Agricultural Policy Monitoring and Evaluation 2024

8. China

Main findings

Support to agriculture

The share of support to agricultural producers in the People’s Republic of China (hereafter “China”) averaged 14% of gross farm receipts in 2021-23. This is almost three times higher than in 2000-02 but remains on par with average support (14.2%) between 2016 and 2019, when market interventions were reformed for soybeans, rapeseed, cotton, and maize.

Market Price Support (MPS) remains the main form of support, generated through both domestic price support policies and various border measures on imports. Overall, more than two-thirds of support to producers is in the form of potentially most-distorting transfers, a consistent pattern since 2000-02.

Payments based on area planted have consistently increased since 2014 due to the reforms discontinuing intervention prices for several key commodities. Area payments to maize and soybeans particularly increased since 2020 to boost production in these sectors and meet higher demand for feed. Area payments in the Agricultural Production Development programme continued to increase in 2023 to offset rising inputs and production costs, while area payments for disaster relief increased following severed flooding and crop damage across many regions of the country. These contributed to the overall increase in budgetary support.

Producers of imported commodities (such as pig meat, milk, wheat, rice, cotton, soybeans, and sugar) benefited from transfers equal to between 10.3% and 50.4% of commodity receipts in 2021-23. Prices received by farmers were 14% higher than world prices on average in 2021-23. Higher domestic producer prices than reference prices on average in 2021-23 indicate an implicit tax on consumers, with a percentage consumer support estimate of -11.8%.

General services support amounted to 10.2% of total support to agriculture in 2021-23. These covered three main categories of services: public stockholding; development and maintenance of infrastructure; and the agricultural knowledge and innovation system. The General Services Support Estimate (GSSE) represented 1.6% of the value of agricultural production.

The Total Support Estimate (TSE) for agriculture as a share of Gross Domestic Product (GDP) remained stable and relatively high at 1.7% in 2021-23.

Key recent policy changes

China adopted a new Food Security Law at the end of December 2023, which came into force in June 2024. The Food Security Law includes chapters on the protection of agricultural land from urbanisation, grain production, grain reserves, grain marketing and processing, and access to food in emergency situations. The law’s General Provisions stipulate that the national food security strategy is based on self-reliance, guaranteed domestic production, moderate imports, and technological support.

The 2024 No. 1 Document, released in February 2024, includes a specific focus on “green agriculture” that promotes the integrated protection and restoration of rural ecosystems. The No. 1 Document calls for: a reduction complemented by efficiency improvements in the use of chemical fertilisers and pesticides; the promotion of circular farming models; an analysis and remediation of heavy metal pollution sources in cultivated land; a reduction of antibiotic use in animal husbandry and the prevention and control of major animal-borne diseases and key zoonotic diseases.

Minimum purchase prices were increased for wheat in September 2023 and for early indica rice in February 2024. As of April 2023, the target price policy for Xinjiang cotton is extended for the period 2023‑25 and caps the volume of Xinjiang cotton entitled to the subsidy at 5.1 million tonnes annually, down from 5.4 million tonnes in previous years.

Payments for disaster relief increased significantly in 2023 in response to severe flooding and crop damage across several regions. In June 2023, the Ministry of Finance (MOF) allocated CNY 200 million (USD 27.8 million) following prolonged rain in Henan province, a major wheat producing region. In August 2023, the MOF also allocated CNY 732 million (USD 102 million) in disaster relief funds to support the recovery of agricultural production in nine provinces, following crop damage and flooding caused by Typhoon Doksuri. In August 2023, the MOF allocated CNY 2.4 billion (USD 333 million) for northern provinces following heavy rains and flooding that affected soybeans and maize producers.

China signed in 2023 several Free Trade Agreements (FTAs): with Ecuador (May 2023), Nicaragua (August 2023), and Serbia (October 2023). Under these agreements, China will provide enhanced market access for various agro-food products, such as bananas, cut flowers, cocoa, coffee, meat, sugar, peanuts.

Assessment and recommendations

• The sustained growth in agricultural output in China over the last decade has been increasing pressures on natural resources such as land and water. Nutrient surplus intensities for nitrogen and phosphorus remain at high levels. China has been introducing sustainable agricultural policies, approaches and innovations, aiming to improve productivity and ensure food and nutrition security, while balancing the need to restore soil health and reduce pollution associated with agricultural production. However, these do not include measurable targets for sustainable productivity growth and the situation remains challenging.

• More balanced agricultural support policies would help enhance innovation and long-term sustainable productivity growth. Reforms introduced until 2019 (i.e. replacing intervention prices for key crops with direct payments based on planted area and reducing minimum support prices for wheat and rice) have been a step towards rebalancing this policy portfolio, encouraging sectoral diversification, and starting to address the burden of public stockholding costs, which remain the largest expenditure in general services support. Such reforms could be gradually extended to include wheat and rice. If direct payments to farmers are maintained over a longer-term, the link between these payments and production decisions should be loosened, for instance by providing payments on a historical area basis, and ‘greened’ by making them conditional on environmentally friendly production practices.

• Overall, long-term climate change adaptation efforts, such as collaborative planning and multi-disciplinary research, could be better integrated with efforts to help farmers accommodate climate risks in the short term, and those backing incremental changes in the medium term. China could consider additional efforts to measure adaptation outcomes, such as assessing adjustments in production practices done in demonstration areas.

• China’s Nationally Determined Contribution (NDC) recognises agriculture’s importance to its economy-wide emissions-reduction target (peak CO₂ emissions by 2030) and its objective to achieve carbon neutrality by 2060, but no targets have been set for agriculture. Nevertheless, several sector-specific policy efforts aim to mitigate greenhouse-gas (GHG) emissions, and the monitoring of their impacts on GHG emissions should be improved against programme-specific targets. The National Agriculture Green Development Plan 2021-25 can play a role by providing the tools to monitor GHG mitigation practices at farm level and along the value chain.

• To establish a solid framework for agri-environmental policies, China should define environmental targets adapted to local ecological conditions and strengthen monitoring mechanisms for the enforcement of environmental regulations. To this end, regular soil testing under the Soil Environmental Information Platform and Monitoring System (part of the 2019 Soil Pollution Prevention and Control Law) needs to be implemented and can set the stage for similar efforts relating to water use in agriculture.

