2011.09-Agricultural Research & Development, Productivity Growth, and Poverty Reduction Lessons from China

Agricultural Research & Development, Productivity Growth, and Poverty Reduction: Lessons from China
Kevin Z. Chen and Yumei Zhang

Abstract
　　The recent decline in public investment in agriculture worldwide (including agricultural research and development R&D) has been raised by many as the key factor to this continued challenge. A major question in confronting this challenge is the extent to which investment in agricultural research and development leads to increased productivity throughout the world. With less than 9% of global land, China has succeeded in providing food security for 20% of the global population and lifted its people out of poverty. Along with policy reform and infrastructure
development, agricultural technology is considered to be key factor in driving China’s remarkable achievement. Despite the great progress in China's agricultural development, China’s agriculture is still facing tremendous challenges. China has the largest population with about 1.33 billion persons. The constraints of natural resource are severe per capita arable land and water resources are lower than the world average level, and are declined with the
urbanization. At the same time, excessive use of fertilizer and pesticides give new pressure to the environment and ecology. The safety problems of food and ecology became more serious. On the other hand, with the increasing population, urbanization and household’s income, the demands for agricultural products in China are raising as well. By 2050, demand for dairy products would increased by six times more than today’s level, demand for aquatic products would increased by three times, and demand for vegetables and fruits would be doubled. The Government of China considers agricultural technological modernization and innovation a key to cope with the challenges, to improve the future productivity and to keep the long term sustainable growth. In the recent years, the growing food
production, improved status of food security, and reduced population under poverty in China has prompted many to consider China as a success story. The purpose of this paper is to provide an overview of China’s agricultural research system, synthesize the evidence on the impact of agricultural R&D investment on agricultural productivity growth in China, identify the challenges faced by China’s agricultural research system, and to provide perspectives on the future development of the Chinese research system. The paper would help illustrate how China’s experience may be relevant to the rest of the developing world.
I. Introduction
　　The recent food and financial crisis threatens the livelihoods of millions of poor people in many developing countries. Food security is a continued challenge throughout the world (von Braun et al., 2008). The World Bank estimates that the triple crisis (financial collapse combined with the food and fuel price crises) would push an additional 53 million people into poverty in 2009 (Chen and Ravallion, 2009). The UK Department for International Development (DFID, 2009) estimated that an additional 90 million people will be living on less than $1.25 a day by the end of 2010. The majority of those new poor will be from South Asia and Africa counties where agriculture is still
dominant. Increasing agricultural productivity is considered to be the key strategy in lifting the poor out of poverty in those regions. A major question is to what extent can investment in agriculture lead to increased productivity throughout the world. The Chinese agricultural and food security situation have not been affected significantly by the recent food and financial crises. China has recorded consecutive crop harvests in six years during 2004-2009. An increase in crop production is largely due to unprecedented gains in productivity driven by the recent surge in agricultural R&D expenditure in China. China has created the miracle achieving self-sufficiency in a country which is the world’s largest in terms of population but very limited with respect to its cultivatable land. Chinese grain output was not only enough to feed Chinese people, but also contributed to the rest of the world by supplying food and stabilizing, or even lowering world grain prices (Fan et al., 2000). Along with the policy reform and infrastructure construction, agricultural technology is considered to be a key factor in driving this remarkable achievement in China.
The important issue to consider is – can what has worked for China be applicable to other developing countries?
　　The recent worldwide decline in public investment on agriculture (including agricultural research and development R&D) has been considered by many as one of key reasons for the continued challenge of food security in developing nations. A major question in confronting the challenge of food security throughout the world is the extent to which investment in agricultural research and development leads to increased productivity. The purpose of this study is to explore how the Chinese experience can help illuminate this question. The four specific objectives are 1) to provide an overview of China’s agricultural research system; 2) to review the studies on the impact of agricultural R&D investment on agricultural productivity growth and poverty in China; 3) to identify new challenges and issues in the future agricultural productivity growth, and 4) to seek the relevance in China’s experience with
respect to the rest of the world’s developing countries.
II. Agricultural R&D System in China: an Overview
　　Significant progress has been made towards building up China’s R&D system since the end of last decade. From 1999, China’s spending on research has increased by almost 19% each year. In 2007, it reached 371 billion RMB. The government policies play an important role fostering this system. The government sets framework conditions, develops and implements policies, and provides financial support for R&D. Governance and organization of the S&T system, in which the Ministry of Science and Technology (MOST) plays a prominent role, is presented in
Figure 1 (OECD, 2007). The State Council Steering Group for Science, Technology and Education is a top‐level co‐ordination mechanism, which meets two to four times a year to deal with strategic issues. A number of ministerial level agencies – the National Development and Reform Commission (NDRC), the Chinese Academy of Sciences (CAS), the Chinese Academy of Engineering (CAE), sector line ministries such as the Ministry of Information Industry (MII) and the Ministry of Agriculture (MOA), and the National Natural Science Foundation of China (NSFC) play a direct role in designing and implementing S&T and innovation policies. A number of other ministerial agencies, notably the Ministry of Finance, and the Ministry of Commerce have significant influence on S&T and innovation policies and implementation, while others, such as Ministry of Personnel and the State Intellectual Property Office, also exert an important, albeit somewhat indirect, influence.
　　China’s agricultural research system has expanded rapidly since 1978 as well and is now the largest systems in the world (Stone 1988; Fan and Qian, 2005). In 2007, China’s spending on agricultural R&D reached 12.3 billion RMB (in 2005 dollar). Chinese agricultural research has been primarily built around Chinese Academy of Agricultural Sciences (CAAS) and to lesser extent agricultural universities and Chinese Academy of Science (CAS). As the nation’s primary research institution in natural sciences and technologies, Chinese Academy of Sciences (CAS) also undertakes agricultural research and has several institutes, such as Institute of Genetics and Developmental Biology, Institute of Geographic Sciences and Natural Resources Research, Institute of Botany, Institute of Zoology, Institute of Microbiology, and Institute of Subtropical Agriculture. CAS is under the Ministry of Science and Technology. Some other non-agricultural research institutes and universities, agribusinesses, and others have recently emerged
to advance agricultural technology and science in China.

Research Institute
　　Agricultural institutes are the main research units in China. The institutes are divided into national, provincial, prefectural and county levels. National institutes include the Chinese Academy of Agricultural Sciences (CAAS), Chinese Academy of Fishery Sciences (CAFS), Chinese Academy of Tropical Agricultural Sciences and their subinstitutes. They report to the Ministry of Agriculture, and focus on basic research and technology with the main objective being to solve key nation-wide problems. Each province has its own provincial academies of agricultural sciences, at least one agricultural university, and several other agriculture-related colleges. Most prefectures
have their own agricultural research institutes. Provincial academies are under the jurisdiction of parallel departments in provincial governments (Fan, et. al., 2006). The institutes in provincial academies stressed applied research in accordance with the ecological conditions of each province. Prefectural institutes mainly engaged in
selection and adaptive research. County research institutes are primarily responsible for extension work (Lin, 1998). The agricultural research system is large but lacks mechanisms of cooperation. The major reason is that most research institutes are located in different government agencies with various sources of funding. A number of national mega-projects such as the national 973 project have recently been designed in such a way to foster inter-institute and inter-disciplinary collaboration.
　　According to the Ministry of Agriculture, by the end of year 2007, there were 1,105 agricultural research institutes in China. Among them, 59 institutes are under the Ministry of Agriculture, 454 are provincial institutes, and 592 are prefectural institutes. The total staff were 93,507 persons with 60,041 active research staffs, and 38,441 persons were assistant staff. The number of retirees was large at 67,759 which was about 40% of all current staff. The size of individual national institutes is usually larger than provincial and prefectural institutes. The average staff size was about 200 for per national institute, and about 100 and 50 persons per provincial institutes and prefectural institutes, respectively. The staffs of provincial and prefectural institutes together counted for 88% of total. Table 1 presented the number of agricultural research institutes and staff in China for the year 1986 and 2007. Compared with the situation in 2007 with that of 1986, there are a number of interesting observations. First, both the numbers of institutes and the staffs were reduced, and staff per institute was reduced from 122 to 85. This was a direct result of reforming institutes with an overstaffing problem during mid-1990s. Second, the ratio of scientists and engineers to the overall staff increased from 21% to 44%. This is an indication of improved quality of researchers. Third, the share of retirees increased from 15% to 42%. Due to nature of China’s social welfare system, the individual institute is responsible for taking care of retirees at the institute. The economic burden of taking care of those retirees had become a significant issue for the institute. Fourth, expenditure per scientist increased from about 70 thousand yuan in 1986 to about 230 thousand yuan in 2007 at 2005 constant price. The funding has also more than doubled during the last two decades. Fifth, in terms of agricultural research output, the total number of papers published increased dramatically from 7 thousand pieces in 1986 to more than 23 thousand pieces in 2007. In 2007, the total number of books and patents were 630 and 575, respectively. In terms of the share of published books, national institutes were about 35% and provincial institutes were about 50%, prefectural institutes occupied 13%. For the patents, national and provincial and prefectural institutes account for 31%, 50% and 18% respectively.
University
　　Both agricultural and comprehensive universities are actively involved in agricultural research in China. There are 54 agricultural universities or colleges in total and each province has at least one agriculture university. The agricultural universities in China employ 42,086 staff and about 40% of them being researchers (Ministry of Education, 2008). Most of the agricultural universities or colleges are under the administration of the provincial department of education, except for three key agricultural universities. China Agricultural University, Nanjing Agricultural University, and Central Agricultural University are under the jurisdiction of the Ministry of Education after 2000. Prior to 2000, there were seven key national agricultural universities (China Agricultural University, Nanjing Agricultural University, Shenyang, Northwest, Central China Agricultural University, South China Agricultural University, and Southwest Agricultural University) under the jurisdiction of the Ministry of Agriculture. Provincial agricultural universities are managed by their respective provincial governments (Fan et al., 2006). Since 2009, the Ministry of Agriculture and the Ministry of Education have been collaborating to support eight universities (China Agricultural University, Northwest Agricultural and Forestry University, Nanjing Agricultural University, Central China Agriculture University, Southwest University, Jilin University, Shanghai Jiao Tong University, and Zhejiang University) with the hopes of enhancing their research ability and education quality. These universities have stepped up their
research efforts in recent years by recruiting talents globally.
Enterprise
　　According to a nation-wide survey of the Ministry of Agriculture on private agricultural research in 2007, the number of researchers in agricultural enterprises had increased substantially. There were about 39,175 research staff in agricultural and food enterprises in 2006, and among all researchers, about 13% of researchers had a masters or doctoral degree (Hu, et al., 2009). However, reported by China Statistics of Science and Technology for the year 2008, active research staffs who engaged in food processing were 49,105 persons in 2007 at medium and large scale enterprises, and with 30,517 scientists & engineers. The discrepancies were likely related to the different scope and definition of food processing enterprises.
