Overhaul of Farm Sector Imperative

As China's entry into the World Trade Organization (WTO) nears, the current agriculture management system should be reoriented towards the global market.

The government should introduce agricultural policies that will make it easier for domestic crops to enter the international market, an article in China Economic Times said.

Today, the government's agriculture administration system is still a legacy of the planned economy.

From a crop's harvest to its arrival at the dinner table, food has to go through departments ranging from storing to distribution and sales. For example, the food for local sale is subject to the internal trade departments, and food for export is under the authority of the foreign trade departments.

The separate management systems not only raise the cost of the farm products but also foster industrial monopoly and regional protectionism, the article said.

Without an integrated and effective management system, it is hard for domestic products to compete in the foreign markets.

Today's agriculture policies are a throwback to a time when the economy was mainly devised to solve food shortages without much concern for quality.

As a result, many domestic products are not qualified for the international market.

For instance, when mad cow disease hit the European beef market, it should have been a good opportunity for domestic livestock products. But since home livestock is not in line with international practice, domestic farmers could not come up with competent beef products for the European market.

Another handicap for the growth of the agriculture industry is the absence of a unified national market, the article said.

As a result, the price is not decided by the market, and farmers cannot get correct market response signals.

Their farming decisions are based almost entirely on street information.

So the government should map out a national and unified agricultural management system that integrates the administration over each process, including production, processing, marketing, storage and foreign trade.

The government also should introduce favorable policies to help the domestic farm producers sharpen their competitive edge.

A special fund for crop selection should be established to promote high-quality and high-yield farm produce and narrow the gap between the home produce and the foreign products.

The market also demands the establishment of a quality pest prevention system.

For products with export potential, the government should subsidize the producers in line with WTO rules to protect their enthusiasm.

In addition, an import monitor system should be set up to prevent industrial damage caused by illegal dumping of foreign products. Protection mechanisms including anti-dumping and anti-subsidy measures under the WTO framework should be initiated to protect the development of home products.

The domestic farm produce market also needs consolidating. The government can nurture some giant players in farm production and processing to participate in the global competition.

An agriculture trade association should be organized to provide information about home and foreign markets, market entry regulations, policy constancy services and cross-border trade disputes and lawsuits.

The government should encourage farmers to plant organic food and set up the domestic green food certification system according to international standards. This would make Chinese products more competitive in the international market.

Today, consumer demand is growing for quality products, and local products have to withstand global competition after China enters the WTO.

Domestic farm product manufacturers should strive to provide high-quality products that meet the demands of international markets, the article urged.

They should provide agricultural products with unified standards and specifications as strictly as is done with industrial products.

Food safety is another important aspect. A global credibility crisis about farm produce exists, and it grew worse when mad cow disease surfaced. To join the global competition, we should win the customers' trust in our products by paying more attention to food safety.

To cushion the impact brought on by China's entry into the WTO, the article also suggests implementing some better trade policies.

Based on WTO rules, the quota management system can be initiated. This will only place import quotas on certain food basics such as cotton, grain and sugar.

Imports beyond the quota should be charged a high tariff.

(China Daily 10/09/2001)

In This Series

Billions Earmarked to Control Soil Erosion

Funds Augmented to Spark Agricultural Economy

Lending Project Enriches Poor Farmers

New Technology Funds Increased for Farmers

China Sets Standards for Pollution-free Farm Products

Government Urged to Support Farm Disaster Relief



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