• As water resource scarcity is projected to remain a major constraint to productivity growth in Chinese agriculture, further efforts are necessary to improve water management. More specifically, in implementing the 2021 regulation on groundwater conservation and protection, a comprehensive review of water governance could better define responsibilities, remove conflicts, and ensure effective policy implementation.

• Public expenditures on general services increased but these have not kept pace with sectoral growth. Restructuring public expenditure towards general services can be achieved by scaling down input subsidies such as those to purchase farm machinery, and by ensuring that support through direct payments has only a transitory role in supporting farmers’ adjustment to a new market environment. Enhanced public investment in R&D can support more efficient use of variable inputs and reduce environmental harm. Further investments in sanitary inspection and control services will be necessary to implement the Food Safety Standards updated in 2023.

• Reforms to land-transfer rules have contributed to the emergence over the last two decades of large family farms, co-operative farms, and farms managed by agro-business companies. To continue improving agricultural productivity, increased investments in education and training, and enhanced access to financial services should complement these reforms.

Development of support to agriculture

Figure 8.1. China: Development of support to agriculture

Table 8.1. China: Estimates of support to agriculture

Million USD

	2000-02	2021-23	2021	2022	2023p
Total value of production (at farm gate)	270 118	1 911 713	1 832 931	1 972 378	1 929 829
of which: share of MPS commodities (%)	75.76	81.91	83.53	82.50	79.70
Total value of consumption (at farm gate)	281 331	2 123 101	2 043 278	2 201 860	2 124 164
Producer Support Estimate (PSE)	14 354	277 531	291 133	277 914	263 544
Support based on commodity output	7 329	208 581	221 005	209 177	195 560
Market price support¹	7 329	205 247	217 592	205 831	192 317
Positive market price support	11 162	208 978	224 099	210 436	192 399
Negative market price support	-3 833	-3 731	-6 507	-4 604	-82
Payments based on output	0	3 334	3 413	3 346	3 243
Payments based on input use	5 684	18 170	18 609	18 232	17 669
Based on variable input use	1 414	4 410	4 524	4 422	4 286
with input constraints	0	0	0	0	0
Based on fixed capital formation	3 026	12 077	12 363	12 121	11 747
with input constraints	0	0	0	0	0
Based on on-farm services	1 244	1 683	1 722	1 689	1 637
with input constraints	0	0	0	0	0
Payments based on current A/An/R/I, production required	533	34 523	34 875	34 190	34 503
Based on Receipts / Income	533	1 793	1 370	1 342	2 667
Based on Area planted / Animal numbers	0	32 730	33 505	32 849	31 836
with input constraints	0	0	0	0	0
Payments based on non-current A/An/R/I, production required	0	0	0	0	0
Payments based on non-current A/An/R/I, production not required	370	15 098	15 456	15 153	14 686
With variable payment rates	0	0	0	0	0
with commodity exceptions	0	0	0	0	0
With fixed payment rates	370	15 098	15 456	15 153	14 686
with commodity exceptions	0	0	0	0	0
Payments based on non-commodity criteria	438	1 159	1 189	1 162	1 127
Based on long-term resource retirement	438	1 159	1 189	1 162	1 127
Based on a specific non-commodity output	0	0	0	0	0
Based on other non-commodity criteria	0	0	0	0	0
Miscellaneous payments	0	0	0	0	0
Percentage PSE (%)	5.18	13.96	15.27	13.59	13.17
Producer NPC (coeff.)	1.03	1.14	1.16	1.14	1.11
Producer NAC (coeff.)	1.05	1.16	1.18	1.16	1.15
General Services Support Estimate (GSSE)	11 861	31 595	32 335	31 713	30 736
Agricultural knowledge and innovation system	1 347	4 461	4 538	4 492	4 353
Inspection and control	349	2 053	2 102	2 061	1 997
Development and maintenance of infrastructure	3 424	14 110	14 445	14 161	13 725
Marketing and promotion	0	419	429	421	408
Cost of public stockholding	6 741	10 551	10 822	10 579	10 253
Miscellaneous	0	0	0	0	0
Percentage GSSE (% of TSE)	45.03	10.23	10.00	10.24	10.44
Consumer Support Estimate (CSE)	-8 512	-250 637	-284 139	-249 145	-218 625
Transfers to producers from consumers	-8 688	-227 422	-255 179	-232 923	-194 162
Other transfers from consumers	-1 119	-47 501	-59 128	-37 861	-45 514
Transfers to consumers from taxpayers	128	0	0	0	0
Excess feed cost	1 167	24 286	30 167	21 639	21 051
Percentage CSE (%)	-3.03	-11.75	-13.91	-11.32	-10.29
Consumer NPC (coeff.)	1.04	1.15	1.18	1.14	1.13
Consumer NAC (coeff.)	1.03	1.13	1.16	1.13	1.11
Total Support Estimate (TSE)	26 343	309 125	323 469	309 628	294 280
Transfers from consumers	9 807	274 922	314 307	270 784	239 676
Transfers from taxpayers	17 655	81 704	68 290	76 705	100 117
Budget revenues	-1 119	-47 501	-59 128	-37 861	-45 514
Percentage TSE (% of GDP)	1.97	1.72	1.82	1.72	1.64
Total Budgetary Support Estimate (TBSE)	19 014	103 879	105 877	103 797	101 962
Percentage TBSE (% of GDP)	1.42	0.58	0.59	0.58	0.57
GDP deflator (2000-02 = 100)	100	377	362	385	384
Exchange rate (national currency per USD)	8.28	6.76	6.45	6.73	7.08

Note: p: provisional. NPC: Nominal Protection Coefficient. NAC: Nominal Assistance Coefficient. A/An/R/I: Area planted/Animal numbers/Receipts/Income. 1. Market Price Support (MPS) is net of producer levies and excess feed cost. MPS commodities for China are: wheat, maize, rice, rapeseed, soybean, sugar, milk, beef and veal, sheep meat, pig meat, poultry, eggs, cotton, apples, groundnuts, peanuts, exported fruit and vegetables, and imported fruit and vegetables.

Source: OECD (2024), “Producer and Consumer Support Estimates”, OECD Agricultural policy monitoring (database), https://data-explorer.oecd.org/.