Staff by Sector
　　Table 2 summarizes all the staffs from agricultural research institutes, universities and enterprises and their distribution among sub-sectors in 2007. The number of active research staff in total was about 160,000, with 115,000 scientists and engineers (about 72% of active research staffs). Close to 50,000 focus their research on crops, this
is by far the largest group accounting for about 68% of total active research staff, followed by、 agricultural services (19%), forestry (15%), animal husbandry (10%), and fishery (6%). The number of active research staffs in primary agriculture (including crop, animal husbandry, forestry, and agricultural service) accounted for 44% of the total,
while food processing and other agricultural related sectors together accounted for 56%. By individual sectors, food processing has the most staff at 53,000, accounting for about 33%, followed by the crop sector at 30%, then by
agricultural services and forestry sectors at 8% and 7%, respectively. It is clear that food processing enterprises are major sources of employment for research and development staff in China. The percentages of active research staff
engaged in research on biology, water conservation, and animal husbandry were about 5%, respectively, while the percentages of fishery and agricultural machinery were 3%, respectively.
Funding Mechanism
　　Funding mechanism for agricultural R&D in China has undergone substantial reforms and become more and more complex. Before reforming, almost all funds for agricultural research were from government through Five-year Plans, with supplementary funding for special issues arising during the planning period, and allocation of
research funds to research institutes were also largely based on the numbers of research staff, and were not in any way linked to the performance of the institutes. Recurrent budget were used to staff and retiree salaries.
　　Funding to S&T is made through a series of instruments of the government. In the state ministries and agencies, core national programs are set up to support the policy objectives: first, to support for basic research consists of various programs, such as the NSFC programs, the MOST 973 program and various programs designed to develop human resources (Yangtze River Scholars Program, CAS 100 Talents Program, etc.), and, second, to support for
technology innovation and commercialization includes programs for the development of specific new products, for the construction of infrastructure for tech-transfer (MOST Torch and Spark Program), for S&T Achievement Dissemination, etc. Related measures include the Technical Innovation Fund for SME‐Tech Firms and provisions for tax incentives, venture capital, etc. At national level, the National Development and Reform Commission (NDRC) authorizes the annual budgets for all ministerial spending, including the Ministry of Science and Technology (MOST) and Natural Science Foundation of China (NSF). The MOST is in turn responsible for allocating the science and technology funds at its disposal to the various agricultural and nonagricultural ministries and national research
agencies such as the Chinese Academy of Science and Chinese Academy of Agricultural Sciences. At the national level of government, allocation procedures are largely driven by precedent and political considerations, but within
the respective ministries and agricultural research agencies (such as CAAS), currently there are no formally established or transparent mechanisms for setting research priorities and allocating funds (Fan et al., 2006). Most funds of the research institutes at national level are from the MOST, MOA and other related ministries through Science and Technology (S&T) plan. S&T plan for the Eleventh Five Year (2006-2010) are divided into several types according to their objectives, including National Basic Research Program (in short, 973 Program), National High-tech R&D Program (in short, 863 Program), Key Technologies R&D Program, and Infrastructure and Capacity Building for S&T.
　　Table 3 lists the major national S&T programs, as well as their main objectives and research related agriculture, while Table 4 presents funding allocation of key national S&T programs. Government expenditure on these national
programs was increased steadily. From the period from 2001-2005, on average, 17% of the total national S&T expenditure was spent on these national programs. The Ministry of Agriculture and the Ministry of Finance also provide project funds, such as “948” program, initiated in 1994 with the aim of attracting leading advanced technology to China from abroad. New non-competitive funds like basic research funds for non-profit research
academies and institutes were initiated in 2006, to support the innovation sustainably. The most recent new funding initiative for agricultural R&D is the funding for constructing innovation system for major agricultural commodities, including 10 agricultural products in 2007 and now expanded to 50 products in 2009. The initial three-year phase
of the funding is 967.5 million yuan aimed at promoting key technological research work and to enhancing the practical application of research outcomes.
　　Funding mechanisms at the provincial and prefectural levels parallel those at the national level. All core budgets of research institutes at provincial and prefectural levels are funded from the corresponding local governments. The
research projects conducted at the provincial and prefecture institutes are financed mainly by local governments. Some national funds flow to local government agencies, in some instances from the national to the provincial institutes in support of collaborative research activities (Fan et al., 2006).
　　The reforms of research system initiated at the beginning of 1980s to allocate research funding. Some of research agencies started self-fund and thus were responsible for their own profits or losses (Lin, 1991). From the mid-1980s, research agencies were permitted to sale their technologies, provide consultancy service, and obtain their funding through competition (Fan and Qian, 2005). During this reform period, many research institutes
established commercial companies. Research institutes were encouraged to apply for funds from the National Natural Science Foundation, Ministry of Agriculture, and other government agencies and foundations. Funding sources from international organizations and foreign agencies through collaborative research had also been
encouraged (Fan, 2000). The reward system was reformed and the compensation of researchers was linked to their performance. Researchers can submit proposals to apply and obtain competitive grants. In particular, a large share of research staff’s income was from project funds she or he for applied. One of the obvious results of reform was
the rapid rise of competitive funding. The share of competitive funds had increased from zero in 1985 to about 30% in 1998, and then 41% in 2006 (Huang and Hu, 2008). The share of project revenue in government grants for agricultural research institute from MOA was increasing steadily.
　　Funding for most research institutes consists of both core and project funds. Core funds are mainly used for salaries and benefits and are allocated by central and local financial departments at the various levels of government. The structure of funding sources of research institutes and enterprises are showed in Table 5. The funding sources were very different between research institutes and enterprises. The funding of research institutes were mainly from government grants and its share increased from about 55% in the period of 1986-1995 to 86% in 2007. The funding for enterprises was from within and its share increased from about 70% during 1995-2000 to near 90% in 2007. The share of bank loans as the funding source has declined over time for both institutes and enterprises, with less than 1% and 6% respectively in 2007.

III. Agricultural R&D Investment: Scale, Structure, and Trends
Scale and Structure of Agricultural R&D Investment
　　It is challenging to obtain consistent information on total investment in agricultural R&D because of the involvement of many governmental agencies and private enterprises. In the literature different numbers on China’s agricultural R&D investment were often reported and difficulty to reconcile across the studies. To gather a more complete picture of China’s total R&D investment, attempts are being made to collect R&D information from all
sectors related to agriculture, including crop, forestry, animal husbandry, fishery, agricultural services, agricultural machine, water conservancy, food processing, biology, and agricultural inputs. For comparison, primary agriculture, which covers crop, forestry, animal husbandry, fishery and agricultural services, is separated from a more
broadly defined agriculture. Table 6 provides Chinese agricultural R&D investment in 2007.
　　The total Chinese agricultural R&D investment was about 25 billion yuan at 2005 constant prices. The share of R&D by research institutes was about 50%, about 10% by university, and about 40% by enterprises. The share of enterprise in this report is much higher than those reported in other studies. For example, Hu et al (2009) reported
about 22% of the total agriculture R&D was private in China. The difference was due to different sources of the data as well as definition of R&D expenditures by enterprises. Based on China Statistical Yearbook of Science and Technology by the MOST, the R&D expenditure on food processing was about 5.4 billion yuan in 2006. This figure was only for medium and large sized food processing enterprises. However, based on the MOA survey in 2006, the R&D expenditures on food processing was about 1.4 billion yuan. The reason why the figure from the MOA survey
was much smaller is due to the fact that the MOA survey did not include all food processing enterprises. Moreover, R&D data from the MOST also included expenditures spent purchasing equipments by the enterprises, which could
overestimate the R&D expenditures by the enterprises.
　　Research investment on biology by universities included basic biology, medical biology, and agricultural biology. The data is not available to separate the R&D expenditure by those three subjects. As a result, both shares of R&D
expenditures on biology and by universities are higher than the actual numbers show. Research institutes invested more in crop, forestry, and fishery, while enterprises invested more in animal husbandry and food processing.
　　The share of R&D in food processing accounted for 33.4% on total agricultural R&D, followed by R&D in crops at 30%, animal husbandry at 8.1%, agricultural service at 6.9%, forestry at 5.5%, fishery at 4.3%, water conservancy at 5.3%, biology at 3.6%, agricultural machine at 3%, and agricultural input at 0.2%. It is also interesting to look at the R&D on primary agriculture alone. The total R&D investment in primary agriculture was about 14 billion yuan in 2007. The crop sector accounted about 55%, followed by animal husbandry at 15%, agriculture service at 13%, forestry at 10%, and fishery at 8%. For primary agriculture, the share of research investment from institutes was the largest at about 75%, while that of universities and enterprises accounted for 10% and 15%, respectively.
Trends of Agricultural R&D investment
　　Analyzing the overall trend of agricultural R&D is very much constrained by the availability of data. The data on R&D investment by research institutes was relatively extensive and accessible for the period from 1986 to 2007 (Table 7, while agricultural R&D investment by enterprises was available from 1995 to 2007 (Table 8). The most
limited data is on agricultural R&D investment by universities which was available only for the period from 2001 to 2007. As a result, trends of agricultural R&D investment are discussed separately below.

Public Research Institute
　　The public R&D investment in primary agriculture increased from about 2,753 million yuan in 1986 to 8,499 million yuan in 2007 at 2005 constant prices with annual growth rate of 5.5%. The R&D in broadly defined agriculture increased from 3,347 million yuan in 1986 to 12,336 million yuan in 2007 with the annual growth rate of 6.4%. The research investment on primary agriculture accounted about 70% of public R&D expenditures on broadly defined agriculture. Both investments in primary and broadly defined agriculture were stagnated in the late of 1990s, but increased quickly during 2000s. The annual average growth rates of agricultural R&D were higher than 10% during
2000s. The research investment on crop, particularly grain, was the top priority among subsectors (Fan et al., 2006), it stabilized at near 50% of the total investment on primary agriculture. Research investment on animal husbandry
increased fast during 1986-1995, but declined during 1996-2000, and recovered with about annual average growth rate of 4% during 2001-07. The share of animal husbandry went down from 12% during 1986-1995 to only about 5% in 2001- 2007. The research investment on agricultural services and agricultural machine grew rapidly with average annual growth rate of about 10% during 1986-2007 and their shares increased from about 5% and 4% during 1986-1995 to near 15% and 6% in 2000-2007, respectively. The research investment in food processing grew rapidly at 12% during 1986-1995, but many food processing research institutes were transformed into enterprises after 1996 during the reform of agricultural research system. As a result, the growth of research investment on food processing
slowed down or even became stagnant, and its share was relatively small at about 5%. Research investment on water conservancy accounted for 10% and its annual growth rate was about 6.5% during 1986 to 2007. The details of investment, sector structure and growth rate in research institutes were presented in Table 6.
University
　　Although the share of agricultural research investment by universities is relative small at about 10% of total investment, it has developed rapidly in recent years. Table 7 provides agricultural R&D at the universities from 2001-07. The average annual growth rate was 22.8% for the period of 2001-07, which has grown at a much faster rate than R&D investment by the institute. Major source of this growth comes from non-crop research investment. One single most important source is R&D investment on food processing after 2006, which accounted for about 15% of total
agricultural R&D by university. The other growths are from animal husbandry, forestry, biology, and fishery. The R&D investments in animal husbandry and forestry research was grown at a rate higher than 30%, followed by biology at
25.4% and fishery at 25.2%. Shares of R&D investment on biology and crop were largest, accounted for 31% and 28%, respectively, followed by food processing (15%), forestry (9%), animal husbandry (9%), water conservation (6%)
and fishery (2%).
