical fertilisers, of pesticides, of seeds suffer from all kinds of adulterations.

At the moment, when agriculture is becoming more sophisticated, especially in the fruit and vegetables sectors, research and extension services have fallen behind. Research institutes are short of money and lack 1819 scientists and 1960 technical and administrative staff, according to a survey of 2006. A number of issues have become serious, like soil tests and the resort to micronutrients. There is growing concern about the impact of the wheat-rice rotation in the northwest of India, going along rather sluggish yields.

As for areas mostly in peninsular India, watershed development, water harvesting, dry farming techniques can improve the yield of sorghum up to 1000-1500 kg/ha but prospects of a second crop in the dry season are limited by the lack of irrigation. Mango and cashewnut trees can grow on poor soil, provided they are carefully tended just after plantation. In all these fields, progress is far from spectacular, due partly to the complexity of the tasks, partly to lack of the State governments’ commitments. As a result areas remain vulnerable to a bad monsoon. For bajra, yields can fall by half or more between good and poor rains. Pulses are not in a better position.

In China, the northern plains, like the northwest of India, have been saturated with tubewells paving the way for the GR with wheat followed by maize, or towards central regions wheat followed by cotton. Today, due to excess pumping the water table is falling as well as the supply of water. There are also serious problems in water supply to cities and industries. A huge project is under construction in order to bring through canals the excess water of the lower Yangzi to the north. In central and southern China the rainfall is higher and there are plenty of rivers, ponds and lakes used for irrigation by low lift pumps Elsewhere one may come across tubewells.

Since the early 1980s, one gathers complaints about the maintenance of irrigation works. Only 40 per cent of the water from canals or lakes reach the plants. There may be also power cuts for tubewells and low lift pumps, but on a more limited way than in India. Following the collapse of a small dam, the China News Agency (April 20, 2007) mentioned that out of 85,000 reservoirs, 35,000 are in such poor condition that they are “time bombs”.

Flood control, a very serious problem in central and southern China, relies on strong traditions since ages. Many works have followed after 1949 with dykes and drainage systems. The maintenance should deserve more attention.

As in India, there are countless complaints on fertiliser and pesticide adulterations, not infrequ-ently with the connivance of local authorities. The latter may also authorise the sale of prohibited pesticides. The proper balance of N-P-K fertilisers is also not assured, but this may be partly offset by a larger use of organic fertilisers.

Following decollectivisation, the extension services have suffered, a number of cadres entering local business. As for research, it is in a better situation than in India. Research expenditures as a percentage of agricultural gross product amounts to 0.49 per cent in China versus 0.33 per cent in India, 2.4 per cent in developed countries. (See Economic and Political Weekly, June 28, 2008)

Towards the Future

AGRICULTURAL requirements, mostly food and textiles, are determined by population increase (+0.8 per cent per annum in China, +1.6 per cent in India) and by changes in consumption. Both countries follow the pattern of most countries enjoying a substantial rise in income. Foodgrain demand is falling, when people begin to afford a better diet: increased consumption of edible oil, sugar, fruit and vegetables, meat and fish in China, milk and eggs in India.

In China, as far as the major crops are concerned—foodgrain, cotton, oilseeds—the prospects of further growth are limited by the already high yields achieved. Some new paddy varieties might reach average yields of 7000 kg/ha per crop versus 6000 today. There is perhaps some margin of increase for wheat provided irrigation is improved in the northern plains which is not so sure. It is doubtful that cotton could go beyond the present very high yield of 1100 kg/ha (lint). One may perhaps reclaim some more land but it would only compensate partly the losses of land taken by industries and cities. Rainfed crops which supply only a small amount of grain may enjoy some small improvement.

According to official estimates, grain and soya beans imports could reach 10 per cent of the requirements in 2010, versus an output of 510 million tonnes (490 million tonnes in 2006).

Even in an optimistic perspective, increases in output will be quite limited. Besides, as the demand for feedgrian and soya beans keeps on growing to feed pigs, cattle and poultry, the consumption of these keeps on rising. Soya bean imports have reached 30 million tonnes versus an output of 18 million tonnes in 2007. It seems likely that China will soon become a net importer of maize. As for cotton, in 2006 imports amounted 3.8 million tonnes and the local production 6.7 million tonnes.