Policy landscape

Main policy instruments

The No. 1 Central Document is the most important policy document in China, issued jointly by the Central Committee of the Communist Party of China (CCCPC) and the State Council. This document determines the most important policy issues and focus of the year. Issues related to agriculture, farmers and rural areas have consistently been selected as the topic of this document since 2004.

Market price support is the main form of support to Chinese farmers. It is provided through both domestic price policies, such as the minimum purchase prices for wheat and rice, and trade policies including tariffs, tariff rate quotas (TRQs) and state trading. Budgetary transfers to producers of specific commodities include compensatory and direct payments. Compensation payments cover the difference between pre-determined target prices and actual market prices for cotton producers and are a combination of output payments and area payments. Direct payments based on area planted are provided for soybeans and maize producers. General services to the sector focus on developing agricultural infrastructure (including irrigation and drainage facilities) (41% of total spending on general services in 2021-23) and public stockholding of grains (35% in 2021-23). Support to agricultural knowledge and innovation is also significant (15% in 2021-23).

The minimum purchase prices for wheat and rice are set every year by the National Development and Reform Commission (NDRC) in consultation with the Ministry of Agriculture and Rural Affairs (MARA) and other government institutions. Their application is limited to major wheat and rice producing provinces. The minimum purchase prices for wheat and rice are announced before sowing seasons, and only apply for several months after the harvest. The state-owned China Grain Reserves Corporation (Sinograin) and other state-owned companies are mandated to make intervention purchases in case market prices fall below specified thresholds. Only grain of national grade 3 or higher can be purchased by state-owned companies at minimum prices.1 However, in exceptional situations where there are large volumes of grain below grade 3, such as in cases of extreme weather events, provincial authorities can also purchase these to be held as temporary reserves. Government procurement can begin only when the market price has fallen below the minimum price for three consecutive days and must be suspended when the market price rises above the minimum for three consecutive days. Ceilings on the volumes of grains procured at minimum purchase prices during a marketing year have been set at 37 million tonnes for wheat (since 2019) and at 50 million tonnes for rice (since 2020).

The Agricultural Production Development programme combines a subsidy paid per hectare with direct payments for grain producers, subsidies for agricultural inputs, and subsidies for improved seed varieties.2 Subsidies are also available for purchases of agricultural machinery, land consolidation, irrigation, agricultural insurance, returning farmland to forests and excluding degraded grassland from grazing.

Innovation for sustainable productivity growth

The sustained growth in agricultural output in China over the last decade has been increasing pressures on natural resources such as land and water. Primary agriculture is responsible for 6.7% of China’s gross GHG emissions, slightly lower than the OECD average. Most agricultural emissions originate in livestock farming (43%), followed by emissions from agricultural soils (34%) and rice planting (22%). While nutrient surplus intensities for nitrogen and phosphorus have been declining over the past two decades, these remain at high levels (see Policy context section below).

Strategic planning

China aims to sustain high productivity and improve food and nutrition security while balancing the need to restore soil health and reduce pollution associated to agricultural production. The focus is increasingly on technological solutions to increase productivity while addressing environmental challenges.

The 14^th Five-Year National Agriculture Green Development Plan 2021-253 includes the following climate change mitigation policy objectives: 1) reduce usage and increase application efficiency of fertilisers and pesticides; 2) build a green and low-carbon agri-food supply chain to improve production quality, efficiency, and competitiveness; 3) carry out research and apply agricultural green production technologies such as soil improvements and waste recycling; and 4) improve compensation mechanisms for ecological protection using a price mechanism for “green agri-food products” (State Council, 2021[1]).

The National Agricultural Sustainable Development Plan 2015-30 sets goals and approaches to protect natural resources and encourage sustainable farming practices. It targets improved production quality and efficiency by setting priorities for different zones according to their capacity for agricultural production, resource endowments, and ecological characteristics.

China ratified the Paris Agreement on Climate Change on 3 September 2016 and submitted its first Nationally Determined Contribution (NDC) in 2016 and updated it in 2021. While there are no specific targets for the agricultural sector, the role of agriculture, land-use change, and forestry is recognised in the NDC. The commitments covered by the updated NDC are to: 1) have CO₂ emissions peak by 2030 and carbon neutrality by 2060; 2) to lower the carbon intensity of GDP to 65% below 2005 levels by 2030; 3) to increase the share of non-fossil fuels to around 25% of primary energy consumption; 4) to increase forest stock volume by 6 billion m³ from the 2005 level; and 5) to bring total installed capacity of wind and solar power to over 1.2 billion kW by 2030 (State Council, 2021[2]).

The 2016 NDC called for achieving zero growth in fertiliser and pesticide use by 2020, which MARA reported as achieved in 2018. The NDC also sets broad objectives for controlling methane emissions from rice fields and nitrous oxide emissions from farmland, as well as promoting efficient use of straw and agricultural waste (UNFCC, 2021[3]; Climate Action Tracker, 2021[4]).

The National Strategy on Climate Change Adaptation 2035 builds upon the 2014-20 adaptation strategy in four areas: (1) greater emphasis on early-warning systems and risk management; (2) sectoral adaptation tasks for agriculture and food security; (3) greater integration of national and regional adaptation strategies; and (4) strengthening financial support, science and technological support, and international co-operation on climate adaptation (State Council, 2022[5]). The national adaptation strategy considers geographic characteristics and spatial planning to ensure implementation is tailored to a variety of contexts.

Programme implementation

The Soil Pollution Prevention and Control Law establishes systems for agricultural land classification and management according to pollution levels and risks. The Ministry of Ecology and Environment (MEE) together with MARA and the Ministry of Natural Resources (MONR) are establishing a soil environmental monitoring system with a responsibility for local governments to conduct regular soil examinations.

Several forestry programmes, which target afforestation and improved forest management, support NDC objectives of increasing the forest stock volume and GHG emission reductions in Land Use, Land-use Change and Forestry (LULUCF). The Grain for Green programme, implemented since 2000, uses direct payments to incentivise farmers to re-establish forest and shrub vegetation on sloped cultivated land at risk of erosion.

