ECONOMIC DEVELOPMENT AND TRADITIONAL FARMLAND IN CHINA ISSUES AND CHALLENGES

Abstract

China has been one of the fastest growing economies of the world since 1978 and the annual rate of economic growth has exceeded 8 percent in terms of the real Gross Domestic Product (GDP). However, it is noticed that more than 5.8 percent of farmland is lost during the last eight years and the farmland resource is not used in a sustainable way. Farmland is the only reliable income source for about 800 million rural residents. The Farmland policies in China are designed to be beneficial to the economic development. During the fast economic development, farmland is easily taken away from farmers with a low compensation which make the farmers' interests infringed. At present, the problem of how to protect farmers' interests and how to improve the living conditions in rural areas has been one of the most concerned rural issues. The low price of farmland and excessive economic activities, have led to enormous farmland encroachment, degradation and pollution. It is found that well designed farmland conservation is connected with the protection of farmer's interests. This thesis analyzes the problems associated with the farmland reduction, and the factors influencing farmland reduction, which has both direct as well as indirect effect on the rural people. It is learnt that rapid economic development, both the economic development zones and township enterprises have encroached substantial farmland, and have not been able to fully use the farmland to its potential. The thesis incorporates an environmental valuation technique - cost-benefit analysis - to demonstrate the importance of the farmlands. The cost-benefit analysis illustrates the true economic value of the farmland, and shows the importance of environmental and social cost in financial cost-benefit analysis, both for a country as well as for a company. Possible approaches for designing farmland policies which incorporates the best interests of the rural residents, and makes use of the full potential of the farmland without causing environmental degradation have been suggested. This would, in the long run, prove beneficial to China, both in sustaining the grain security for her growing population as well as in providing social security for her rural residents without causing environmental degradation.