For all these reasons the basic idea of manoeuvre is to push further exports of meat, fish, fruit, vegetables to cover the cost of agricultural imports. The deficit between both fell from $ 2 billion in 2004 to half in 2006, but rose again in 2007.

India can, like China, push further the output and exports of fruit, vegetables, marine fish, flowers (see below), but there is also considerable room for increasing foodgrain and cotton yields, even if it may prove difficult or not possible to reach the present Chinese yields when considering Chinese traditions. The margin of progress in the GR districts with already 3500-4000 kg/ha of wheat and 3500 of clean rice (about 5000 kg paddy) is not so large, unlike what could happen in the eastern plains of Bihar, Assam, coastal Orissa, to some extent also in West Bengal. Irrigation could reach 80-90 per cent of the cropped area (30 to 50 per cent nowadays or only eight per cent in Assam) leading also to much more double cropping. All these areas enjoy good alluvial soils, plenty of ground and surface water combined with a fairly high rainfall. We may also remember that the lower Ganges Basin has been for many centuries one of the main granaries of India, feeding the large Mughal cities, exporting rice to South-East Asia, sugar to the Middle East, cotton textiles to many Asian countries and to Europe. It was only at the end of the 19th century that Punjab replaced the eastern plains as a major supplier of cereals and cotton. According to my rough estimates, at least 30 million tonnes of extra rice, wheat, maize could be gathered with average yields of 3000 kg/ha of clean rice (4500 kg/ha paddy). Today in Bihar, coastal Orissa, Assam average yields amount to 1000-1200 kg/ha of clean rice (rainfed).

What is disturbing is to see that already in 1984, S.R. Sen and his committee submitted a most comprehensive report to the Reserve Bank on Agricultural Productivity in Eastern India. All the weaknesses mentioned above were carefully analysed and remedies recommended, but little progress has been achieved, except partly in West Bengal. One could also mention a number of more general alarm bells rung, since the 1990s if not earlier, by a number of experts, Dr Swaminathan, Y.K. Alagh, A.Gulati, C.H. Hanumantha Rao or the Ministry of Agriculture.

Coming back to the GR districts of the northwest, they could boost the latest trends of reducing the wheat-rice rotation by plantations of orchards (mangoes, oranges) and vegetables which fetch a much higher income, require also much less water and electricity than cereals.

In the poor physical milieux, as hinted above, watershed development projects would deserve more encouragement in order to improve the output of coarse grains, pulses, mango and cashewnuts plantations.

The Case of Fruit, Vegetables, Livestock and Milk Marine Fish

ALTHOUGH considerable progress has been already achieved, China has proceeded much faster except for milk because cattle is much less numerous than in India and it is only recently that the Chinese are showing some taste for milk (milk products imports grew by 20 per cent a year, 4.8 million tonnes in 2006).

Output in million tonnes China 2006 India 2006-07
Vegetables 550 82
Fruits 161 58
Meat 50 4
Chicken 14.7 2
Milk 32 100
Fish (marine and inland) 51 66

What is disturbing in India is the slowdown in the progress of fruit and vegetables, when comparing the periods 1990-97 to 1997-2005. As for yields, they do not seem to have increased much.

Very serious shortcomings enter the picture with poor post-harvest technologies leading to post-harvest losses of vegetables and fruit which amount in both countries to about 30 per cent. There is lack of cold storage houses and trucks, poor packing, transport on bad roads in India, lack of quality control. So on both sides one comes across vegetables and fruit with residues of pesticides sold on local markets but rejected by the importing countries, a large number of intermediaries in India between producers and consumers.

In spite of these defects, China has become the world’s number one producer of apples ahead of the USA and is flooding the East Asian markets. Clever Chinese farmers in the neighbourhood of Shanghai have started growing broccolis. Their exports to Singapore and Japan have wiped out the previous supplies from the USA. Chinese marine fish exports to the latter have reached one quarter of the total outside supplies.