Enterprises
　　One characteristic of agricultural research in China is the dominance of public research. Until 1990s, private investment on agricultural research was very small. Private research investment in China grew from zero in 1985 to $11-$16 million in 1995 (Pray, 2002). Private investment in agricultural research was only about 3% of the total agricultural research expenditure and most was from foreign investment. Private R&D intensity was only about 0.009% and had little impact on agricultural production (Pray and Fugli, 2002). Huang et al. (2003) also estimated that private investment in agricultural research was about 1.7% by 1999. Government restrictions on the role of the private sector and weak intellectual property rights as well as uncertainty surrounding foreign ownership of joint ventures were the major factors explaining the limited private research (Pray 2002; Pray and Fuglie, 2002). Another
reason was overarching public R&D system in China which appeared to crowd out private R&D (Huang et al., 2003). Many substantial reforms were implemented to reduce government funds and increase non-governmental funds to
agricultural research during 1990s (Fan et al., 2006). Some agricultural research institutes were transformed to enterprises. Many agriculture related enterprises began to invest in research.

　　In the recent years, private agricultural investment developed rapidly. Zhang et al. (2005), based on MOST survey data on 1,000 large scale agricultural enterprises, calculated the share of agricultural research investment by enterprise to public agricultural research investment was about 9.6% in 2003. Zhang, Fan, and Qian (2006) estimated that about one-fifth of agribusinesses are involved in agricultural research, resulting in a private-sector share of total agricultural R&D spending of 9 percent in 2003. Most of these firms, however, were still partially state-owned. The Ministry of Agriculture took nation-wide survey of research investment by agricultural enterprises in 2007. The survey found that private agricultural research investment reached 3,700 million yuan in 2006, accounted about 22% of the public agricultural research investment with a total amount of 14,700 million yuan and its average annual growth rate was near 27% during the period 2000-2006 (Hu et al., 2009). The funds of private agricultural research investment were mainly from enterprises within, accounted for 90 % of its total research fund. Most of them invest on
the areas where intellectual property rights are relatively easier to protect. The share of private R&D in food processing and animal husbandry are among the largest with 41% and 33%, respectively. The shares of crop and fishery were about 15% and 9%, respectively, while the share of agricultural input research, such as fertilizer and
pesticide was about 2%. One of the reasons for small share of agricultural input is because many enterprises were not administrated and therefore not included in the survey by the Ministry of Agriculture (Hu et al., 2009). The data from China Statistical Yearbook of Science and Technology showed that enterprises invested more and more in food processing research. The investment on food processing increased from 404 million yuan in 1990 to 7,661 million yuan (measured at 2005 constant price) with average annual growth rate near 20%.
Region Distribution of Agricultural R&D Investment
　　Investment intensity, calculated as the percentage of research investment to the GDP is usually used to measure the degree of R&D investment. The agricultural research investment intensities (ARII) were calculated by region and presented in Table 9. In the calculation, R&D investments of provincial and prefectural agricultural institutes were included, while the national institutes in each region were excluded. Huang et al (2004) showed
that the difference would be larger if national institutes were included. Eastern China invested more on agriculture research, accounting for more than half of total agricultural research investment (52%). The value of ARII for eastern China was at 0.34%. The ARIIs for Central China and Western China were much lower at 0.17% and 0.11%, respectively. The gap is also getting larger over time. At the decentralized agricultural research system like in China, agricultural R& D investment is very much constrained by the local fiscal situation. The developed regions were usually able to invest more.
Agricultural R&D in Fiscal Expenditure
　　The share of government spending on general R&D expenditure was around 4% during last two decades, and declined slightly from 5.1% in 1986 to 3.6% in 2007 (Table 10). The growth rate of R&D investment was slower than the growth rate of average fiscal expenditure during the same period. The intensity of general fiscal R&D investment fluctuated between the ranges of 0.5- 1.0% during this period. Agricultural R&D investment accounted for about 10% of general R&D expenditure in China. The share of agricultural research investment declined during 1990s, but has increased rapidly in recent years. The trend shapes like “v” during last three decades, slowed down during the period from 1994 to 1998 and went up significantly after 1999. The intensity of primary agricultural public R&D
investment was about 0.3% - 0.5% during the period from 1986 to 2007, which was much lower than the intensity of Fiscal S&T Investment in general at about 0.7%. If the other sources of R&D investment are included, the intensity of general R&D investment would be up to 1.44% in 2007 (Ministry of S&T, 2008). It is clear that the intensity of agricultural R&D investment is much lower than that of non-agricultural industries.
Priority of Agricultural R&D among Sub-sectors
　　Both governments and enterprises have increased their investments in agricultural R&D in the recent years, but their investment priorities are very much different. The intensity of agricultural research investment by sub-sector is calculated and agricultural enterprises, calculated the share of agricultural research investment by enterprise to
public agricultural research investment was about 9.6% in 2003. Zhang, Fan, and Qian (2006) estimated that about one-fifth of agribusinesses are involved in agricultural research, resulting in a private-sector share of total agricultural R&D spending of 9 percent in 2003. Most of these firms, however, were still partially state-owned. The Ministry of Agriculture took nation-wide survey of research investment by agricultural enterprises in 2007. The survey found that private agricultural research investment reached 3,700 million yuan in 2006, accounted about 22% of the public agricultural research investment with a total amount of 14,700 million yuan and its average annual growth rate was near 27% during the period 2000-2006 (Hu et al., 2009). The funds of private agricultural research investment were
mainly from enterprises within, accounted for 90 % of its total research fund. Most of them invest on the areas where intellectual property rights are relatively easier to protect. The share of private R&D in food processing and animal husbandry are among the largest with 41% and 33%, respectively. The shares of crop and fishery were about 15%
and 9%, respectively, while the share of agricultural input research, such as fertilizer and pesticide was about 2%. One of the reasons for small share of agricultural input is because many enterprises were not administrated and therefore not included in the survey by the Ministry of Agriculture (Hu et al., 2009). The data from China Statistical Yearbook of Science and Technology showed that enterprises invested more and more in food processing research. The investment on food processing increased from 404 million yuan in 1990 to 7,661 million yuan (measured at 2005 constant price) with average annual growth rate near 20%.
Region Distribution of Agricultural R&D Investment
　　Investment intensity, calculated as the percentage of research investment to the GDP is usually used to measure the degree of R&D investment. The agricultural research investment intensities (ARII) were calculated by region and presented in Table 9. In the calculation, R&D investments of provincial and prefectural agricultural institutes were included, while the national institutes in each region were excluded. Huang et al (2004) showed
that the difference would be larger if national institutes were included. Eastern China invested more on agriculture research, accounting for more than half of total agricultural research investment (52%). The value of ARII for eastern China was at 0.34%. The ARIIs for Central China and Western China were much lower at 0.17% and 0.11%, respectively. The gap is also getting larger over time. At the decentralized agricultural research system like in China, agricultural R& D investment is very much constrained by the local fiscal situation. The developed regions were usually able to invest more.
Agricultural R&D in Fiscal Expenditure
　　The share of government spending on general R&D expenditure was around 4% during last two decades, and declined slightly from 5.1% in 1986 to 3.6% in 2007 (Table 10). The growth rate of R&D investment was slower than the growth rate of average fiscal expenditure during the same period. The intensity of general fiscal R&D investment fluctuated between the ranges of 0.5- 1.0% during this period. Agricultural R&D investment accounted for about 10% of general R&D expenditure in China. The share of agricultural research investment declined during 1990s, but has increased rapidly in recent years. The trend shapes like “v” during last three decades, slowed down during the period from 1994 to 1998 and went up significantly after 1999. The intensity of primary agricultural public R&D
investment was about 0.3% - 0.5% during the period from 1986 to 2007, which was much lower than the intensity of Fiscal S&T Investment in general at about 0.7%. If the other sources of R&D investment are included, the intensity of general R&D investment would be up to 1.44% in 2007 (Ministry of S&T, 2008). It is clear that the intensity of agricultural R&D investment is much lower than that of non-agricultural industries.
Priority of Agricultural R&D among Sub-sectors
　　Both governments and enterprises have increased their investments in agricultural R&D in the recent years, but their investment priorities are very much different. The intensity of agricultural research investment by sub-sector is calculated and presented in Figure 2. The intensity of primary agricultural and its sub-sectors R&D investment were only calculated for public research institutes. The intensity of R&D on crop was stable over the period, ranged from 0.5-0.6%. Research investment on forestry increased fast over the period and its research intensity was over 1% after
2000. The animal husbandry research investment was the lowest and its intensity was less than 0.1% during most of years in 1986-2007. The intensity of fishery research investment was declining and its research intensity was at about 0.4%. The research investment intensity of food processing was a little higher than primary agriculture, and increased from 0.4% to 0.8% during the period 1995-2007. The main research area of private sector and enterprise were agricultural chemical products (fertilizer and pesticide), food processing, machinery, and hybrid seeds.
　　Fan, Zhang and Zhang (2003) concluded that government spending on agricultural R&D had the largest returns to growth in agricultural production. Agricultural R&D also had the second largest impact on poverty. Agricultural R&D is thus very favorable investment and should be priority for investment. Zhang (2009) compared the economic return and the impacts on poverty of agricultural subsectors. Her results showed that if increasing one unit R&D investment to livestock sector, the economic return was about 50 units, the returns of crop and fish sector R&D investment were around 30 and 15 units, respectively. If 10,000 Yuan of R&D investment was spent on livestock sector, about 28 poor people would be reduced. If 10,000 Yuan of R&D investment was spent on crop and fish, about 17 and 12 poor people would be reduced, respectively. In terms of both economic efficiency and poverty reduction, R&D investment
for livestock sector should be increased.
Types of Agricultural R&D
　　Agricultural R&D can be divided into three major types, including basic research, applied research, and development. Table 11 provides an overview of R&D expenditures by these three types from 200-08. In 2007, 11% of general R&D expenditure was spent on basic research, 33% on applied research, and 56% on development. The situation in agricultural R&D was even worse. In 2007, only 6% of agricultural R&D expenditure was spent on basic research, 24% on applied research, and 70% on development. In the United States, France, Japan, and South Korea, % of basic research on agricultural R&D expenditure was 18.7%, 26.6%, 12.3 and 14.5, respectively. Basic research
appears to have been neglected despite efforts made to encourage it in China. This pattern remained similar from the year 2000 to 2008 in China. This certainly would limit innovative capability of China’s agricultural R&D system.
International Comparison
　　China accounted for 19 percent and 9 of all expenditure on public agricultural R&D of developing countries and the world in 2000 (Beintema and Stads, 2010). However, China’s intensity of public agricultural research investment was not compared favorably with those of both developed and developing countries. China’s intensity was at 0.38% in 2000 (measured as the share of public agricultural R&D investments in total agricultural GDP), while the intensity was at 2.35% for developed nations, 0.55% for the average of developing nations, and 0.98% for the
world average (Beintema and Stads, 2010). The year 2000 was chosen because of the availability of comparable figures across nations. It is notable that, even in 2007, China’s intensity of agricultural R&D was only 0.46%. This was far below than the desired intensity 1% that FAO suggested in 1996 for developing nations. Moreover, in many
developed countries such as the United States, Britain, and Canada, private agricultural R&D investment had exceeded public investment in 1993 (Fuglie et al., 1996; 2000; Pray, 2002; Alston et al., 1998). The role of the private sector in the developing world is still small and is likely to remain so given the weak funding incentives for private research. For example, in Bangladesh, Laos, Nepal, and Sri Lanka, the private sector accounted for less than 1 percent of total (public and private) spending in agricultural R&D, Malaysia is only 5% and Thailand is about 12% in
2002/2003 (Beintema and Stads, 2008). However, agricultural research investment of private sector in China has developed very rapidly in the recent years and its share now reached at about 22% in 2007 (Hu et al., 2009) .
