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Current Trend and Reform Challenges that the Agriculture Industry Faces

China Review News carried an article on the current trend and reform challenges that the agriculture industry faces. These include the difficulties and challenges of a more complicated environment; the demand to speed up the modernization of an industry that is driven by growth in industrialization; informatization and urbanization; meeting demands while facing the burden of environmental issues and a shortage of resources.

According to the article, the current structure of the farmers’ population has changed with the growth of industrialization and urbanization. Some farmers have chosen to relocate to urban areas while some have remained as full time or seasonal farmers. The rest have chosen to be involved in the business and service segments of the agricultural industry. The formation of the new farm structure, such as family farms and farmers’ professional cooperative units that are equipped with some level of business skill and a strong cash flow have become the new driving force behind the modernization of China’s agricultural industry. Another trend is the increase in the transfer of land-use rights to individual farmers, cooperative units, and businesses. In the meantime, due to an increase in land lease costs and the cost of raw materials, the cost of production is climbing and profits are down. The article also mentioned that the growth rate in the agriculture industry will be hard to maintain due to a reduction in farm land, extreme weather conditions, worsened insect infestation, and diseases. Meanwhile the demand in consumption keeps growing due to population size as well as increases in the industrial demand for the use of wheat and corn. The article also mentioned the phenomenon that the land quality has been deteriorating due to an overuse of fertilizer. China has 10 percent of the farm land in the world but it consumes one-third of the world’s fertilizer production. The article stated that the agriculture industry is a high risk industry due to areas such as an inadequate pricing structure; an unstable income for the farmers; recent frequent occurrences of extreme weather conditions and natural disasters; and lack of proper farmers’ insurance policies available to the farmers.

Source: China Review News, March 15, 2014