Total exports of agricultural and allied products reached $ 9 billion for India in 2004-05 versus $ 29 billion for China in 2005.

The Tasks Ahead

THE diagnoses, as presented above, are clear in Beijing and New Delhi among the experts of agriculture, but this is not the case with a number of other persons among the elites on both sides. It is, for instance, disquieting to hear important Indian politicians claiming since the 1980s that “it is time to introduce the Green Revolution in rainfed districts”. Already in 1975 the great anthropologist, M.N. Srinivas, was writing: “The ignorance of the urban middle class about rural life, agriculture and values would not matter much, but for the fact that officials and specialists hail from it and have an important say in decisions which affect villages.” (M.N . Srinivas, On Living in the Revolution, Delhi, Oxford University Press, 1992, pp. 79-80) Thirty years later the gap has become much larger, which partly explains the neglect of agriculture until 2004. Such differences do occur also in China. Under Mao Zedong, senior officers had spent much time in villages. You could speak of tubewells and urea even with diplomats in cocktail parties in Geneva. Today, the new urban elites are cut off from the farmers. I could see it in my last rural survey in 2006. My interpreters from urban origin were discovering their countrymen and their problems.

It is difficult to compare in a relatively precise manner subsidies versus directly productive public expenditures, but my impression is that the former as well as special anti-poverty programmes are more widespread in India than in China. Besides, having a much higher GDP, China is able to devote more funds to agriculture, rural infrastructure, education and health than India. The Central Government devoted $ 50 billion to rural areas in 2007 and budgeted $ 80 billion for 2008. According to Mohan Guruswamy, Chairman of the Centre for Political Alternatives in New Delhi: “On paper over Rs 1500 billion (about $ 40 billion) are spent by the Government on agriculture, but, out of that, Rs 1200 billion is subsidy.” (Financial Times, August 25, 2008) Special programmes for the poor (the National Rural Employment Guarantee Act 2005, the Farmers Waiver Loans for owners below two ha, 2008, the Bharat Nirman Programme…) no doubt lead to success stories, but the achievements are very uneven Statewise, a number of works (rural roads, water harvesting, land development) may be of a low standard for lack of staff and poor adminis-tration. There is also leakage of funds. Would it not be preferable to devote more public investments and O&M expenditures to infrastructures and agriculture which bring permanent benefits to most people including the poor? I have often come across landless agricultural workers who would much prefer such expenditures than anti-poverty programmes.

Money is only part of the issues. The commitment of the ruling elites in both cases will be decisive. On China, I am not able to make many comments. In India, I had seen at work the architects of the GR, the political will of Lal Bahadur Shastri and thereafter of Indira Gandhi, the Minister of Agriculture, C. Subramaniam, assisted by a small team of outstanding ICS and IAS officers with a solid experience of agriculture and village life. As Rakesh Mohan, Deputy-Governor of the Reserve Bank, wrote: “Agriculture needs a new mission comparable to the Green Revolution.” (Economic and Political Weekly, March 18, 2006) The new generation have to show a similar calibre.

We must also bear in mind that in China and in India, the rejuvenation and expansion of agriculture are today much more complex and more expansive than the GR. In the mid-1960s it was relatively easy to boost yields from a low basis and, in India, first came ready-made new seeds thanks to the able Rockfeller and Ford Foundations’ Institutes in Mexico and in the Philippines. American cooperation came in the early 1970s in China. Today, the tasks are wider, from basic crops to animal husbandry, meat, fish, fruit and vegetables. Marketing channels need many changes. Rural infrastructures (electricity and roads) need considerable improvements in India which, even in the best hypothesis, will take a number of years to achieve.

New and more complex saving techniques like drip systems and sprayers are beginning to be introduced on both sides. They will take some time and need various government supports to spread on a large scale. Then comes ground water. In a remarkable report (India’s Water Economy…, 2006), J. Briscoe and R.P.S. Malik, under the auspices of the World Bank, emphasise the needs of drastic changes in the irrigation policy. The future of groundwater use is limited, except in the eastern plains, so that one should concentrate on the promotion of reservoirs and canals, a much more costly and complex task than encouraging private tubewells which played such a large role in the GR. As for China, there are still many possibilities to tap surface water in the central and southern provinces but I wonder how the groundwater shortage in the northern plains will be solved, even when taking into account the future canal coming from the lower Yangzi.