　　The overall funding for agriculture research stagnated during 1985-1995 for the weakened agricultural system (Huang and Hu, 2000). With national economy development and new agricultural innovation system reform since the
end of 1990s, some research institutes transformed to enterprise, and also encourage enterprise to increase investment to R&D, agricultural R&D investment increased steadily, and enterprise investment increased fast too.
Especially in recent years, a new proposal of national agricultural innovational system was put forward by the MOA and MOF in 2007; agricultural R&D investment has been increased rapidly. Though agricultural R&D has grown rapidly in China in recent years, it agricultural R&D investment is still at relatively low level. The share of agricultural R&D as a part of total fiscal R&D expenditure is only about 10%. The share of enterprise investment in agricultural R&D is still low. It is essential for China to increase its both public and private R&D investment to enhance its
agricultural productivity and long term food production capacity.
IV. Agricultural R&D on Productivity Growth and Poverty Reduction
　　A plethora of evidence stemming from both developed and developing countries shows that R&D is the main engine of agricultural productivity growth (Alston et al., 2009). Technological progress, led by R&D, together with labor, capital and land works on production. Agricultural R&D not only can increase production and promote agricultural growth through improved productivity, but also has many other indirect effects. Agricultural R&D also played a considerable role in improving food security and furthering poverty reduction. New technology and good varieties can produce an increasingly higher quality of food. There are many channels through which agricultural R&D impacts poverty. Poor people can get a higher income from high yield and thus more production as producers, or they can buy food at lower price as consumers, in addition they can also benefit from more employment and higher wages. China’s agricultural technology has made great progress and contributed a lot to the Chinese people as well as the people of the world in the past decades. Many studies provided evidence that China’s agricultural R&D can improve agricultural productivity, which in turn will increase farmers’ income and reduce poverty, improve food security and stabilize societies.
Agricultural Productivity Growth
　　Over the past three decades, China has achieved a phenomenal rate of economic growth. The growth rates of Gross Domestic Product (GDP) and per capita GDP during 1979 to 2008 were 9.8% and 8.6% respectively (NBS, 2009). The growth rate of agricultural GDP was 4.6%, but the growth rate was much faster than most of other countries (Fan et al., 2006). Table 12 provides production and growth of major agricultural and livestock products from 1978-2007. At 2005 constant prices, agricultural gross output and value added increased from 648 billion yuan and 473 billion yuan in 1978 to 5,149 billion yuan and 3,018 billion yuan in 2008, which represents an increase approximately six and five times, respectively, during the last three decades. With the rapid growth of agricultural output, rural household’ income increased as well. Per capita net income of households increased from about 600 yuan in 1978 to near 4,000 yuan in 2007 at 2005 constant prices, which is more than a fivefold increase, and its growth rate was higher than 6% (Figure 3). The economy structure also underwent dramatic adjustments. Although agricultural subsectors all increased, the growth rates were different. To satisfy people’s increasing demand
for meat and fish, livestock and fishery sectors developed much faster than crop and forestry sectors. The growth rates of livestock and fishery gross output value were higher at 10% and 13%, respectively, while the growth rates of crop and forestry were only 5% and 7% during 1978-2007 (Figure 4). As the structures changed dramatically, the shares of livestock and fishery increased from 15% and less 2% in 1978 to more than 33% and 9% in 2007, and the shares of crop declined from 80% to 50%, the shares of forestry did not change much at about 3%.
　　Having benefited from market reform, agricultural products became abundant and people’s lives were improved. Table 10 lists the production and growth rate of major agricultural commodities in the past three decades. First, grains increased from about 300 million tons to 500 million tons. The average annual growth rate was about 2%, and developed fastest during the 1980s, but was almost stagnant during the 1990s, but began to grow again during 2000s due to many favorable government policies and investment such as the increased agricultural subsidies and abolishment of agricultural tax. Rice and bean production grew slower, while maize and wheat grew rapidly. The main reason was the reduction of sown areas for rice and bean production. Traditional crops grew
more moderately with average growth rates of 5%. The growth trend was different among crops. Oil crop and sugar beet grew slowly, while the growth rate shape of cotton and sugar seemed “v”, growing faster during 1980s and declining in 1990s, but increasing once again after 2000. In contrast to grains and traditional crops, meat and fruit production had experienced much faster growth with an average annual growth rate of about 10%. The fruit production rocketed from 6.6 million tons in 1978 to 181 million tons in 2007. Aquatic products increased from 5.5 to 47.5 million tons and its growth rate was about 10%. Pork output increased from 13 million metric tons to 43.0 million tons from 1983 to 2007 (NBS, 2008).
　　Due to the success of rural reform and adoption of new technologies, rice, wheat, maize and bean yields all enjoyed a rather rapid growth in the rural reform period of 1978-1984 with annual rates of 5.1%, 8.3%, 6.0% and 3.9%, respectively. However, their growth rates had dropped to 1.7%, 1.9%, 3.2% and 2%, respectively, during the subsequent period of 1985-1995. The improvement in yield purely due to technical change is usually regarded as technical efficiency gains. The improvement in rice and wheat yield plays a key role in maintaining grain production at
high level under the declined land in China. The yields of rice, maize and bean largely leveled off during the period of 1996-2006, only wheat yield has continued to increase by an impressive 2 % per year.
Evidences on Links between Agricultural Productivity and R&D Investment
　　Agricultural research, conventional inputs and institutional reforms contributed to the rapid agricultural production growth over the past several decades. Agricultural research was the second largest source of agricultural output growth and accounted for about 20% of the growth during 1965 to 1989, and the effect of institutional reforms on the productivity declined and the long term effect of new technology was larger (Fan and Pardey, 1992). Huang and Rozelle (1996) also noted that technical change was one of the most important factors that contributed to agricultural growth during the entire reform period, particularly after 1984. A large proportion of agricultural growth in China can be attributed to productivity improvement, which in turn comes primarily from new technologies released by the national agricultural research system (Fan et al., 2006). Fan (2000) showed that about 95% of agricultural
GDP growth can be attributed to input increase and only 5% can be attributed to productivity growth before 1979, while since 1979, productivity growth contributes most of the agricultural GDP growth, and its share is about 71%, future growth in agricultural production will rely on continued productivity improvements.
　　Solow residual approach is one of the traditional measures used to estimate the contribution to growth of technological progress, which is explained as the residual of the contribution of inputs. This approach was also widely used in China. Zhu (1994, 1997, 2002) measured that the contribution of agricultural technological progress
to growth was 28% during 1986 to 1990, and increased to 45% from 1995 to 2000. Total factor productivity (TFP) growth shows the relationship between growth of both outputs and inputs, calculated as a ratio of input to output. Total factor productivity (TFP) is usually used to measure technical change and efficiency improvement. Fan (1991) found that the average annual growth rate of agricultural TFP was about 2.1% per year during 1965-86, and 62% of growth was attributed to efficiency improvement from institutional change, while the remaining 38% was imputed to
technical progress. Using provincial-level production data, Lin (1992) found that all reform measures together accounted for 42% of the growth in agricultural output during the 1978–84 period, about 46% of this reform-induced output growth came from increased input use (mainly chemical fertilizer) and 49% from efficiency improvement.
　　Fan and Zhang (2002) used Törnqvist-Theil (TT) index approach, and adjusted livestock and fishery output data to measure the growth of output, input and total factor productivity of Chinese agriculture based on detailed quantity and price information, their results showed that both production and productivity grew at respectable rates during the
reform period, and the growth rate of total factor productivity in less-developed areas has been overestimated, regional inequality in rural China may be larger than that calculated from official statistics. Nin Pratt et al. (2009) using nonparametric Malmquist index method to estimate TFP of Chinese agriculture, their results showed that TFP growth was high during 1952 to 1993, average annual growth rate is 2.11 %, and growth was relatively low during 1974-1983 (1 percent) and accelerates through the 1980s and 1990s (5.6 and 4.4 percent, respectively). Their results also
showed that agricultural research contributed a lot to TFP growth in China. Hu and Huang (2008) showed their results of TFP for grain and economical crop and livestock from 1985 to 2004, the growth rate of TFP of three major grain crops was about 1.5 percent during 1985 to 1994, and increased to 2.4% during 1995 to 2004; the TFP growth rates of economical crops and livestock were up to 3.5%; and most of TFP growth were due to technology progress.
　　New seed varieties have had a dramatic impact on agricultural production. This included the dwarfrice varieties that increased rice yields per hectare by almost 50%. This was further augmented by the hybrid technologies that increased yields by another 20% and more recently the super-rice varieties that have brought yields to a potential of
12 tons per hectare. At the same time, the research also developed and promoted the hybrid maize varieties, dwarf wheat, transgenic Bt cotton and other seed technologies that improve the productivities of crops in China.
Roles of Agricultural R&D on Food Security and Poverty Alleviation
　　The objectives of the agricultural research system are broad from sustainability, food safety, nutrition, higher-quality food, to income distribution even at the expense of agricultural productivity (James et al., 2008). Many evidences from studies showed China’s agricultural research investment played critical role in achieving the goals of food security and poverty alleviation in China.
Food Security
　　Chinese scientists released an impressive number of successful varieties, for example, hybrid rice. The rapid adoption of bybrid rice in China helped solve the problem of food scarcity for many peoples. China achieved high level of selfsufficiency using very limited land. Per capita grain output increased from 319 kg in 1978 to 381 kg in
2007. Per capita meat output increased from 9 kg to 40kg. Per capita milk output increased from about 1kg to 26 kg (NBS, 2008). Huang and Rozelle (1996) showed that over half of the growth in rice yields between 1975 and 1990 can be contributed to new technology. Fan and Pardey (1997) measured nearly 20 percents of the increase in total agricultural output from 1963 to 1992 came from agricultural research. Fan et al. (2003) measured rice varietal improvement research and found that it accounted for 14 - 23% of total value of production over the last two decades in both China and Indian. Fan et al. (2003) estimated that the benefits of wheat and varietal improvement research conducted by China and CIMMYT (International Maize and Wheat Improvement Center) amounted to 1.1 billion dollars and 6.1 billion US dollars (measured in 2000 constant price) in 1982 and 1998, about 11.9 to 22.7 percents of the total output value of wheat, respectively.
