China Agricultural Innovation System: Issues and Reform

Transcription

1 China Agricultural Innovation System: Issues and Reform Ruifa Hu 1,2, Jikun Huang 2 1. School of Mangment and Economics, Beijing Institute of Technology 2. Center for Chinese Agricultural Policy, Chinese Academy of Sciences

2 Average annual growth rate in agricultural GDP was about 4 times of population growth rates Annual growth rate (%) of population in Average annual growth rate (%) of agricultural GDP

3 Rural poverty incidence in China, (Percent of Population) 35 Under official poverty line Under $1/day in PPP The fall in the poverty rates in China account for MOST of the entire world s fall in poverty between 1985 and 2005

4 Total Factor Productivity for rice, wheat and maize in China, Wheat Maize 150 Rice 100 After middle 1980s, technology has been major factor affecting productivity growth

5 Output, Input, and TFP annual growth rate and Decomposition of TFP Main Grain Commodities and Cotton ( ) 3 Output rises 2 1 Input reductions 0-1 Early Indica Late Indica Japonica Wheat Maize Soybean Cotton Output Input Total Factor Productivity Rises TFP 0 Early Indica Late Indica Japonica Wheat Maize Soybean Cotton Mostly Technical Change (rising of 6 production frontier) China is 4 already operating efficiently (at 2 frontier) 8 0 Early Indica Late Indica Japonica Wheat Maize Soybean Cotton -2 TE TC -4 Source: Jin, Huang and Rozelle.

6 Technology has been a major engine of food and agricultural growth in China Roles of agricultural research: engine of growth food security and poverty reduction competitiveness and farmer income environment preservation Changing agriculture requires changing technology new modern technologies (e.g., biotech) knowledge-intensive NRM conservation product quality high value products

7 Questions and policy issues What is the main reason that the R&D has contributed significantly to China s agricultural growth? What we can learn from China s experiences / lessons? What are the challenges which China should consider in its current agricultural R&D reform?..

8 Rest of presentation China s R&D system Challenges and reforms Concluding remarks

9 China s agricultural R&D system: Organization Chart for Agricultural Research (National level) National Level National Government State Council State Development Planning Commission Chinese Academy of Science Ministry of Finance Ministry of Science and Technology State Forestry Bureau State Bureau of Machine Building Ministry of Agriculture Ministry of Education Chinese Academy of Forestry Chinese Academy of Agri. Mechanization Chinese Academy of Agri. Sciences Chinese Academy of Tropical Agri. Chinese Academy of Fishery 6 Agricultural Universities 13 Forestry Res. Institutes Mechanization Institutes 40 Research Institutes/Centers 9 Research Institutes 8 Research Institutes Agricultural Res. Institutes National level research centers account for: 10% of total research staff 15% of total budget

10 China s agricultural R&D system: Organization Chart for Agricultural Research (Provincial and Prefecture level) Provincial Level Department of Education Provincial Academy of Science Department of Agriculture Provincial Governments Provincial Bureau of Finance Science & Tech. Commission Department of Forestry Other Departments Prefecture Level Prefecture Academy of Science Prefecture Government Bureau of Finance Science & Tech. Commission Provincial Agricultural Colleges & Universities Provincial Academy of Ag. Sc., Fishery, etc Research Institutes Provincial Institutes of Forestry Other Provincial Institutes Bureau of Education Bureau of Agriculture Prefecture Academy of Agricultural Sciences Bureau of Forestry Prefecture Institues of Forestry Other Bureaus Provincial research centers account for: 41% of total research staff 51% of total budget Prefecture research centers account for: 32% of research staff 34% of total budget

11 China s public agricultural R&D System: not only on basic research, but even more on the development research Research system: Central government established agricultural research institutes that covered most of agricultural products in the national wide Local government established agricultural research institutes that covered nearly all agricultural products in the region There are 1237 agricultural research institutes and 88 agricultural universities or technological academies that located in every province or prefecture The research fields covered nearly all agricultural products (Nominal are 109 products) in China 50 innovation product industries have been specially invested by MOA since 2008

12 China has the largest public agricultural R&D System in the world Number of agricultural R&D staff in Total staff Active researchers China-1 China-2 USA Japan USSR India W.Germany Brazil Mexico

13 Number of Researchers / 1 million US$ of Agri GDP in China-1 China-2 USSR India W.Germany USA Mexico Japan Brazil China s research system: overstaffed

14 China s agricultural R&D System: public dominated, but changes fast Private sector s share of agricultural research staff in early 1990s (%) Source: Alston and Pardey (1995); Huang et al., 2003; Hu et al., 2008

