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2013 CAER-IFPRI Annual International Conference
Article Type: Conference report From: China Agricultural Economic Review, Volume 6, Issue 4.
Institutional innovation and rural development: a summary of CAER-IFPRI 2013 Annual International Conference
Conference organisers: Chen Zhu, Pei Guo and Baozhong Su(College of Economics and Management, China Agricultural University, Beijing, China)
On October 17-18, 2013, the 2013 CAER-IFPRI Annual International Conference was held in Wuhan, Hubei Province of China. The conference was hosted by the Huazhong Agricultural University, and was co-organized by the China Agricultural Economic Review and the International Food Policy Research Institute. During the conference spanning two days, leading scholars and researchers addressed topics related to the rural development in China and around the world, as well as a wide range of topics in agricultural economics.
The annual conference had received 196 submissions and attracted more than 100 scholars and researchers from various institutions worldwide, including Beihang University, China Agricultural University, Chinese Academy of Sciences, Cornell University, Huazhong Agricultural University, International Food Policy Research Institute, James Cook University, Leibniz Institute of Agricultural Development in Central & Eastern Europe, Michigan State University, Nanjing Agricultural University, North Dakota State University, Northwest A&F University, Oklahoma State University, Peking University, Purdue University, Research Triangle Institute, Shanghai University of Finance and Economics, Tsinghua University, University of Bonn, University of Florida, University of International and Business Economics, Wageningen University and Research Centers, and Zhejiang University. In total, 51 papers were assigned to nine sessions exploring critical and timely issues in different fields of agricultural economics, such as agricultural market, trade and price, food nutrition and health, labor and land, agricultural growth, food consumption, food safety, climate change, China-Africa agricultural cooperation, resource and environment, income and demand, and rural development.
Professor Bingsheng Ke delivered the first keynote presentation entitled, "Food Security Issue in China: Old Theme and New Context," providing an overview of the current situation and key challenges in food security confronted by China. Professor Ke opened by discussing reasons that China needs more food, needs to produce more food, and how China can produce more food efficiently in the new era. He emphasized that the food consumption of migrant workers is an important factor to evaluate food balance in China, and showed major findings from a recent survey conducted by the China Agricultural University that migrant workers have a substantial higher food demand than rural or urban residents. As China has become a net agri-food importer since 2004, Professor Ke highlighted the main challenge that China needs to produce more, better, and safer food with less farmland, water, feed, and higher labor costs in the near future. Wrapping up his discussion with the long-term food security picture of China, Professor Ke also provided suggestions for policy makers to keep the agricultural policy in the right direction that can be further strengthened.
Dr Shenggen Fan's keynote presentation focussed on the agricultural and rural development between China and Africa. He opened by discussing the burden and emerging challenges threatening future agricultural and rural development in both China and Africa. Dr Fan pointed out the paradox of food that both malnutrition and obesity are pervasive in China and Africa, which is an indicator of global food inequality. Dr Fan then discussed the recent engagement and progress between China and Africa, and showed the rising trend of trade, aid, and investment from China to Africa, while the share of agriculture trade remained small. He listed challenges of China's engagement in Africa, including concerns about labor practices and safety, the lack of understanding of local culture, and the political and economic instability alongside corruption. At the end, Dr Fan provided directions to harvest China's potential and promote mutually beneficial trade with Africa.
In the following keynote presentation, Dr Jikun Huang presented a study of the effect of climate change on China's economy and agriculture, which is a joint project conducted by Dr Huang and his colleagues from the Center for Chinese Agricultural Policy, Chinese Academy of Sciences. He first explained the analytical framework for impact assessment, and how climate change can bring direct and indirect impacts on the economy and agriculture of China theoretically. Dr Huang then provided empirical findings from case studies in the agriculture and industry sections, by using data from ten provinces of China. Dr Huang showed that the minor increase of temperature would reduce the net revenue of all farms, especially for rained farms; while the minor increase of precipitation would increase the net revenue of all farms. Dr Huang also briefly discussed how farmers, communities, and government would respond to climate change, and the effectiveness of their adaptation behaviors. Dr Huang finished up his talk with a discussion of potential impacts of the carbon tariff on China's economic growth.
Professor Weiming Tian gave keynote speech entitled "Agricultural Trade and China's National Food Security," which discussed the recent development of agricultural production and trade, and underlying causes for the growing net imports of major commodities. Although China's agricultural production had kept growing steadily after the WTO accession in 2001, the intensive and increasing net imports of major cereals raised food security concerns in China. What are underlying causes of such development? Professor Tian stated that conventional explanations based on the supply-demand framework are not fully supported by available evidence, and other non-conventional factors might explain the trend better. For example, current domestic support policies of agriculture were designed for coping with the rising world food prices, which was unsuitable to handle the situation of declining food prices and could lead to market distortions. At the end, Professor Tian emphasized that non-conventional factors were affecting both agricultural trade and national food security increasingly; traditional approaches for food security were wrongly targeted and might have significant side-effects; and researchers or policy makers should broaden their views in order to solve the problem effectively.