Poverty Alleviation
　　China also achieved great success in alleviating poverty. The number of absolute poor people (measured by national poverty standard) in rural area has declined from 260 million in 1978 to 14.79 million in 2007. The poverty incidence declined from 33% to 1.6%. Fan et al. (2002) estimated that every RMB 10,000 yuan of investment in agricultural R&D could help 7 persons people move out of poverty at the national level, while the same money could help more than 30 persons people move out of poverty in western China. Agricultural research also contributed to a large drop in urban poverty through lower food prices because they often spent more than 60% of their income on food (Fan, Fang, and Zhang 2003). Fan et al. (2003) indicated that rice research has also helped reduce large numbers of rural poor people, every $1 million invested at IRRI in 1999, would mean that more than 800 or 15,000 rural poor people could be lifted above the poverty line in China and India respectively. Fan et al. (2003) showed that
wheat breeding research reduced the number of rural poor in China from 2.7 million in 1982 and 1.7 million in 1998, about 1.4 percent and 4 percent of total number of rural poor people in China in 1982 and 1998, respectively. Some other studies also showed that agricultural research could contribute to equality among farmers and regions (Pray et al., 2000, 2001; Huang and Rozelle 1996; Lin 1992).
IV. Sustainability, Biotechnology, and Agricultural R&D
Challenges for Meeting Future Food Needs
　　Despite the great progress in China's agricultural development, China is still facing tremendous challenges. China has the largest population with about 1.33 billion persons. Its terrain is mostly mountainous, high plateaus and deserts cover the west and plains, deltas, and hills in the east. Only 16.7 percent of the land is arable or in permanent crops, but with around nine percent of the world’s arable land and water resources per capita which is perhaps as low as one quarter of the global average, there is considerable pressure on this land and the scarce water resources (Sandrey and Edinge, 2009). Agriculture is facing a drier and warmer future due to climate change, and the limited land and water resources available.
　　Decades of rapid industrialization and urbanization have enriched the livelihood of national citizens but at the cost of severe degradation of domestic gross ecological environment, soil erosion, desertification, water pollution, excessive use of pesticide and herbicide (Qian and Tang, 2000). The cultivated land continued to shrink at a speed
of 4-5 million acres annually due to industrialization and urbanization (Ke, 2008). Land salinization affects 82 million hectares, 8.5% of total land area, while pesticide pollution affects 16 million hectares (OECD, 2005). About 27 million
hectares of agricultural land are affected by drought, mainly in the northwest and north China (Wang and Li 2004), China government has declared that the scarcity of water resources seriously restricts social economic development
and even threatens food security (Rosegrant, Cai and Cline 2002; Brown, 2000). Currently the input of fertilizers and pesticides are 210 kg and 1.5 kg per hectare, respectively. These chemicals may pollute surface water, ground water, soil and agricultural products (Liu 2003; Lu 2001). The constraints of natural resources are severe – per capita arable land and water resources are lower than the world average level, and have declined with increased urbanization. At the same time, excessive use of fertilizer and pesticides give new pressure to the environment and ecology. The safety problems surrounding food and ecology have become more serious. On the other hand, with the increasing population, urbanization and household’ income, the demands for agricultural products are rising as well. For example, Huang (2008) forecasted that, by 2050, demand for airy products would increase by six times more than today’s level, demand for aquatic products would increase by three times, and demand for vegetables and fruits would be doubled. With the openness of agricultural markets, international competition is keen. All these factors will limit the sustainable development of China’s agriculture in the future. Agricultural technological modernization and innovation are key factors in coping with the challenges of improving future productivity and keeping in line with long term sustainable growth.
　　To construct modern agriculture, China is pushing forward the industrialization of agriculture, accelerating high-tech agricultural research and development, and cultivating the core of leading industry technology, optimization and adjustment of industrial structure, improving agricultural productivity and overall efficiency, promoting agriculture and industrial technology upgrades and transferring agricultural growth from resourcedependent to innovation-driven.
Sustainability and Agricultural R&D
　　China’s Agriculture is facing a drier and warmer future due to climate change, limited land and water resources, as well as increased pressure on non-point pollution. China agricultural production has become increasingly dependent on new technologies by research, especially as agricultural land, water, and other resources become limiting factors and pollution concerns increase. A significant number of researches aimed at improving water and fertilizer use efficiency along with reducing pollution have been done in China during the past decades in order to ensure sustainable agricultural development.
　　Confronted with obstacles and challenges, the government of China has launched a series of policies to develop sustainable agriculture. Family Planning Program, a basic state policy, has caused the population to decline significantly. The project "Grain for Green" was launched in 1999. The cultivated land on schedule in the programme is "retired" from food production and shifted to forest (OECD, 2005). The cost of this program was 230 million RMB in 2000 which accounted for merely 0.11% of the total budget of agriculture sector, but this cost rise steeply to 4,232 million RMB in 2001 which accounted for around 1.72%. Investment on irrigation and harnessing projects of main rivers and lakes made a tremendous contribution to the growth of agricultural production (Huang et al., 2003). The Three Gorges Project is a gigantic, trans-century project for harnessing and developing the Yangtze River. It will enhance the middle and lower reaches' antiflood capacity and lessen the harmful effects on the ecological environment, in addition the energy generated, hydroelectrically, causes much less pollution than coal-burning power plants. According to Lohmar et al. (2003), investment in irrigation infrastructure is the most important component of agricultural infrastructure construction, which is ten times that of agricultural research investment. During the period of the ninth five-year plan, investment in water conservancy increased from 8 billion yuan in 1996 to 17.2 billion yuan in 1997 (at 1990 constant price, Ministry of Water Resources, 1999).
　　According to the MOA, 126.3 billion yuan of bond funds were invested in water conservancy works in the period 1998-2002, accounting for about two thirds of central government’s investment in agricultural infrastructure. To date, the government has spent nearly 4.48 billion yuan on the large-scale transformation of the national water-saving irrigation project (Ministry of Water Resources, 2009). Several projects were launched to control soil erosion and desertification in China, including implementing key ecological programs such as Jing-Jin Wind and Sand Sources Control Program, Graze-stopping for Grass-recovering Program, Natural Forest Protection Program, Soil
and Water Conservancy Program in Loess Plateau (Office of the Leading Group for Promoting the Sustainable Development Strategy 2008). Beginning in 2001, the national government funded the "six rural small projects", with a total investment of 28 billion yuan in 2003 (Jing, 2004). Three north shelter-belts program, probably the largest environmental program worldwide and has finished its first and second phases, was China's first major desertification control program with millions of trees protecting farmland against wind erosion, but in fact could not actually prevent the sandstorms (Kuchelmeister and Meyer, 2007). During the first phase, one of the main objectives was to motivate people to do the tree planting work (Moore and Russell, 1990). 6 million hectares of plantations were established and 8 million ha of farmland protected (Chinese Ministry of Forestry, unpublished). The expenditure is
about 72 million dollars provided by the government plus the 243 million dollars provided by provincial and local authorities (Hua et al., 1987). The second phase aims to strengthen the gains made during the first phase. 6.3 million hectares were planted and 170,000 ha were aerially seeded on schedule (Chinese Ministry of Forestry, unpublished).
　　Climate change will be another force to shape agricultural R&D in China in the future. The Huang-Huai-Hai (3H) region covers all or part of Beijing, Tianjin, Hebei, Shandong, Henan, Jiangsu and Anhui Provinces, with a total area of 350 km2. Three rivers, including the Haihe River, Huaihe River and downstream of the Yellow River flow through the 3H region. The 3H region, which is described as China’s “breadbasket”, produces over 50% percent of the wheat and oil crops, 36% of maize, and 43% of cotton in the nation. At the same time, the 3H region is already a dry region. The water amounts per capita in 3H region have less than 500 cubic meters, which is defined as the absolute scarcity level. Water withdrawals already range from more than 50% for the Huai River, to 70% for the Huang (Yellow) River and to almost 100% for Hai River basin, all of which exceed the extreme water stress level of 40% of withdrawals. In addition, groundwater overdraft is significant in the 3H region, particularly in the Haihe River Basin. The rapid population growth, socioeconomic development and ecological environment improvement would no doubt increase the water demand. Climate change would dramatically change the water supply. The water security in 3H region would become worse in the future. The extreme events such as droughts and floods will increase due to climate change. The likelihood of major floods would increase in Huai River basin because of the highly intense rainstorm. Due to the increasing consecutive dry days, the likelihood of continuous droughts would increase in Hai River basin and in the downstream of Huang River basin as well as in the north Huai River basin. There is a likely
increasing in water demand and withdrawals caused by drought during spring season in 3H region. Flood risk would be higher during summer in 3H region, especially in Huai River basin. This could therefore affect the long term capacity of grain production in 3H region and threaten the food security in the nation.
　　Climate change adaptation in the water sector’s goal is to promote the sustainable development and utilization of water resources and to enhance local capacity to reduce the vulnerability of water resources system to climate change. The adopted adaptation strategies follow these two objectives. Firstly, water resource management needs to be enhanced. In addition to strengthening the construction of dikes and key projects, China will also gradually establish a social guarantee system for flood control and disaster mitigation in the near future. Secondly, strengthen infrastructures planning and construction. China’s government will enhance the construction of river dikes and reservoirs and ensure the safety of large rivers, reservoirs and key cities, upgrade aging electromechanical equipment, and refine irrigation and drainage systems. Third, improve water resource allocation, water-saving and sea water utilization technology. Finally, raise the water efficiency of farming irrigation activities, with a goal of no increase of total water consumption for farming irrigations while producing enough food for the large Chinese population. Encourage investment on agricultural R&D and irrigation infrastructure. To ensure food self-sufficiency
under the new climate conditions, it is necessary to increase agricultural productivity enhanced investment such as R&D and irrigation infrastructure. Several particular areas in China start to encourage research and development on
drought-resistant varieties, flood-tolerant crop, heat-tolerant varieties, and CO2 technology. CO2 fertilization effect is important for China’s grain production. Advancements of technologies that improve CO2 fertilization effects are crucial in mitigating the adverse impact climate change has on agriculture.
　　Control on the safe use of pesticide and fertilizer has been recently tightened in China. In the recent decades, the Government of China has encouraged the use of nitrogen fertilizers to increase crop production due to China’s increasing concern over food security. China is the world’s largest fertilizer producer and consumer. After Japan, Holland, and South Korea, China’s farmers use more fertilizer per hectare (more than 300 kg per ha) than farmers anywhere else in the world (Huan et al., 2008). They found that, on average, farmers in China use 525 pounds of excess nitrogen fertilizer per acre annually. From 2003-2005, annual corn yields in parts of the Midwestern United States and North China were almost the same, even though Chinese farmers used six times more nitrogenous fertilizer than their American counterparts (Williams, 2005). The problem of nitrogenous fertilizer over-use also includes the imbalance of fertilizers being applied in comparison with other types of nutrients, such as phosphate and potash. Fertilizer use efficiency (FUE) was only about 30% to 40%, much lower than that of developed countries. Zhu and Chen (2002) showed that there was a significant positive linear correlation between the annual food
production and annual chemical fertilizer N (CF-N) consumption throughout 1949–1998, but the effects of fertilizer had been declining rapidly. Meanwhile, non-point pollution with traditional agricultural practices is becoming a serious issue (Zhu et al., 2006). The chemical-based intensive agriculture contributes substantially to the entry of
pollutants (nutrients, pesticide, and heavy metal) into water bodies and soils in China. To increase FUE and reduce fertilizer pollution, new types of fertilizer and innocuous treatment technology have been developed.