The 2021 regulation on groundwater use sets out specific rules for the use, conservation, and protection of groundwater with the objective to enhance groundwater supervision and management. The regulation designates areas where the exploitation of groundwater is prohibited and entitles provincial-level authorities to address over-exploitation and pollution.

Research and innovation

An important approach is the use of demonstration zones to support the diffusion and adoption of technologies and improved agricultural practices. As part of the National Agricultural Sustainable Development Plan 2015-30, 220 dry-farming and water-saving agricultural demonstration areas were established in north and northwest China to promote technologies such as:

• water storage and soil moisture conservation

• rainwater harvesting and supplementary irrigation

• ridge tillage and furrow irrigation

• soil-moisture based on on-demand irrigation

• water-saving irrigation

• water and fertiliser integration

• drought and climate stress resistance

• water-resource efficiency.

In 2018, MARA compiled the Guidelines on Green Development Technologies for Agriculture 2018-30. These guidelines focus on the implementation of rural revitalisation strategies and sustainable development strategies. They support accelerating technological innovation for the green development of agriculture as well as improving the supply of green agricultural inputs and technologies. They also propose building a green-oriented agricultural technology system by 2030 and increasing agricultural productivity and resource use while steadily increasing yields.

Innovation in agricultural technology has been one of the major sources of agricultural productivity growth in China. Some of the most impactful agricultural innovations include high-yield crop varieties (both conventional and hybrid), Bt cotton, as well as innovative animal breeding and feeding management for livestock. The fourteenth Five-Year Plan 2021-25 encourages R&D in agricultural sectors and increased application and development of Internet of Things technologies for precision farming (e.g. monitoring crop fields using sensors, automating irrigation systems).

Trial programmes in northeast China show that investment in conservation agriculture4 has contributed to reduced wind and water erosion in soils, enhanced soil fertility, preserved soil moisture, and increased drought resistance. China has an objective to have 90 million ha of land farmed under a conservation agriculture system by 2025 (about 70% of arable land). Investments in research and innovation supported the development of tailored conservation agriculture practices for various climatic and soil conditions or cropping systems, including the black soil region in northeast China, the Loess Plateau and the oasis agricultural region in northwest China, the Huang-Huai-Hai double-cropping region, and the plain region along the Great Wall in northern China.

The China Climate-Smart Staple Crop Production project has been helping select new crop varieties with high yield and strong stress resistance. The project has also supported producers by optimising cropping structures and improving agricultural infrastructure. Demonstration areas covered by the project include applied new technologies, including fertigation technology,5 drone direct seeding for rice, self-propelled sprayers, electrostatic sprayers, rice-shrimp mixed farming, and green manure planting.

Recent policy developments

Domestic policy developments in 2023-24

Developments in the legal, institutional and strategic framework

A new Food Security Law adopted a new Food Security Law at the end of December 2023, which came into force on 1 June 2024. The Food Security Law includes chapters on grain production, grain reserves, grain marketing and processing, food access in emergency situations, and the protection of agricultural land from urbanisation. The law stipulates that the national food security strategy is based on self-reliance, guaranteed domestic production, moderate imports, and technological support.

The December 2023 annual Central Rural Work Conference (CRWC) formulated the overarching policy guidelines for agriculture and rural development in 2024. The 2023 CRWC reiterated that ensuring food security remains the top priority of China’s agricultural and rural development policies. The conference set the goal of producing more than 650 million tonnes of grain in 20246 by increasing yields as well as farmland quality through subsidies for high-standard farmland,7 with emphasis on the farmland in north-eastern black soil areas and plain areas. In terms of ensuring access to grains for consumption, the CRWC proposed to explore the establishment of an inter-provincial compensation mechanism between grain producing and consuming provinces, supervised by central and provincial authorities.

In February 2024, the Central Committee of the Communist Party of China and the State Council jointly released the annual No. 1 Central Document, outlining the priorities for rural revitalisation in 2024. The document emphasises the importance of “solidifying the agricultural foundation and promoting comprehensive rural revitalisation to advance China’s unique modernisation”.

To ensure food security, the 2024 No. 1 Document reaffirms the annual grain production target of 650 million tonnes, already included in previous years’ No. 1 Documents. The Document instructs local authorities to pursue an integrated approach to farmland protection that simultaneously accounts for grain quantity, quality, and farmland ecology. It also stresses the need to promote healthy diets. To achieve this, the following areas of action are highlighted:

• Prioritisation of northeast China, the northern China plains, and other farming regions with adequate water resources, for the construction of high-standard farmland. This includes improving irrigation conditions, modernising agricultural facilities, and supporting recovery and reconstruction of disaster-hit areas.

• Stricter farmland protection against illegal land use and improper transformation of degrade farmland. The role of agricultural technology innovation support for accelerating the revitalisation of the seed industry and for promoting the mechanisation of agriculture is stressed.

• Establishment of a comprehensive monitoring and early warning mechanism for the entire agro-food supply chain.

• Improving the layout of grain storage facilities.

• Reducing food loss and waste across the agricultural value chain by establishing a regulatory system that combines government supervision, industry self-discipline, and social supervision.

Regarding rural revitalisation, the No.1 Document highlights the Thousand Villages Demonstration, Ten Thousand Villages Rectification project. Spanning two decades, the project has selected villages as examples to showcase certain agricultural practices. Promoting the integration of primary, secondary, and tertiary industries in rural areas is seen as a way to revitalise the rural economy, create jobs, and improve rural incomes. Upgrading of agricultural product processing and high-quality rural logistics distribution is also recommended to support the rural digital economy.

Domestic price support policies and stockholding policies

In September 2023, the NDRC increased the 2024 minimum purchase price for wheat procurement from CNY 2 340 (USD 330) in 2023 to CNY 2 360 (USD 332) per tonne. However, the minimum purchase price was not triggered in 2023, as farmgate wheat prices remained above it. In February 2024, the NDRC increased the minimum purchase price for early indica rice from CNY 2 520 (USD 350) to CNY 2 450 (USD 353); the minimum purchase price for mid-to-late indica rice remains unchanged since 2022.

Auctions to feed mills from stocks of rice produced before 2017 resumed from early August to September 2023 after nearly a year of suspension. The nine rounds of auctions offered 2 million tonnes of rice per week with a floor price of CNY 1 700 (USD 239). Of the 16.5 million tonnes of old stock paddy rice offered in the auctions, 14.8 million tonnes were acquired.