15 Government fiscal investment in agricultural research (billion yuan in 2005 price) Agricultural research investment intensity (%) in China Annually growth15.9% Since 2000, the rise in research investment has been higher in China than any other country in the world

16 Investment in agri biotech research had been doubled in every 4 years before mid-2000s (million yuan in 2003 price) : 1.65 billion yuan = US$ 200 million or US$ 950 million in PPP Plant Agriculture Huang et al., Science, 29 April 2005: National Transgenic New Variety Development Program: 26 bil. yuan (US$ 3.8 bil.) in

17 China also has the largest public agricultural extension system in the world Staff under government agricultural extension system in China (100,000 persons) Agricultural administrative villages (100,000) The government agricultural extension stations located in each township, even in the most remote township in China. The system make sure the new innovation can be adopted in time.

18 Summary China s agricultural R&D system is: the largest R&D system in the world top-down government research system more development research than basic research public sector dominated Largest agricultural extension system to make sure the agricultural innovation be adopted in time

19 Challenges by late 1990s Public dominated, private sector is lacking: Research program may not capture the most relevant and immediate problems faced by farmers Weak links between generation and dissemination of technologies, between technologies available and farmers real demand for useful technologies Decentralization: decentralized with weak coordination among institutions (central vs local; local vs local ) Duplication: duplication of research efforts contributes to wastage of scarce research resources Overstaff: low salary, lack of incentive, loss of quality scientists Low human capacity

20 Agricultural research reform in China Stage I: Initial reform period ( ) methods: -- gradually commercializing research Research grant: -- gradually moving from formula based allocation toward competitive grants

21 Changing sources of agricultural research investment (million yuan in 1998 price), Total income Government investment Commercial and Others

22 Agricultural research reform Stage II: A new push for radical reform Goals: to have a market-oriented, effective, creative, and modernized agricultural research system Strategies: Researchers: Better scientists (keep 1/3) Radical commercialization (2/3) Investment: More investment Improve efficiency (competitive grant) Management: Incentive system reform More market-oriented reform

23 The government R&D investment increased at 15% annually during Agricultural Research Expenditure (million yuan in 2009 price), Annually growth13.1% Total income Annually growth 15.9% 0 Public investment Rising R&D expenditure, but most are competitive grants: this is a new challenge. Source: Hu et al., 2007

24 Private agricultural R&D investment in China (Billion RMB yuan, 2006 price) Contracted out In own firm Does the government investment remarkably contribute to the rise of private sector s R&D investment? Source: Hu et al., 2008

25 Investment in Agricultural R&D by Private Sector Privatization: No. of private agricultural firm *** (0.279) Model 1 Model 2 Model 3 Model 4 Ln (Private *** (0.279) R&D) *** (0.278) Firm age *** *** *** *** 政府 R&D 投资 Public R&D Exp *** (29.39) (29.42) (29.05) (29.06) Firm s sale revenues *** *** *** *** -- 基础与应用 Foundation+Application (0.000) (0.000) (0.000) 0.017*** (0.000) Private share (compared w/ State) (3.22) (3.22) (3.18) (3.18) -- 开发投资 Development *** Foreign share (compared w/ State) (7.75) (7.76) (7.66) (7.66) 公司年龄 Years started company 165.5*** 168.2*** Publically traded company 7446 *** 7443 *** 7336 *** 7330 *** 公司年销售额 Company s annual Public R&D investment lagged 3 years: revenue 私人公司个数 Number of private companies (856.7) (857.1) (847.0) (847.2) of the total R&D *** *** (0.000) (0.000) Ln (Private *** (0.277) R&D) 0.003*** 0.003*** 1.842*** 1.799*** of public-r *** *** (0.005) (0.005) of public-d *** *** Public-dominated R&D investment restrict the private investment (0.001) (0.001) Government funding for private R&D *** ***

26 Concluding remarks Agricultural research has been an engine of agricultural growth in China in the past. With rising food demand in China, China s leaders believe agricultural technology is major solution to improve the nation s food security and have developed a national agricultural R&D system and also have tried to reform this system so that the technologies generated can be more response to farmers demand.

27 Concluding remarks China has also invested significantly in R&D in the past, particular in recent years. However, China s agricultural research and extension are also facing great challenges, a public dominated system has its pros and cons. The leaders are well aware of its cons and recently have tried to encourage private sector to join public sector in agricultural R&D system ---- if this is going to happen, it is expected a new era of China s agricultural R&D will come

28 Thanks