　　In order to guarantee long-term food security in China, agricultural practices must be sustainable. As with other agricultural technologies, chemical fertilizers must be applied in a sustainable manner to ensure future food security and maintain high levels of productivity. Many researchers have recently made advancements in developing new
techniques and integrated resource management practices which mitigate the adverse effects intensive farming has on the environment. The challenge is how to transfer those advancements to farmers. While persuading farmers to limit fertilizer usage is difficult because many still hold on to traditional opinion that higher crop yields would be obtained with the use of additional fertilizers. Over fertilization can be linked to the lack of education and extension of better farming techniques available to Chinese farmers. There are many forms of technical support available to
farmers in China that encourage good fertilizer and farming practices. Farmers typically receive education through three different channels that include: (1) the Ministry of Agriculture sending technical experts to the farmers (2) training classes offered at central county locations (3) advertisement TV ads, CDs, and free services from the local government. The most effective method is to send technical experts to educate farmers. These technical experts include researchers, trainers from the National Agriculture Technology Extension Service Centre (NATESC) of the Ministry of Agriculture, or professors from Agricultural Institutions and Universities. The most common are trainers from the NATESC and their subsidiaries at the provinces, prefectures, and counties. An important aspect of the training is soil testing. Every three to four years, MOA sends representatives to test the soil for nutrient composition. This information is then used by the technical official to relay the necessary input back to the farmers. The farmers use this information to make more informed decisions in applying fertilizers to their rotating crops (Beckman et al.
2009). In 2006, subsidized projects of soil testing and formulated fertilization were implemented in 600 key grain producing counties, and free testing and fertilization services were provided to 140 million farm households. Large scale of training on pesticide safe use techniques were conducted to farmers for reducing environment pollution caused by pesticides (Office of the Leading Group for Promoting Sustainable Development Strategy 2008).
　　Agriculture is the predominant user (about 67%) of the available freshwater resource in China. And more than 90% of agricultural water is for irrigation, but more than half (55%) of that is wasted. It is an important to develop water-saving agriculture and increase water use efficiency (WUE), especially in arid and semiarid areas. WUE is a broad concept that can be defined in many ways. For farmers and land managers, WUE is the yield of harvested crop product achieved from the water available to the crop through rainfall, irrigation and the contribution of soil water storage. Improving water management in agriculture requires an improvement in soil moisture conservation measures and a reduction in the wast of irrigation water. Water-saving is one of key research areas in China. Advanced and applicable technology & equipment of water-saving agriculture, especially irrigation-saving were developed to reduce water wastage and change the lagged irrigation ways. And significant efforts to develop dry farming techniques such as no-tillage farming, planting and conservation tillage technology and selection and evaluation drought-tolerant plant species, techniques of rain's collection and storage and water-saving, and build high efficiency dry farming technology system. However, China still has one of the lowest adoption rates of modern irrigation technology such as sprinkler irrigation, drip irrigation and micro irrigation in the world. The modern irrigation area was only about 800,000 ha, about 1.5% of irrigation area, while in Israel, German, Austria and Cyprus, the ratio of modern irrigation area were above 61%. For crop water productivity, China is close to other developing countries, at 0.8 kg grain per cubic water. This, however, is lower than 2 kg grain per cubic water in developed countries. That means crop productivity in China is only about 40% of that in developed countries. In the future, China will focus on the technology of biological, agronomic and unconventional water saving, and the innovation new material for the keeping and saving water.
　　Table 13 provides expenditure on S&T by central government on key national programs by different area. It is notable that the government started to fund environmental programs in 2006. The share of environmental program as a total expenditure on key national programs was 6.55%. This indicates the increasing importance of environment-related research in the national agenda.
China’s Investment on Agricultural Biotechnology
　　During the 1990s, China adopted a promotional policy to embrace the benefits of biotechnology. China soon became one of the world leading countries in biotechnological development. A survey of China’s plant biotechnologists in 2000 showed that China is developing the largest plant biotechnology capacity outside of North America (Huang et al., 2002). However, China’s State Council issued a new regulation on safety administration of agricultural GMOs in May 2001, followed by three legislations on the bio-safety management, trade, and labeling of GM farm products issued by the Ministry of Agriculture. Biotech scientists and industry representatives criticized China’s new regulations as too restrictive to provide the favorable environment for the development of biotechnology, while Greenpeace and environmental agencies continued to warn China of potential risks associated with GMOs. Several media had claimed that China had reversed its former enthusiastic embrace of biotechnology by imposing more restrictions. Huang et al. (2002) reviewed biotechnology development and policy in China and concluded that China was determined to be one of the world leaders in biotechnology. Chinese policymakers consider agricultural biotechnology as a strategic tool for improving national food security, raising agricultural productivity, and creating competitiveness.
　　The Chinese government is the primary biotechnology investor in China. To support education and research, both central and local governments dedicate funds to universities and institutes. The Chinese Academy of Sciences (CAS) and the National Science Foundation of China (NSFC), both funded directly by the central government, invest in research and spin-off companies. One of the most important funding programs for science and technology development in China was the National High Technology Research and Development Program of China, or the 863 Program. This Program focused largely on the commercialization of research results. The central financial appropriation in 863 programs in“Tenth Five-Year” period (2001-2005) was RMB 15 billion in total. In 2005, projects in the biotechnology and modern agriculture technology fields accounted for 29.0 % of the total 3,165
projects; while the investment in biotechnology and modern agriculture technology accounted for 18.5 % of the total 863 program. In the “Tenth Five-Year Plan” period of the 863 program, the total investment in biotech was RMB 3.2 billion, four times the amount in the “Ninth Five-Year Plan.” The Ministry of Science and Technology (MOST) will increase investment in the biotech field in the “Eleventh Five-Year Plan” (2006-2010) program to RMB 10 billion.
　　The Chinese government also invests in quasiventure capital companies, such as Shanghai Venture Capital, to support start-up and growth companies. One third of investment in Chinese pharmaceutical R&D comes from the government. The government also helps attract capital from the private sector into life sciences. This is accomplished through tax incentives, preferential treatment, right of first refusal agreements on technologies from institutes and universities, and a number of other means. Local governments and high-tech parks play a significant role in attracting investment through such mechanisms as matching investments, marketing campaigns aimed at foreign investors, and influencing stateowned enterprises to commit resources to biotechnology. While investment amounts may seem small compared with North American and European investments in life sciences, they represent a significant commitment of resources for the Chinese government. This funding level combined with China’s low-cost environment creates conditions that allow for significant progress.
　　China’s agricultural biotechnology research has focused on commodities that China does not have a comparative advantage. Since the mid-1980s, cotton, rice, wheat, maize, soybean, potato, and rapeseeds have been listed as priority crops for biotechnology funding. This implies that China targets its GMO products at the domestic market. China appeared to have a clear agenda on improving food security in China through advances in biotechnology. Much funding has been targeted to develop drought-resistant and other stress tolerant varieties. This also suggests that China’s biotechnology research also gears towards the needs of small farmers in the vulnerable regions. At the same time, China is still struggling with issues of environmental and consumer safety. Bio-safety management capacity has not been improved as much as its research capacity in China. China has been cautious in commercializing GM varieties. So far, several varieties of GM insect-resistant cotton (Bt cotton) are the only transgenic crops accepted by regulatory authorities to have been widely planted on farms. The near-standstill in approvals has coincided with growing opposition to GM technology in some parts of the world. Laboratory research has continued with hundreds of crop varieties receiving approval for controlled environmental release trials since 1997 (Karplus and Deng 2008). One of the most prominent candidates in trials has been insect-resistant and blight-resistant GM rice (Gulati, Chen, and Shreedhar 2010). On 27 November 2009, China's Ministry of Agriculture (MOA) granted two biosafety certificates approving biotech Bt rice for production application (from 17 August 2009 to 17
August 2014) for Transgenic Bt rice ‘Huahui 1’ and Transgenic Bt rice ‘Bt Sanyou 63’. China’s decision has been considered as momentous by many, as it marks the movement in biotech crop cultivation from fiber crops (like Bt cotton) to largescale food crops. Moreover the potential for Bt rice cultivation in China is immense with an estimated 110 million rice households envisioned to benefit directly from this technology (apart from China's 1.3 billion rice consumers). However, release of the news has encountered much debate in China.
　　The issue of food safety became a core topic of policy making. As first emerged in 1993, the genetically modified food, brought in by biotechnology and other advanced plant and animal breeding and crop technology, aroused great dispute and changed our vision to the future (Johnson, 1999). The Agricultural GMO safety regulation was passed/amended and implemented in May, 2001(Various Chinese Government Sources). Legislation work has since been launched for the prevention and control of pollution related to animal farming (Office of the Leading Group for Promoting Sustainable Development Strategy 2008). In 2002, a new regulation was launched to label GM food to
protect consumers' "right to know". Despite of abundant references and research related to GMO, obvious evidence to what extent the consumers' concerns involved in policy-making and channel to deliver consumer perception to policy maker is deficient, and the information about GMO among citizens remains limited. According to Yan Hu et al
(2008), in the case of Beijing and Shanghai, the result of an investigation showed that the majorchannel for consumers to obtain information of GM food is through broadcast/tv, newspaper and internet. Nearly 87.7% of consumers lack information on GM food. 66.8% of consumers are not aware of their consumption of GM food. About
49.5% of consumers can accept GM food while the others not. Another investigation held in Wuhan, capital of Hubei Province, showed that 80% of consumers acknowledge the importance of labeling GM food (Liu et al., 2005). Though
labeling GM food is guaranteed by regulations, about 47.36% respondents of an investigation held in 2007 in Beijing don't know that it is, and about 46.19% respondents can't recognize the GMO label, quite close to the result of the same survey when conducted in 2004 (Wang et al.,2008).
　　Although China is one of the world's largest producers and consumers of genetically modified (GM) crops and derived food products, little is known about the level of Chinese consumer awareness, understanding and acceptance of GM food. Initially, China pursued relatively aggressive policies for biotechnological development, but in recent years, the central government has become more sensitive to the potential environmental risks of transgenic food crops. To protect domestic biotech industries, the state plays a critical role in the politics of biotechnology, and does not allow GM food to become a prominent public issue. This contribution reports on a survey of 1,000 urban
respondents. It demonstrates that most consumers lack even the most basic understanding of biotechnology and its potential risks. The majority of the respondents (60 per cent) were either unwilling to consume GM food or were
neutral about the idea, but when given neutrally‐worded information about potential GM food allergenicity, their willingness to buy dropped sharply. This might point to future scenarios of consumer resistance against GM food as has happened in European Union member states. This effect demonstrates the malleability of the Chinese consumer in a context of limited understanding and inadequate access to information. As international media, reports of public opinion on GM crops increasingly reach Chinese citizens through open media channels, the demand for evidence of the safety of MG crops, as well as information on the technology can be expected to rise. So far, compared to other countries in the world, domestic consumer attitudes towards GM crops have not played much role in shaping China’s approach to bio-safety regulation (Karplus and Deng, 2008).
V. Reforms and Continued Challenges of China’s Agricultural R&D System
　　During the ten-year “Cultural Revolution” from 1966-76, Chinese agricultural R&D system was almost totally destroyed. In accordance with reforms elsewhere in the economy, a series of science and technological policies have been adopted to re-establish China’s agricultural R&D system and enhance its performance. According to the degree and direction of reform measures, reforms can be divided into five phases (Zhang and Zhao 2009, Zhang 2009).