Professor Calum Turvey provided an empirical study of the effectiveness of China's most recent reforms in banking and San-Nong policies on the rural financial reform in his keynote presentation, a joint work with his colleagues from the Huazhong Agricultural University. The effectiveness was measured by the Index of Rural Financial Inclusion (IRFI), an indicator capturing the banking penetration, the availability of banking system, the usage of the financial system, and the loan to deposit ratio in rural China. To analyze influential factors, Professor Calum and his colleagues adopted a three-stage least squares (3SLS) panel model to accommodate endogenous repressors, followed by a comparative analysis between financial inclusion at the national level as well as the provincial level. Their results showed that China's IRFI is still relatively low and differs considerably among provinces/regions, suggesting that effective institutions designed to expand services and serve the poor was still a challenge to China's rural financial reform.
Professor Funing Zhong delivered his keynote presentation on "Demographic Changes in Rural China: Implication for Future Innovation." Professor Zhong opened by discussing the declining share of rural labor force during the past three decades and future challenges brought by demographic changes in rural China. He showed that although there were significant declines in shares of rural population and labor force, the absolute number of rural labor force did not reduce markedly. Since the major demographic change in rural China was due to migrant workers and the aging of rural labors, Professor Zhong highlighted the key consequence that the labor cost would raise rapidly. Professor Zhong listed possible farmers' adaptations supported by empirical evidences, such as substitution of machinery for labor, shift of production, and seasonal labor demand/supply. Professor Zhong wrapped up his talk by briefly discussing future trends, and strategies and technology innovation needed to cope with the demographic change as well as international competition.
Trade, production, and agricultural market
The session revolved around the Chinese agricultural market and related issues in trade, production, and food security. Professor Won Koo examined the trend of global food security with increasing population for the 2012-2050 periods. Results suggested that the global food supply might not be sufficient to satisfy demand in 2050, especially in Africa. Wei Chen showed the close relationship between China's and global vegetable oil prices in recent years. Chunquan Huang took one step further and studied the long-term and short-term effects of the price transmission for oil, sugarcane ethanol, and sugar markets. Professor Dongwen Tian shared her findings on factors affecting China's agri-food export growth patterns. Yi Qu estimated the transaction cost and the speed of adjustment among spatially separated markets in China, and found few spatial arbitrage activities in China's grain markets, suggesting that further reform toward market liberalization is needed to achieve food security with high efficiency and low cost in China. Professor Xiaobo Zhang illustrated the linkage between agriculture and health in the following presentation. He argued that the adoption of the rural household responsibility system in early 1980s lowered the risk of cognitive disabilities in China. Lisha Zhang estimated a differential demand system by using three approaches, with or without demand for domestically produced goods included. Junqian Wu presented an enhanced framework to measure China's regional specialization in agriculture, and identified recent trends and drivers of regional specialization in China's agriculture between 2003 and 2011. Bofeng Leng presented an empirical study of the effect of seed subsidies on agricultural technological progresses. Professor Xianlei Ma investigated the impact of household perceptions of land tenure security on both agricultural productivity and technical efficiency in China, using data from Gansu province of China. Results showed that household perceptions on the tenure security stimulated temporary migration and encouraged part-time farming with relatively low agricultural productivity and technical efficiency.
Health, nutrition, and food safety
Another round of breakout sessions discussed topics from health insurance to food safety in both China and the rest of the world. Mateusz Filipski analyzed the effect of the New Rural Cooperative Medical Scheme on poverty and inequality using a household panel data set. He presented results which showed that the reform reduced the poverty rate and relieved the inequality in Guizhou Province of China. Professor Zhihao Zheng demonstrated changes in food consumption patterns due to income growth and price fluctuation in China, focussing on the urban population. Boqiong Yang discussed how to measure and quantify the effectiveness of a nutrition subsidy through a randomized controlled trail in northwest China. Obesity has become a serious public health problem in China with increasing prevalence. Professor Thomas Wahl provided empirical perspectives on the issue of how food-eating location would affect the body mass index of Chinese. Qiran Zhao presented a study that examined whether parental nutritional knowledge affects the anemia of children. Professor Holly Wang introduced the concept of diary complexes (DC) in her presentation, a potential solution to the food safety for raw milk in China. She showed that the frequency of refusal, herd scale, and farmers' age are contributing to farmers' decision in accepting DCs. Chen Zhen considered the quantitative effect of taxing sugar-sweetened beverages on consumer demand by using scanner data. Professor David Ortega discussed issues on agricultural marketing and food safety in China from a utility perspective, with potential solutions explored. Yuqing Zheng examined international impacts of two recent food policies from the US Food and Drug Administration: a third-party food safety certification and a ban on import. Chen Zhu provided an empirical study that investigated potential heterogeneous effects of a voluntary Front-of-Package (FOP) nutritional labeling system on consumer purchasing behavior across the population. The New FOP label showed strong negative relationships with consumers' intake of calories, sugar, and sodium, which can be principally attributed to its reduced information costs.