The post-harvest losses referred to above show that there is a large scope for improvements which again are not so simple. Much hope is put in Beijing as in New Delhi on contract farming and other links between peasants and companies developing retail trade and large trade centres, While, in China, organised retail trade amounts to 30 per cent of the total retail trade, in India it is only four per cent, which shows the high potential, particularly in the food and agribusiness sector. Several large Indian corporations, Reliance, Bharti, Tata and others, are beginning to get involved on a large scale in this new field for them. If there are no abuses, such systems seen also in China could bring a score of benefits to farmers who could be supported by extension services organised by the companies, guaranteed prices, possibly credit. Cutting the number of intermediaries between the farm and the final market would reduce costs while assuring a better quality of the products. The higher quality would also stimulate exports. Besides, it is well known that fruit and vegetables give a much higher return than the main crops. There are also more job opportunities for the poor.

While highly welcome, such changes may take time to expand on a large scale. First come the cadres of the companies. They do not have the long experience of Hindustan Lever which, when recruiting young urban people, high class/castes, from the top business schools, sends them first for six weeks to live in a village and get some experience of village life and problems. (Hindustan Lever has always given much importance to its rural markets for sales of its products.) One may also expect teething troubles as faced by Pepsi Co when the they started to produce potatoes in Punjab for potato chips. As seen in China, such activities expand mostly in already advanced rural areas not far from big cities which makes marketing easier. That is why poorer and more isolated districts may not, at least in the first stage, enjoy such activities.

Improving the administration, especially at the district level, could bring plenty of benefits without many costs in both countries: curbing malpractices and corruption, abuses of local authorities, carelessness (laparvahi) of officials not properly supervised. Irrigation departments in India would need thorough overhauling especially now when surface water (canals, reservoirs) should become more prominent. While I am not too clear about Chinese district officers, in India one could make better use of the IAS’ directly recruited officers especially District Magistrates/Collectors who, as seen quite often, may have a greater impact on development than the Panchayati Raj. The prerequisite would be to curb the frequent transfers, as in UP, where senior officers are transferred after less than one year because of interferences by local politicians.

The renewed US-India cooperation in the field of agriculture could also help, but here again the tasks ahead are less easy than during the GR. At that time Ford and Rockefeller played an important role. Today one still comes across very good experts at both Foundations as well as at the IFPRI (International Food Policy Research Institute) in Washington D.C. with a branch in New Delhi under Ashok Gulati. However, there has been a worldwide decline of interest in agriculture concerning the developing countries. The number of American agronomists working in the developing countries has decreased by 80 per cent in the 1990s, according to John Mellor, one of the best US experts on Asian agriculture. The World Bank also complains of the lack of experienced cadres at a time when, after rediscovering agriculture (!), they intend to become much more active in this field and also in infrastructure projects. (See the 2007 World Report)

To conclude, there is much room for agricultural development in spite of its growing complexity. A faster and more diversified growth would stimulate pull and push effects between agriculture, industries and services and thus accelerate the overall growth of the economy. No less important would be the reduction of poverty through more job creation. The key issue is the commitment of the ruling elites. In Delhi, as in Beijing, the present leaders are well aware of the challenges and keep on emphasising the need to push agriculture and alleviate poverty but it is not so easy to have the message percolate down to the lower echelons of implementation, to reduce the mental gap between urban elites and villagers, to curb narrow-minded vested interests. As for the farmers, they have shown remarkable resilience in the past. With adequate government support there is no reason why they should not proceed further. Finally, the issues are even more important in India where agriculture carries more weight than in China on GDP and labour force.

[Most data come from the following annual reports: The Statistical Year Book and The Agriculture Year Book, Beijing, The Economic Survey and Agricultural Statistics at a Glance, New Delhi. This paper is an updated and expanded version of a paper published by Sapra Bulletin, New Delhi, 2007]

Gilbert Etienne is a Professor Emeritus, Institute of International and Development Studies, Geneva.

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