China should grow more vegetables

OECD Observer

China should grow less cereals and oilseeds and more vegetables as part of agricultural reform in the transition to a fully-fledged member of the global economy following its accession to the World Trade Organisation, a new OECD study suggests.

Labour-intensive vegetable production would be more competitive than cereal and oilseed growing given China’s large labour force and lack of agricultural land and water, Agricultural Policies in emerging and Transition Economies 2000 found. Grain production is already declining, and the trend is expected to continue as cuts in guaranteed prices and stocks begin to bite.

Completely free trade would boost grain imports by some 26 million tonnes by 2005 to total some 40 million tonnes. But China would have trouble handling such an import level with its current port, road and distribution network. Even without full free trade, lower tariffs and larger import quotas are expected to increase access to foreign food supplies at lower prices, with a knock-on effect on domestic prices. The reduction in tariffs envisaged in the WTO accession negotiations, for example, would push domestic wheat prices down 8% compared with prices without any trade liberalisation. 

* Aricultural Policies in Emerging and Transition Economies 2000 also covers prospects for other emerging countries such as India and Brazil.

©OECD Observer No 223, October 2000

Economic data


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