| Mainly applying the theories and methods of new institutional economics, this paper analyzes and studies the transformation of agriculture and countryside in southern Jiangsu since liberation, explores modes for objectives, dynamics, approaches and transformation during economic transition from traditional agriculture to modern one and hence offers historical reference to the modernization of Chinese agriculture. To study agriculture alone is not enough to understand clearly the internal mechanism for modernization of traditional agriculture. We should also take into consideration resources, technology, culture and institutions and so on as well as relationship among them. In this regard, Yujiro Hayami-Vernon W.Ruttan induced transformation mode is an ideal framework for analyzing for this paper.With most of the features of modern Chinese agriculture, traditional agriculture in southern Jiangsu is typical. Therefore, this paper is of academic, practical and common significance. In the 20th century, especially after liberation, the southern Jiangsu underwent the whole process of transition from traditional agricultural society to modern industrial society, which set an example for institutional innovation of development in agriculture and countryside in other parts of China.It is necessary to ascertain the characteristics of traditional agriculture in southern Jiangsu before analyzing its system innovation. To Jiangnan region, in its isolated or semi-isolated economy, institutional constrains and the rigidity of technology led to downward trend in resources increase. To meet the demand of population growth, agriculture had to remain the same development level. Traditional family economy could be seen throughout Jiangnan region even after liberation. Although industry and commerce developed, traditional agriculture remained unchanged. Instead, it involved into over intensivism because of overpopulation and technology stagnancy.Land reform, agriculture cooperation and people's commune movement are the main contents of system innovation in traditional agriculture in the early days of the PRC, which directly led to the abolishment of private ownership of land and the formation of state-dominated collective property rights. Collective farming system is of positive historical significance. However, due to its deformity in property rights, it restricted the enthusiasm of production in farmers and collectivity as well. As a result, expected net profits of the supplier of institution, namely the government, fell dramatically and eventually system innovation is unavoidable. In the late 1970s, the newly established contracted responsibility system based on the household replaced collective farming system and accelerated the development of agriculture because of its advantage in terms of property rights.However, analysis of the framework of property rights alone is not enough and it is technological advancement that constituted the endogenous dynamics for transformation of traditional agriculture. Unfortunately, in modern China, agricultural research and education was backward and China was not capable of developing, producing and applying modern technological elements. After liberation, especially after the implementation of the reform policy, the development of agricultural research and education injected unprecedented dynamics into agricultural development. In fact, the development of modern agriculture overlapped the development of modern productive elements, which included fertilizer, pesticide, fine breed, agricultural machinery, financial aid, technology, information and human resources.Roads and features mentioned above are not exclusively for southern Jiangsu, but can be found across China. Although there was some development in rural industry during the people's commune movement in southern Jiangsu, there was no breakthrough in institutional innovation. Breathtaking institutional innovation was introduced only after the implementation of the reform and opening up policy, which included: (1) to achieve agricultural growth through specialization and commercialization. Diversification included specialized production at farm level and producing and processing at regional level. Commercialization led to diversification at national level and strengthened the division of labor among different regions and specialization at farm level. Farmers benefited from more jobs and enhanced productivity; (2)To push forward economic structure reform, to promote rural industry so as to create more jobs and to reduce the proportion of agriculture in national economy and to increase the proportion of non-agricultural industry. That is to introduce the so-called southern Jiangsu mode. (3) to build more towns to employ more fanners; population is mainly made up of city dwellers; more booming cities will emerge.We conclude that the growth pattern of agriculture of China in the 1980s was monotonous. In spite of its high efficiency, the performance of agriculture was poor. Public goods were not sufficiently supplied; no breakthrough was seen in the democracy field in rural areas; literacy of fanners remained at a low level. As a result, farming-farmer-countryside problem became even worse in the 1990s. Southern Jiangsu, however, did a very good job in solving the problem of rural development. The relationship among farming, fanner and countryside were scientifically dealt with; institutions were perfected and rural education, medical care and public goods supply were improved; democracy and literacy of farmers were noticeably improved; farmer's burden was also eased. Demand for sustainable development of economy and society in rural areas were met largely.The realization of modern agriculture is the ultimate goal for transforming Southern Jiangsu traditional agriculture. Presently, the gross agricultural product account for less than 3% of the GDP of Southern Jiangsu, with other indexes all approaching the development level of medium-developed country countries. There is still a long way to go before the eventual realization of modern agriculture. There are four reasons for the institutional innovation in agriculture in Southern Jiangsu. (1) The innovation of theory of marketization and the intensified reform. It is the unification of different innovations that led to fundamental changes in traditional planned economy. (2) Property rights reform activities within the innovative interest group. It is unavoidable when individual farmer, rural community and practical group who support reform try to obtain benefits. It is also a choice of development road suitable to the real situation at that time. (3) Government plays an important role in pushing forward gradual reform and is also a potential force for other reforms. Compulsory transformation introduced by the government plays an increasingly important role in economic and social development in rural areas. (4) Last but not least, the culture tradition in Southern Jiangsu. In a market economy, the evolution of thinking pattern, cultural psychology and value activate courage and vitality of people in Southern Jiangsu.Transformation of agricultural institution in Southern Jiangsu is an induced one. In a relatively mature market economy, when dynamics for technological advancement are endogenous, agricultural technology becomes more compatible to local agricultural resources. Such system innovation was put forward by the government here in China. The goals of reform are to preserve governance and for maximum rent.Based on the study on Southern Jiangsu, this paper holds that the theory of transforming traditional agriculture should include the following aspects so as to adapt itself to China. The scarcity of agricultural resource should be fully understood, which determine the direction of choice and development of agricultural technology. Technology level suitable for specific region should be enhanced and more modern productive elements should be introduced. Market system should be perfected. Industrialization should be accelerated and redundant labor should be shifted to non-agricultural sectors. Urbanization should be accelerated and the gap between city and countryside should be bridged. More investment should be allocated to agriculture.In addition, this paper also sums up lessons from system innovation in agriculture since liberation. The implementation of collective farming system and the abolishment of family economy did no good to the development of agriculture and countryside. Instead, non-balanced developmental strategy delayed the process of modernization of countryside. Too much dependence on planned economy and ignorance of market economy led to low efficiency in resource utilization and unbalanced economic structure. Finally, detailed objectives, direction and principles for deepening institutional reform in agriculture are presented and suggestions for promoting the building of a new countryside are also put forward. |
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