Payments to producers

In April 2023, China published the Announcement No. 369 on Implementation Measures for Improving the Target Price Policy for Cotton. This maintains a target price for Xinjiang cotton at CNY 18 600 (USD 2 650) per tonne for the period 2023-25 and caps the volume of Xinjiang cotton entitled to the subsidy at 5.1 million tonnes annually, down from 5.4 million tonnes in previous years. The announcement also includes a provision allowing the State Council to make adjustments to the policy in the case of significant changes in the cotton market. Subsidy funds from the central government will continue to be distributed primarily based on production quantity with 5% based on quality and an additional nominal amount allocated for a pilot insurance fee. In turn, the announcement does not mention subsidies for other cotton-producing provinces. the announcement specifies that cotton produced on land not reviewed and certified for cotton planting is ineligible for cotton subsidies.8

In April 2023, MARA allocated CNY 10 billion (USD 14.5 billion) to grain farmers. The funds were in support of spring ploughing and production.

In June 2023, the Ministry of Finance (MOF) allocated CNY 200 million (USD 27.8 million) in disaster relief funds to facilitate mechanical harvesting and drying of wheat. This followed prolonged rain in Henan province, a major wheat producing region.

In August 2023, the MOF also allocated CNY 732 million (USD 102 million) in disaster relief funds to support the recovery of agricultural production in nine provinces, following crop damage and flooding caused by Typhoon Doksuri. The funds supported agricultural flood control and disaster relief efforts. They also supported post-disaster agricultural production, and subsidised the procurement of seeds, fertilisers, and pesticides, as well as provided operational services to help farmers resume agricultural activities and repair affected facilities.

In addition, in August 2023, the MOF approved a one-time grant fund of CNY 2.4 billion (USD 333 million) for the purchase of fertilisers and pesticides by maize and soybeans producers in the north of the country. This support followed heavy rains and flooding that affected these crops in 2023.

Developments in the regulatory framework

In April 2023, MARA issued a three-year action plan to reduce soymeal use in animal feed. This initiative aims to decrease dependence on soybean imports. The new strategy proposes reducing the percentage of soymeal in animal feed to below 13% by 2025.9

In December 2023, MARA approved 37 genetically engineered (GE) maize seed varieties and 14 GE soybean varieties for commercial production. MARA issued that same month 26 GE maize and soybean seed production and operation licenses beginning January 2024. In January 2023, MARA also approved the import and use of six new varieties of genetically modified maize and two of soybeans.

The National Health Commission (NHC) updated the Administrative Measures for the Management of Food Safety Standards, which entered into force in December 2023. The Measures provide an overview of procedures and principles for the planning, development, and revisions of the food safety standards in China. The revision aims to be consistent with current food safety principles that are science-based and focused on risk control, to prioritise human health and to encourage co-ordination of national and local authorities for standards development and management. Some important elements of the updated Measures are:

• Integrating the management of regulations of national and local food safety standards into the revised Measures

• Encouraging stakeholders to propose new national food safety standards

• Listing conditions when local food safety standards will not be filed with the NHC

• Setting out transition periods and requirements for the implementation of the new or revised standards

• Requiring temporary quantity restrictions or testing methods for imported foods that do not yet correspond to China’s national food safety standards.

Policies to facilitate climate change mitigation and adaptation in agriculture

In November 2023, China released the Methane Emissions Control Action Plan. The plan, jointly released by 11 agencies, provides “key tasks” for methane emissions control in eight sectors, including agriculture, through 2035.10 The plan focuses on livestock and manure management, enteric fermentation in livestock, and rice field management. However, many aspects of the plan mirror existing departmental plans such as MARA’s Implementation Plan for Carbon Reduction and Carbon Sequestration in Agriculture and Rural Areas and does not include specific targets for emissions reduction.

The February 2024 No. 1 Central Document includes a specific focus on “green agriculture” by promoting the integrated protection and restoration of rural ecosystems. The Document calls for:

• a reduction, complemented by efficiency improvements, in the use of chemical fertilisers and pesticides

• the promotion of circular farming models

• an analysis and remediation of heavy metal pollution sources in cultivated land

• a reduction of antibiotic use in animal husbandry and the prevention and control of major animal-borne diseases and key zoonotic diseases.

Trade policy developments in 2023-24

In October 2023, the Russian Federation (hereafter “Russia”) and China signed a 12-year grain supply contract. Russia is to supply China with 70 million tonnes of grains, vegetables, and oilseeds. In December 2023, China and Russia also amended the bilateral Protocol on Phytosanitary Requirements and lifted restrictions on Russian shipments of maize, rice, soybeans, and rapeseed to China.11

On 5 August 2023, China removed the anti-dumping duties and countervailing duties on imports of barley originating in Australia, which it had imposed mid-2020. Mid-December 2023, the General Administration of Customs of China (GACC) announced trade-related suspensions would be lifted for three of Australia's largest meat export establishments. The suspensions had been implemented in mid-2020 and early-2022. Products from the three establishments are now permitted to be exported to China, pending final administrative processes required by each side. Eight Australian meat export establishments remain suspended. Mid-April 2024, China also removed the anti-dumping and countervailing duties it had imposed in March 2021 on imports of Australian bottled wine (in containers of 2 litres or less).

In 2023 and early 2024, China announced that the ban on beef imports originating in several EU countries has been partially lifted (beef and beef products must be derived from cattle less than 30 months of age) so that steps can be taken to reopen the market. This includes Poland and Belgium in 2023 and Ireland, Spain and (partly) Germany in 2024. China has imposed a ban since 2000 on imports of EU beef products due to the emergence of several cases of Bovine Spongiform Encephalopathy in several EU countries that year.

In 2023, China signed several Free Trade Agreements (FTAs) with Ecuador (May 2023), Nicaragua (August 2023), and Serbia (October 2023). Under the FTA with Ecuador, China will provide market access for agricultural and fisheries products such as bananas, cut flowers, cocoa, coffee, and shrimp. Under the FTA with Nicaragua, China will provide market access for various agri-food and seafood products such as meat, seafood, sugar, peanuts, and rum. Under the China–Serbia FTA, more than 10 000 Serbian products will benefit from duty-free access, including a wide range of agricultural goods.