　　Re-establishing Agricultural R&D System 1978-84. The primary task was to restore agricultural R&D system which was largely destroyed during Cultural Revolution. In March, 1978, party leaders agreed to restore a system of Chinese Academy of Agricultural Science and Chinese Academy of Forestry Science. National Congress on Science and technology passed“1978-85 National Development Plan for Science and Technology” in March, 1978. In that plan, it emphasized to restore four-level agricultural research system. The MOA released the “1978-85
National Development Plan for Agricultural and Livestock Science and Technology”, which mapped out the detailed restoration plan for establishing an agricultural R&D system in China. The key accomplishment of this period was the quick reestablishment of the agricultural S&T system. However, there were also many challenges such as the heavy involvement of government agencies, lack of coordination among various institutes, lack of incentive for good
research, lack of funding, and very low rate of commercialization. To address those challenges, small scale pilot reforms of agricultural R&D system were also experimented.
　　Initiating National Reforms of Agricultural R&D System 1985-1991. In order to meet the new demand such as commercialization and specialization of agricultural production resulted from rural reforms, it called for reforming China’s agricultural R&D system. In January 1985, National Committee of Science and Technology (NCST) released “China’s Science Policy - Agriculture”. The document defined key directions of agricultural science policy in China for the next ten years. In March 1985, the Central Party Committee released “Decision on Reforming
Science and Technology System” and signified that China entered a new phase of reforming national agricultural S&T system. The focus was to reform the funding mechanism, adjust research direction, form research enterprises, and allow for retaining profit for reinvestment in research. During the period, a number of national programs were initiated to encourage the smooth reform of agricultural S&T system, including Spark Program in 1985, Harvest Program in 1987, High Tech Research Program (863 Program), Key Technology Outreach Program, Pan Deng
Program, and National Natural Science Foundation.
　　Deepening Reforms of Agricultural R&D System 1992-1998. Agriculture was in transition to a modern industry with high yield, high quality, and high efficiency. In June, 1992, the MOA released “Decision on Further Strengthening Role of Agricultural Science and Technology”. In February 1994, National Science Committee and
National System Reform Committee jointly released “Further Reforming Science and Technology System: Key Implementation Measures”. In January 1998, National Science Committee released “China Agricultural Science
and Technology Policy”. It covered 20 disciplines and eight national agricultural districts, which represented the most comprehensive national policy on science and technology ever. In particular, some R&D organizations were
integrated into medium and large enterprises. In July, 2007, the first national agricultural S&T demonstration was established at Yanglin, Shaanxi, and was jointly supported by both private and public funds.
　　During this period of reform, one of two significant developments was the establishment of a patent system. China’s centrally planned economic system did not have a patent system. There was a lack of incentive for local innovation. Furthermore, extensive reverse engineering of foreign technology occurred without permission and this
caused technical and legal problems. Following market reforms and commercialization, the Chinese Government started to establish a patent system. This has become the cornerstone of science and technology development in China, and has enabled China to participate in the world’s intellectual property market. In 1983, China enacted its patent law. This was the first step in establishing a legal basis for ownership of intellectual property. It signed the Paris International Property Rights Treaty in 1984. This was followed by laws on technology contracts, the first of which came into force in 1987. However, the law was framed in very general terms and did little to clarify the rights and responsibilities of parties to the contract. China’s patent law was strengthened in 1992. Copyright law was also gradually implemented. China acceded to the Berne Convention in 1993. The rapid increase in the number of patents granted reflects the change in policy. In 1985, only 138 patents were granted and, of these, just 40 were for inventions, with the balance being for utility/applied and design patents. The number of patents granted in 2002
totaled 132,399, including 21,473 invention patents. By 2001, China ranked 10th in the world in terms of invention patents granted. Given the fact that China’s patent system became operational only in 1985, growth in patenting has been rapid. China’s patent structure is similar to that of other low-income NICs. The percentage of invention patents is relatively small with the majority of patents being utility model and design patents. This pattern indicates that China’s innovative capability (especially in high technology areas) is still limited and its patents mostly relate
to the absorption and adaptation of imported new technology. The World Bank has doubted whether China can enforce its intellectual property rights legislation. Whether such concern was justified is difficult to say. In any case, China established an Intellectual Property Rights Court in 1994 to help enforce its legislation.
　　The second significant development was the establishment of technology market in China. Under the pre-reform system, R&D results had no exchange value and were normally transferred from one research unit to another, or to the production factory, by the relevant administrative bureau at zero cost to the recipient. Technology was therefore a ‘free good’. Consequently, there was neither incentive for innovation nor efficient transfer or diffusion between research institutes and the R&D users. The establishment of a unified open technology market has been seen as a
significant shift in China’s S&T system, helping to break vertical and horizontal institutional barriers and accelerate technology transfer and diffusion. The departments administering S&T activities now have greater responsibilities to see that funds are better used and managed. Various R&D projects are funded in different ways and sources of
funding have been expanded. Funds provided for some research projects now require repayment. Attempts have been made to remove the barriers between departments and regions, introduce competition into the research system, and focus funding support on those who can best carry out the required work. According to available data,
China’s trade in technology has grown very rapidly since the mid-1980s. In 1985, it accounted for 230 million yuan, increasing to 8,146 million yuan in 1989. There was further expansion in the 1990s. After more than one and a half decades of development, the value of the annual technology trade reached 88.4 billion yuan (see Table 8) in 2000. The number of technology transactions increased from 9,932 in 1985 to 237,043 in 2002.
　　Before 1999, the reforms largely focused on two areas. The first was the introduction of a more competitive system in distributing research funds. The second were policies encouraging research institutes to commercialize the research, allowing them to retain profits and reinvest in their research work. Rozelle and Rosegrant (1997) and Fan et al. (2005) assessed the impact of the reforms, and concluded that competitive system helped allocate more funds to the most productive scholars and institutes. Although these reforms improved the efficiency of agricultural R&D system, there are challenges that called for further reform.
　　Enhancing Innovativeness of Agricultural R&D 1999-2006. The focuses were on enhancing innovative capacity, increasing rate of commercialization, and establishing large scale agricultural high-tech garden. In August, 1999, the
State Council released “Decision on Strengthening Technological Innovation, High-tech Development, and Industrialization”. In July, 2001, MOST released “Guideline for Agricultural S&T Garden”. In April 2001, the State Council released“Development Plan for Agricultural S&T 2001- 2010”. Agricultural S&T programs were focused
on providing assistance to adjust agricultural and rural structure, increase agricultural net revenue, improve ecologic environment, and increase international competitiveness.
　　New Push for Reform Post-2007. To build modern agriculture, a modern agricultural S&T system is essential. The focuses of reforms are further promoting innovativeness of agricultural S&T, strengthening construction of agricultural S&T garden, and establishing modern agricultural S&T system. In May 2007, the State Council released “Eleven Fifth Plan for the Development of National Agricultural S&T Garden”. In 2007, the Ministry of Agriculture and Ministry of Finance developed a pilot Modern Agricultural Industry R&D System, where rice, maize, wheat, bean, cotton, orange, apple, pig and cow were selected as trials. In January 2008, the MOA released a document to speed up the development of modern agricultural industry technology system. By the end of 2008, a total of 50 agricultural products have started to build the modern agricultural industry R&D system, include 34 crops, 11 livestock and 5 fishery products. The central government invested 967.5 million yuan to support the system in 2008. The construction of a modern agricultural S&T industry system links research institutes, universities, extension agencies, and industry partners together to foster better publicprivate partnership for innovation.
　　At the same time, a more focused, efficient, and effective research system is urgently needed to achieve the multiple goals of agricultural growth, food security, and poverty reduction. The commercial activities, which are not always compatible with these goals, need to be hived off from the public research agenda. Fan et al. (2005) and Huang et al. (2004) suggest the following reforms to the existing agricultural R&D system. First, to avoid overstaff, all research and administrative position should be created on the basis of need, and all positions should be filled through public announcements and open competition. Redundant staff should be encouraged to retire and provided assistance in seeking employment elsewhere. Incentive structures for researchers should be performance based. Promotion and annual salary increases should be based on a more rigorous performance assessment. Second, the reform should be considered in the larger social and financial context. For example, the reform could be tied with the ongoing pension system reform. The Bureau for Retirees independent of the institute could be established to solve the problem of the overload issue faced by the research institute. Third, re-organizing the structure of agricultural research based upon agro-ecological or other relevant considerations to avoid duplication and increase efficiency. Improve of the incentive system and encourage more scientist and engineers go to the rural area, and train the rural local research staffs to enhance their research ability, and promote new technology into productivity.
　　After three decades of significant reform in China’s S&T system, considerable progress has been made. China’s S&T and R&D personnel numbers have increased, a more efficient distribution pattern of resources has emerged, funding sources have been diversified, its volume of R&D output has considerably increased, and R&D
results have been more efficiently utilized. However, China’s average R&D outlay from the personnel and financial perspective is still lower than in developed countries. In recent years, rapid overall economic growth has been due largely to economic reform, capital accumulation (from domestic saving and foreign borrowing), labor (released from the rural area), and the inflow of foreign technology, with some contribution from indigenous technology. Indigenous technology has not been the main source of economic growth, but China’s S&T efforts have probably been very important in complementing the successful transfer of foreign technologies (Huang et al. 2003).
Challenges of Agricultural R&D System and Investment
　　Despite the progress achieved, problems remain in China’s agricultural R&D system and many new challenges have emerged. Innovative capacity is limited in the country, while adoption rate of advanced technology is quite low. A significant problem is disjointed and segmented system of managing agricultural R&D in the country.
Multiple ministries are involved with administrating R&D at the central government with three level of administrative system at nation, province, and prefecture. This has caused repetition in funding and confusion in coordination. Like in many other countries, achieving an appropriate balance between market and government for managing agricultural R&D remains a major problem in China. Seven challenges are highlighted below.
　　Low Innovative Capability. Though the numbers of patents has increased quickly, the percentage of invention patents is relatively small with the majority of patents being utility model and design patents. This pattern indicates that China’s innovative capability is still limited and its patents mostly relate to the absorption and adaptation of imported new technology. No agriculture-specific patent data exist but a general picture appears to be applicable to agricultural R&D.
　　Low Proportion of Basic Research. Basic research appears to have been neglected despite efforts made to encourage it. In 2007, 11% of general R&D expenditure was spent on basic research, 33% on applied research, and 56% on development. The situation in agricultural R&D was even worse. In 2007, only 6% of general R&D expenditure was spent on basic research, 24% on applied research, and 70% on development. This certainly would limit innovative capability of China’s agricultural R&D system.
　　Low Share of Private Research. Private agricultural R&D has increased dramatically in China in the recent years, but its share of public agricultural R&D expenditure is still low at 22% in 2006. Yet, in most developed nations, private agricultural R&D counts for more than 50% of total public R&D expenditure. Though agricultural R&D has a public goods nature at large, it does not mean that private agricultural enterprises cannot be the main player of agricultural R&D system.
