Structural Transformation And Agricultural Development

This paper studies general theories of relationship between structural transformation and agricultural development, conducts pragmatic observations on structural transformations in china's economy and the process and reality of agriculture development, and proposes some strategic suggestions on Chinese agricultural development policies as well as structural transformations.The first effort of the paper is to build an integrated framework for analysis by comprehensive study general theories concerning relationship between structural transformation and agricultural development based on Development Economics, New Institutional Economics and Industrial Economics. The most distinctive points the paper shows is that economic structure is a combination of structures of resource allocation, industrial output, product demand and institutional structure, and it comprises the percentage of social, economic and natural resources and outputs in different industrial divisions, different regions and different enterprises in line with institutional rules. Economic structure seems to be both static and dynamic by nature. Structural transformation plays an important role in economic growth, because successful structural transformation accelerates economic developments in a country or an area. Agricultural development works as an important component and the essential driving force in structural transformations. Agriculture is especially beneficial to ecological environment in addition to its basic four distributions to society. The position of agriculture to structural transformation changes significantly as economic development upgrades. Agriculture propels economic structural transformation; and meanwhile, structural transformation promotes agricultural developments. The expansion of industrial and non-agricultural sectors not only increases demands of surplus rural labors and agricultural products, but also puts sufficient modern capital and technological elements into agriculture, which makes a distribution to traditional agriculture transformation and development.Institutional arrangements influence the forming and transforming of economic structures, and inward and outward flowing of resource elements through the bounds of agricultural sector. Different choices of institutional system result in different resource allocation models. Planning economy institutions use administrative power to allocate resources and products betweenagriculture and non-agriculture sectors, while market economy institutions use market rules to complete allocation of resources. It is the two different systems and resource allocation models that cause totally different industrial structures and agricultural development stages.Secondly, in a certain period in the past, a special strategy for economic development prevailed in China, that gave high priorities to industries, especially heavy industries, and built a planning institution relatively. By this strategy and institutional arrangements, the governments used its executive authorities setting up a kind of dual-structural transforming model in economy, by which agriculture was kept exclusively in rural areas while industries were categorically limited in urban areas.In order to secure provisions of food, materials and original capitals for industrial development, and to keep sizable populations survived in rural areas, the government carried out a series of policies such as centralized purchasing and selling of essential agricultural products, monopolizing productive elements, transforming rural individual economy of small-scale farming into socialist collective economy, and implementing a dual-household residential system separating rural and urban populations thoroughly. Although these arrangements stimulated a high growth of industry, it caused huge disagreements between supply and demand of agricultural products. The government had to implement an assortment of policies or institutions to keep the balance between supply and demand. Some identical policies in supply aspect, suc...