In January 2024, China implemented a new tariff adjustment plan for 2024, which eliminated applied tariffs on imports of sweetcorn seeds. This reduced the duty charged on imports from the 13% Most Favoured Nation rate.

Several trade restrictive measures were also implemented in 2023. On 24 August 2023, GACC issued Announcement No. 103 of 2023 (Announcement on Suspension of Import of Japanese Aquatic Products), suspending all imports of aquatic products (including edible aquatic animals) from Japan. GACC introduced the measures following Japan’s announced plans to begin releasing more than 1 million tonnes of treated radioactive water from the Fukushima power plant into the Pacific Ocean.

In November 2023, the Ministry of Commerce (MOFCOM) announced that its overall fertiliser export quota for 2024 would remain unchanged, at 13.65 million tonnes. The quota includes 3.3 million tonnes for urea, 6.9 million tonnes for diammonium hydrogen phosphate, and 3.45 million tonnes for compound fertiliser.12

Policy context

Key economic and agricultural statistics

China has the world’s second largest population and the second largest land area. It is an upper-middle income economy, with a GDP per capita – adjusted by PPP – close to 83% of the average of countries covered by this report (Table 8.2). However, while counting almost 18% of the world’s population, it has only 7% of the world’s potable water and 10% of the world’s agricultural land. China is thus a resource scarce country, which results in severe competition between agriculture and other users of land and water resources.

Agriculture remains an important part of China’s economy. It accounts for 22.6% of employment, but its 7.7% share of GDP indicates that labour productivity is significantly lower than in the rest of the economy. Even if rural incomes are growing at high rates, they remain at around one-third of those in urban areas.

Crop production represents 62% of total agricultural output and its composition has changed significantly over the last decades, driven by the shift towards higher value-added agricultural products such as fruit and vegetables. While the average farm size remains less than one-hectare, large-scale production has been developing rapidly, including among co-operative and corporate farms. North and northeast provinces have seen more rapid farm consolidation than other regions, as increased labour mobility and the transfer of land among farmers over the past three decades have led to adjustments in the farm structure. Livestock production originates mostly from larger-scale commercial units (OECD, 2018[6]).

Table 8.2. China: Contextual indicators

	China		International comparison
	2000*	2022*	2000*	2022*
Economic context			Share in total of all countries
GDP (billion USD in PPPs)	3 683	30 091	9.2%	22.0%
Population (million)	1 264	1 426	29.5%	27.1%
Land area (thousand km2)	9 425	9 425	11.5%	11.4%
Agricultural area (AA) (thousand ha)	523 731	521 486	17.5%	17.9%
			All countries1
Population density (inhabitants/km2)	132	149	52	64
GDP per capita (USD in PPPs)	2 917	21 476	9 363	25 965
Trade as % of GDP	19.3	17.2	12.3	16.6
Agriculture in the economy			All countries1
Agriculture in GDP (%)	14.9	7.7	2.9	3.8
Agriculture share in employment (%)	50.0	22.6	-	-
Agro-food exports (% of total exports)	4.8	1.9	6.4	8.0
Agro-food imports (% of total imports)	4.7	8.5	5.8	6.9
Characteristics of the agricultural sector			All countries1
Crop in total agricultural production (%)	65	62	-	-
Livestock in total agricultural production (%)	35	38	-	-
Share of arable land in AA (%)	23	21	32	34

Note: *or closest available year.

1. Average of all countries covered in this report.

Sources: OECD statistical databases; International Labour Organization (ILO); UN Comtrade; World Bank, WDI; FAO database and national data.

Real GDP growth averaged 5.5% in 2021-23 (Figure 8.4). Economic activity in China picked up in 2023, with a real GDP growth of 5.2%, driven by increased demand for services, resilient manufacturing investment, and public infrastructure stimulus. China continues to experience one of the strongest economic growth rates among G20 economies. Unemployment only slightly increased since 2020, as the economy was supported by the COVID-19 fiscal support policies. Following an inflation rate close to 2% in 2022 against a background of increasing international commodities prices and increasing input costs, inflation dropped to 0.23% in 2023 reflecting weakening domestic demand.

China has consistently and increasingly been a net agro-food importer since 2003, but agro-food exports have been growing over the last two decades. While agro-food exports stabilised since 2018, agro-food imports have been increasing at a higher rate during this period. The significant increase in agro-food imports since 2020 has been driven by higher imports of grains and oilseeds, particularly maize and soybeans, as well as higher pig meat imports. However, imports grew at a slower pace in 2022 amid slowing consumption and increasing domestic supplies of grains and livestock products. Primary products used as inputs in the domestic food industry dominate China’s agro-food imports, representing 46% of the total in 2022. In turn, primary and processed products for final consumption are key export categories, accounting for 67% of total agro-food exports (Figure 8.5). Over the last two decades, China has developed into the largest importer of agricultural products in the world. With rising consumption and limited capacity to increase its domestic production due to arable land and water scarcity, China increasingly meets its demand through imports. In this context, its agricultural policy setting – including price and storage measures for some commodities – can have important impacts on world prices.

Agricultural output growth in China averaged 1.7% in 2012-21, on par with the world average (Figure 8.6). This has been driven by growth in total factor productivity (TFP) of 1.9% per year, higher than the global average and largely attributed to farm consolidation and increased mechanisation of production. The contribution of primary factor growth to agricultural output growth (0.1%) is lower than the world average (0.4%).

The sustained growth in agricultural output is exerting pressures on natural resources such as land and water. While nutrient surplus intensities for nitrogen and phosphorus have been declining over the past two decades, these remain at high levels, particularly for phosphorus relative to the OECD average (Table 8.3). Agriculture remains the main user of water, accounting for 63% of total water abstraction, well above the OECD average.

Table 8.3. China: Productivity and environmental indicators

	China		International comparison
	1991-2000	2012-2021	1991-2000	2012-2021
			World
TFP annual growth rate (%)	4.4%	1.9%	1.7%	1.1%
			OECD average
Environmental indicators	2000*	2022*	2000*	2022*
Nitrogen balance, kg/ha	41.1	26.6	32.1	28.2
Phosphorus balance, kg/ha	9.8	9.8	3.3	2.3
Agriculture share of total energy use (%)	2.4	1.9	1.7	2.0
Agriculture share of GHG emissions (%)	9.8	6.7	8.7	10.1
Share of irrigated land in AA (%)	10.3	13.3	-	-
Share of agriculture in water abstractions (%)	68.8	63.0	47.0	49.5
Water stress indicator	19.3	19.9	8.7	..