Land, labor, and capital
Professor Shida Henneberry presented a study that explored whether changes in economies of the USA, Mexican, and China had an effect on the agricultural labor market in Mexico. Results indicated that the real relative manufacturing wage between Mexico and China can affect the demand for agricultural workers in Mexico. Professor Linxiu Zhang provided a framework analyzing whether long-term rural-to-urban migrant workers equitably benefited from the New Cooperative Medical Scheme, a policy designed to provide health insurance to the rural population in China. Professor Zhangyue Zhou introduced agricultural reforms in Australia and China. He highlighted achievements and challenges confronted by China, and emphasized that innovative institutional reforms would be keys for China's future agricultural growth. Lili Jia provided empirical evidence that a joint development of labor and land markets can contribute to land fragmentation reduction and benefit to all farmers, using a panel data collected from Zhejiang, Hubei, and Yunnan provinces of China between 1995 and 2002. Professor Rong Kong discussed how a structured credit product with an imbedded insurance would meet both farmers' social security demand and related credit demand, with reduced financial risk of financial institutions at the same time.
Resource, environment, and climate change
Professor Nico Heerink investigated the impact of a government's water allocation intervention on farmers' production decisions in northern China, and showed that the intervention resulted in a shift from planting potatoes toward grains with relatively low water requirements. Professor Honghua Chen presented a methodological contribution to the study of farmers' risk aversion on the adoption of new agricultural technologies. Results revealed that farmers with more initial wealth were less risk averse, and tended to accept genetically modified rice more. Xin Yang discussed the farmland ecological compensation in China by taking Wuhan province as a case study. Professor David Ortega presented their work examining farmers' preferences for drought-tolerance traits in rice using data collected from discrete choice experiments conducted in rural Bihar of India. Lei Ru provided a study that investigated the trend of total-factor energy efficiency in China's sugar industry by using firm-level data. Professor Jinxia Wang explored consequences of climate change on water security and agriculture in China under alternative climate scenarios. Professor Chaoqing Yu investigated the biophysical impacts of changes in climate on crop yields using data of local climatic and soil conditions in China. Yangjie Wang provided an analysis on how expected climate changes would potentially affect Chinese agriculture. Yuquan Zhang presented a study employing the recently developed China Agricultural Sector Model (China-ASM) to investigate potential climate change impacts within an economic framework.
International agricultural development
Kangkang Yu examined the relationship between transaction costs and performance variance of peasant households and specialized cooperatives across different regions of China. Yumei Zhang provided empirical perspectives on the issue of whether preferential policies can increase rural incomes and reduce the income gap in China. The analysis was conducted using data from a four-wave census of households in three villages in Guizhou province. Results demonstrated that preferential policies had significant impacts on income mobility. Ishaq Muhammad presented results of an empirical study investigating food consumption behavior of households in Pakistan by estimating a Linear Approximate Almost Ideal Demand System model. Junpeng Li studied factors affecting smallholder farmers' cattle market participation in western Oromia of Ethiopia, using data collected from 150 households from January to May 2010. Haoran Yang presented another piece of empirical evidence to the study of land rental market and income inequality in rural China. Their results revealed that the participation in land rental market might raise the income inequality, given an imperfect land rental market.
China-Africa cooperation on agriculture
Based on a panel of household survey responses from six poverty counties in China, Jieying Bi provided poverty profiles of rural China using both uni-dimensional and multi-dimensional poverty measures. John Mazunda presented another contribution to the study of multi-dimensional poverty, tracking and comparing changes in the poverty level of Malawi between 2004 and 2010. Huihui Deng discussed the multilateral resistance in the China-Africa agricultural trade, with potential effective measures to reduce the resistance explored. Qianqian Liu provided an overview of the current China-Africa cooperation, and discussed a new approach to improve the effectiveness of development. Yueji Zhu compared two forms of China's foreign aids to Africa: "offering fish" and "teaching fishing." Results from survey data of senior Chinese agricultural experts involving in the assistance project from 2008 to 2010 revealed that "teaching fishing" in Africa was still far from effective, and changes in aid models were necessary to improve the efficiency.