Note: * or closest available year.

Sources: USDA Economic Research Service, Agricultural Productivity database; OECD statistical databases; FAO database and national data.

Historical trends in agricultural policies

The evolution of China’s agricultural policy objectives reflects the changing role of agriculture at different stages of economic development. In the 1950s and 1960s, the agricultural sector was taxed to support the industrial sector’s development. In the late 1970s, China initiated an important economic transformation process, implementing reforms towards a market-oriented economy including for the agricultural sector (OECD, 2005[7]; OECD, 2018[6]). More specifically, China implemented its first rural reform, the household responsibility system (HRS), during 1978-84. This dismantled the people’s communes and contracted cultivated land to individual households, mostly based on the number of people or labourers in the household.13

Until the late 1990s, agricultural policies focused on increasing food production, particularly grains, through the provision of fertiliser and other input subsidies to farmers. At the same time, policy actions targeted deregulation and diversification of marketing channels. Central and local governments increased support for irrigation.

Liberalisation of international trade started in the early 1990s with the relaxation of trade restrictions, allowing private traders to play a role in agricultural commodity markets. In the context of China’s WTO accession in 2001, the average import tariff for agricultural products fell from 42% in the early 1990s to 12% in the early 2000s.

In the 2000s, the growing income gap between urban and rural populations, and between developed and underdeveloped rural areas became an important policy issue. Increasing farmers’ income was made a key policy objective together with food self-sufficiency in several of the No. 1 Central Documents during the 2000s.14 Several new policies were introduced in this period to meet these objectives. These included minimum purchase prices for grains, and a system for temporary purchase and storage of production, as well as subsidies for agricultural materials, superior crop varieties, and agricultural insurance premiums.

Many of the No. 1 Central Documents also emphasised other policy goals, such as ensuring the quality of agricultural products and food safety, enhancing agricultural competitiveness, and protecting agricultural ecosystems. In the early 2000s, China introduced agri-environmental payments under programmes such as “Grain for Green” (officially called the Returning Farmland to Forests Programme), Grassland Ecological Protection, and other programmes helping to convert grazing land to grassland.

In 2014, land reforms clarified village collective landowner rights, individual household land contract rights, and land operation rights through the “three rights separation system”. These reforms consolidated farm operations and spurred productivity growth. To control the conversion of farmland for non-agricultural use, a “red line” on arable land was set at no less than 124.3 million ha in the 2016 Adjusted Scenario of the Outline of the National Overall Planning on Land Use.

The government-led Temporary Purchase and Storage Policy for Cotton, Soybeans and Rapeseed at Pre-determined Prices was reformed in 2014-15, and in 2016 for maize. For cotton, this was replaced by deficiency payments covering the difference between pre-determined target prices and actual market prices. For soybeans and maize, it was replaced by direct payments based on area planted. In 2016 all subsidies on grain, seed and aggregate inputs were merged into a single general income support payment. While wheat and rice remained subject to the minimum price procurement programme, support prices were gradually reduced between 2015 and 2019. Since the COVID-19 pandemic, the minimum support price was increased again for indica rice and wheat.

A rural revitalisation strategy was introduced in 2017 to close the urban-rural development gap. This strategy relies on support to general services as a means to develop agri-food supply chains.

In March 2021, the Central Committee of the Communist Party of China (CCCPC) released the fourteenth Five-Year Plan 2021-25 for National Economic and Social Development. The plan outlines specific key priorities for agriculture modernisation:

• Enhancing food security, including by safeguarding a minimum arable land area of 120 million ha.

• Maintaining subsidies for grain producers and increasing minimum purchase prices for wheat and rice as appropriate.

• Implementing high-standard infrastructure and conservation projects, which could also advance the development of green agriculture.

• Investing in innovative farm technologies and smart agriculture systems, including with respect to seeds and animal breeding.

• Improving pest and disease control systems.

In November 2021, the State Council issued the fourteenth Five-Year Plan for Promoting Agricultural and Rural Modernization 2021-25 setting the mid-term food security objective of maintaining annual production of grains at a minimum of 650 million tonnes and of meat at 89 million tonnes. The plan also emphasises consolidating the achievements of poverty reduction in rural areas, supporting agricultural innovation and seed development, and conducting new surveys on agricultural production costs to adjust agricultural insurance programmes and subsidies.

Table 8.4. China: Agricultural policy trends

Period	Broader framework	Changes in agricultural policies
Prior to 1978	Centrally planned economy	Centralised control of agricultural activities Collective and commune-farmer land systems Production, marketing and price controls, implicitly taxing agriculture Investments in irrigation systems and extension services State agricultural trading firms and high tariffs
1978-1999	Initial reforms to the centrally planned economy	Collective and commune land system dismantled, household responsibility system set up for land use Some regulatory reforms in agricultural marketing State Grain Authority ensuring food availability and affordability to the population Public stockholding, food price subsidies to urban consumers Fertiliser and input subsidies
2000-2009	Improving farmers’ incomes and food self-sufficiency key policy objectives Further trade liberalisation	Increase in spending on agricultural research and development Technical assistance services Input subsidies, implicit credit subsidies Increasing allocations to the “Grain for Green” conservation programme Input and output markets increasingly allowing participation of private traders WTO accession in 2001, free trade agreements signed, reduction of tariffs Minimum purchase price system for grains Temporary purchase and storage policy established for selected commodities
2010-2014	Increasing support to agriculture	Increasing minimum purchase prices, and larger set of commodities covered by the temporary purchase and storage system Agricultural insurance premium subsidies
Since 2014	Policy efforts to adjust the price support system and respond to agricultural productivity and sustainability challenges	Continued reforms in land transfer rules National Agricultural Sustainable Development Plan 2015-2030 Agricultural support and protection subsidy payments per area since 2015 (currently “Agricultural Production Development” programme) 2017 National strategy on “rural revitalisation” Dismantling of price support systems for cotton, soybeans, rapeseed, maize; introduction of direct payments based on area Gradual decrease in support prices for wheat and rice during 2015-19; increases since the COVID-19 pandemic in support prices for indica rice and wheat Enhanced focus on food security through the No. 1 Central Document since 2022 Food Security Law entered into force in 2024

At the end of the 1990s, China’s support to the agricultural sector mostly comprised of budgetary allocations, while market price support (MPS) was negative. Budgetary allocations went to input subsidies and general services to the sector. However, since 2002, MPS increased and became the main instrument to support agricultural producers. After 2009, China continued to increase its minimum support prices, leading to significant price gaps between domestic and international markets. Support to farmers increased until 2015, when policy reforms for commodities such as rapeseed, soybeans, cotton and maize contributed to lowering MPS. Fluctuations in producer support levels since 2019, particularly market price support (MPS), are linked to the evolution of international versus domestic prices. The increase in producer support from 2018 to 2021 was largely driven by a significant increase in MPS for grains and oilseeds against a backdrop of domestic prices rising faster than border prices. Minimum purchase prices for wheat and rice have gradually increased since the COVID-19 pandemic. Constraints in the supply of groundnuts as well as maize and soybeans for animal feed led to large increases in domestic prices and imports for these commodities in 2020 and 2021. In addition, domestic prices for livestock commodities such as beef or poultry meat have been increasing due to more demand for these products in response to tighter supplies of pig meat in these years. As reference prices increased faster than domestic prices in 2021-22, particularly for wheat, maize, milk, pig meat and other meat products, producer support decreased once again. Between 2022 and 2023, China improved its production capacity for livestock products, particularly pig meat and dairy products, while grains output also continued to increase. These trends in production, combined with an overall weakening domestic demand, have been exerting downward pressure on domestic prices and driving a slowdown in imports for many commodities. Against this backdrop, producer support remained stable at 13.2% in 2023. MPS accounts for more than two-thirds of PSE, followed by budgetary support for payments based on current area and input subsidies (Figure 8.7).

References

[4] Climate Action Tracker (2021), “Countries: China”, http://climateactiontracker.org/countries/china.html (accessed on  15 January 2019).

[6] OECD (2018), Innovation, Agricultural Productivity and Sustainability in China, OECD Food and Agricultural Reviews, OECD Publishing, Paris, https://doi.org/10.1787/9789264085299-en.

[7] OECD (2005), OECD Review of Agricultural Policies: China 2005, OECD Review of Agricultural Policies, OECD Publishing, Paris, https://doi.org/10.1787/9789264012615-en.

[5] State Council (2022), National Climate Change Adaptation Strategy 2035.

[1] State Council (2021), Fourteenth Five-Year Plan for National Agricultural Green Development, http://www.gov.cn/zhengce/zhengceku/2021-09/07/content_5635867.htm (accessed on 15 December 2021).

[2] State Council (2021), Responding to Climate Change: China’s Policies and Actions, http://www.scio.gov.cn/zfbps/32832/Document/1715506/1715506.htm.

[3] UNFCC (2021), China First NDC - Updated October 2021, http://www4.unfccc.int/submissions/indc/Submission%20Pages/submissions.aspx.

Notes

← 1.  This adjustment to the price floor guarantee was introduced in 2018. The quality grade standard is divided into five grades plus a “sub-standard” category.

← 2.  This programme was previously called the “agricultural support and protection subsidy”.

← 3.  This is issued jointly by MARA, the NDRC, the Ministry of Science and Technology (MOST), MONR, MEE, and the State Forestry and Grassland Administration.

← 4.  Conservation agriculture is a cropping system that can help prevent soil degradation while regenerating degraded lands.

← 5.  Fertigation technology suggests sprinkling fertilisers into the precision irrigation system from reservoirs with water-soluble fertilisers. This is typically done with injectors and a pressure-controlled valve. Most fertigation systems are equipped with sensors to measure pH levels and electric conductivity.

← 6.  The National Bureau of Statistics data indicates that China’s grain production has been above 650 million tonnes per year for the last nine years.

← 7.  High-standard farmland refers to a set of measures from land consolidation to irrigation infrastructure to improve farmland yields and lay the foundation for mechanised agriculture. China estimates 66.7 million ha are of high-standard and aims to turn all agricultural area into high-standard.

← 8.  In late June 2023, the Xinjiang Production and Construction Corps (XPCC) issued its own policy to phase out cotton farming on some lands in 2024 (the notice on the issuance of the “Xinjiang Production and Construction Corps Cotton Target Price Policy Implementation Plan for 2023-25” is available at: http://www.xjbt.gov.cn/c/2023-07-04/8288039.shtml).

← 9.  This would be 1.5 percentage points below the 2022 level.

← 10.  Including the Ministry of Ecology and Environment of China (MEE), the Ministry of Foreign Affairs (MOFA), the National Development and Reform Commission (NDRC), the Ministry of Science and Technology (MOST), the Ministry of Industry and Information Technology (MIIT), the Ministry of Finance (MOF), the Ministry of Natural Resources (MNR), the Ministry of Housing and Urban-Rural Development (MHURD), the Ministry of Agriculture and Rural Affairs (MARA), the Ministry of Emergency Management (MEM), and the National Energy Administration (NEA).

← 11.  Previously, exports were allowed only from the Primorsk, Transbaikal, and Khabarovsk territories, the Amur Region, and the Jewish Autonomous Region in Russia. In mid-December 2023, Russia started sending containers of soybeans and barley to China via the New Land Grain Corridor.

← 12.  In addition, in November 2023, the China Nitrogen Fertilizer Industry Association issued a statement urging its members to prioritise supplying domestic markets, including by withdrawing export applications and goods that have been shipped or collected at ports.

← 13.  Although ownership of land remained collective, control and income rights belonged to individuals under the HRS, with a land contract term of 15 years. When this ended in the late 1990s, the second term was extended to 30 years.

← 14.  Self-sufficiency was interpreted to mean that China should produce 95% of its own grain requirements. The Chinese self-sufficiency rate for grains is defined as the total production of wheat, coarse grains and rice divided by total domestic consumption of these crops (OECD, 2005[7]).