　　Low Commercialization. There were more than 6,000 agricultural scientific and technical fruits developed every year, but few of them were applied to production, and few of them achieved profits. The rate of transformation was only about 30%-40%, which was much lower than for developed countries (65%-85%). The contribution share of agricultural technology progress was about 42% in China, while at the same time up to 60～80 % in developed countries. More than half of agricultural scientific and technical fruits were never transferred to productivity. This is not good for the sustainable development (Qiao and Wang, 2007). A poor intellectual property rights system and fragmented technology markets keep agricultural technologies from prospering. This suggests that China’s environment for technology diffusion is not favorable and existing transfer mechanism is not effective. However, it is also true that science and technology markets can work very imperfectly in Western economies, or are absent in some cases because of market failures. Much R&D is conducted in-house by companies rather than contracted out.
　　Decentralization and Duplication. Each province has its own research teams and provides the funds to their research organizations. But the environment and agricultural production are very similar among nearby provinces, so similar duplications exist in almost all provinces in China (Fan et al., 2006). As constrained by the capability of local fiscal situation, the scales of research are often relatively small. All these factors lowered the research efficiency. This is an obstacle to solving the large and significant technological problems faced by China’s agriculture. The current system adopted in R&D has led to some negative shortterm behavior; for example, an emphasis on cash flow rather than on research or fundamental commercialization of research results. The pressure on research units to generate their own income has created a tendency to ignore state assigned projects in favor of independently contracted projects with other companies, especially private or collective ones. The institutes receive most of their income from sales of their own innovative new products rather than from the commercial sale of R&D results. The latter is very
difficult in China’s technology market and domestically generated technology is always underpriced. The economic benefits of many R&D units are, in fact, linked to production outcomes rather than to R&D achievements.
　　Crop Dominated Priority. The economic structure has changed dramatically during past years, but the structure of research funds among agricultural sub-sector did not change much at all. Especially the research investment in the livestock and fish sectors was comparatively much lower. The result of the rural household survey showed that farmers’ demands for the planting technology of vegetable and fruits, breeding technology of livestock and fish, good quality varieties, planting technology of field crop, technology of the prevention and control of diseases and insect pests technology of labor saving and fertilizer etc increased rapidly from 1990s (Hu and Huang, 2007). But it is difficult for farmers to get the technologies what they want. At the same time, the technology of high value added agricultural product processing also demanded by larger farmers, they also want to share the benefits of high value added agricultural products. The relationship of research projects and technology demand were not close. Research work could not satisfy consumer demand.
　　Excessive Competition and Low Efficiency. The introduction of competition stimulated researchers’activities, and improved the efficient of R&D investment. Too much competition also had many negative effects and lowered overall efficiency. Researchers were busy applying for projects and focusing on reports and papers, and pursued short-run profits. Researchers may undertake too many projects and have no time to finish them to
their best abilities, but other researchers obtain few projects and have little to do. All these factors impact research efficiency and long run development.
　　Too Many Retirees and Overburden. The number of retiree has increased fast. It has become a heavy burden to the institutions. The current staff could be required to contribute a share of their salary to a retirement account. This will decrease the incentive for researchers and effect the efficiency of the current research.
Key Initiatives on Advancing Agricultural Technology
　　With population growth, resource constraints, people’s life quality improvement and the rural labor force transfer, the higher agricultural production capacity will be required to satisfy the increasing demand for agricultural products. In order to ensure the supply of agricultural products, China must rely on scientific and technological innovation, develop bio-genetic and innovate in planting and breeding model to enhance land productivity substantially and provide technology support for the development of modern agriculture. It is urgent to develop key agricultural technologies to break through the "bottleneck" to protect national food security and consolidate and
enhance the comprehensive agricultural production capacity.
　　The challenges mentioned could threaten the future of China’s agricultural R&D system. China needs to push forward the reforms of its agricultural R&D system further to address the investment gap on agricultural R&D. China aims to build efficient national agricultural technology system by 2020. A group of scientists from the Chinese Academy of Agricultural Science and Chinese Academy of Science calls for policy and regulatory measures to be adopted to ensure development of modern agricultural technology system. Key measures recommended are:
　　1) Increase investment on agricultural R&D and Improve Structure of agricultural R&D investment. In 2010, government’s expenditure on agricultural R&D is expected to be doubled to that of 2009. Agricultural R&D investment should increase fast in the future. The intensity of agricultural R&D should be up to above 1.5% by 2020 and 2% by 2050 to strengthen agricultural production capacity. It isequally important to optimize allocation of agricultural R&D by region, by variety, by type, and by sector. Increasing spending is needed on basic agricultural research, key variety development, and livestock.
　　2) Further Reform of Agricultural R&D System Key is to create an enabling environment for an improved intellectual property rights system and technology markets. This would be crucial to enhance agricultural innovative capability, increase adoption of agricultural technologies, and promote private R&D investment. The Chinese government should invest in quasi-venture capital companies to support start-up and growth companies. It can also take measures to increase numbers of elite scientists and groups and improve innovation capacity.
　　3) Develop Technology to Protect Agriculture Ecology China’s Agriculture is facing a drier and warmer future due to climate change, limited land and water resources, and increased pressure on non-point pollution. The key technologies include environment-friendly fertilizers and pesticides, precise operating equipment, the utilization residues of agriculture and forestry, as well as the technologies of agricultural environment quality protection and improvement. Solar power and biogas from agricultural residuals and animal waste are recognized as being able to solve many of the problems associated with energy provision in China.
VII. Implications for Other Developing Countries
　　China’s achievement has been remarkable since the reform started in 1978. The rural sector became an internationally competitive in its own right, while still supplying surplus labor to the manufacturing sectors. With less than 9% of global land, China has succeeded in providing food security for 20% of the global population and lifted its people out of poverty. The policy reform and infrastructure and technology development are considered to be three key factors in driving this remarkable achievement in China. More and more, technology is considered to be a long term driving force for further growth. The crucial question is – can what has worked for China be applicable to Africa? China’s experience shows that agricultural R&D should be the main engine for agricultural productivity growth, poverty alleviation, and food security. Public agricultural R&D has played critical roles in generating technologies to serve the needs of millions of farmers. It is important to reform and modernize the country’s agricultural R&D system in order to improve its performance. While reforms are needed, increasing financial support to agricultural R&D system is a necessary condition for the success. The adoption of new varieties with increased use of other inputs such as fertilizer, pesticides, and water is essential for China’s success. Great efforts on the research, demonstration and extension of water resource management, rational allocation of water resources and water-saving irrigation technologies have been made in many arid provinces/regions, and a series of efficient measures on these issues have been worked out. All these measures and technologies have been widely applied in agriculture, forestry and animal husbandry productions, and great social and economic benefits have been gained, which made thus great contribution to the development of arid areas in the world. What is essential as next step is to identify what are appropriate agricultural technologies be transferred from China to other developing nations and what are the best way for this technology transfer.
　　A few other lessons and experiences that may also have implications to the other countries are: 1) agricultural R&D system reform may not be successful if reforms do not take place in the rest of the economy; 2) not all research institutes can be commercialized; 3) marketing and management skills of academics are required for successful commercialization; 4) public investment on agricultural R&D is crucial; 5) encouraging private agricultural R&D is essential for the future health development of R&D sector, and 5) linking research with the market through the whole chain is a new direction to take in the future to modernize the agricultural R&D system.

Appendix Method and Data Issue
　　This study is largely based on the secondary information sources supplemented with unstructured interviews with key researchers and policy makers where the secondary sources are lacking. A significant amount of literature has been reviewed to provide a comprehensive overview of China’s agricultural science and research system as well as to establish a link between agricultural R&D and productivity growth in China. Several interviews were
conducted to gather a better understanding of reforms of China’s agricultural R&D, interactions between agricultural R&D and sustainable development, as well as international agricultural cooperation.
　　Many published works on China’s agricultural R&D system used different sources of data which created a challenge for comparisons across the studies. Moreover, as most published works reported old data, key agricultural R&D information in this report has been updated to the year 2007 as the data permits. As recognized in the literature, data is a challenging issue on understanding agricultural R&D in China. Several ministries provide funding and
oversight of agricultural science and research in China. Each publishes statistical yearbooks and information related to agricultural R&D. For example, the Ministry of Science and Technology publishes “China Statistical Yearbook on Science and Technology (CSYST)”, the Ministry of Agriculture publishes “National Statistics of Agricultural Science and Technology (NSAST)”, and the Ministry of Education publishes “University of Science and Technology Statistics (USTS)”. The scope and definitions of term R&D used in those three publications are often different with each other and also changed over time. CSYST mainly records the expenditure on and personnel engaged in science and technology activity, this includes R&D institutions under various government departments and institutes(including both the CAAS and CAS), large and medium-sized enterprises and universities. NSAST only includes research institutes under the Ministry of Agriculture and research institutes, while those under the Forestry Bureau are excluded. USTS records staff, expenditure and revenue, S&T projects and international cooperation for the
universities under the Ministry of Education. Both NSAST and USTS do not record any information on private R&D, while CSYST contains limited R&D information on medium and large enterprises of food processing in certain years.
　　To capture the scale, structure, and trends of agricultural R&D, it is necessary to combine all sources of data about public research institutes, universities and enterprise or private agricultural research. To have some understanding on the specific allocation of agricultural R&D among sub-sectors, attempts were made to collect R&D
information related to crop, forestry, animal husbandry, fishery, water conservation, agricultural service, and food processing. A unique feature is that the availability of CSYST allows us to report R&D on food processing. Food processing includes not only primary food processing but also processing of food for consumer ready products. In the literature, some analysts treat R&D revenue as investment (Huang et al., 2003; Hu et al., 2007), while other
use expenditures as investment (Fan et al., 1991; Fan et al., 2006). As this paper focuses on the role of agricultural R&D to enhance productivity, the actual expenditures on agricultural R&D activities are used as agricultural research investment. These expenditure items include personnel expenditure, assets purchase, apparatus purchase of scientific research and other daily expenditure.

 Reference
　　Alston, Julian M. & Beddow, Jason M. & Pardey, Philip G., 2009. "Mendel versus Malthus: Research, Productivity and Food Prices in the Long Run," Staff Papers 53400, University of Minnesota, Department of Applied Economics.
　　Beckman, C., K. Rohm, and L. Bao, 2009, Fertilizer, USDA, GAIN Report Number: CH9082.
　　Beintema, N. M., and G. J. Stads. 2008, Diversity in Agricultural Research Resources in the Asia-Pacific Region, Washington, D.C., and Bangkok: International Food Policy Research Institute and Asia Pacific Association of Agricultural Research Institutions.
　　Brown, L. 2000. Falling Water Tables in China May Soon Raise Food Prices Everywhere. World Watch Institute. Earth Policy Alerts. Accessed March 2002.
　　Bruce Ston, 1988, Developments in Agricultural Technology, The China Quarterly, No. 116 (Dec., 1988), pp. 767-822, Cambridge University Press on behalf of the School of Oriental and African Studies.
　　Chinese Academy of Science (CAS), 2009. Blueprint toward 2050 for Developing Agricultural Science and Technology. CAS Strategic Group on Agriculture.
　　Chen, S. and Ravallion, M. (2009) ‘The impact of the global financial crisis on the world’s poorest’
(http://tinyurl.com/ccagl8).
　　DFID, Outcomes of the G20 meeting, 29 September 2009, http://www.dfid.gov.uk/Media-Room/News-
Stories/2009/Outcomes-of-the-G20-meeting/.
　　Fan Shengeng, Qian Keming, 2005, Agricultural Research and Poverty, China Agriculture Press (In Chinese).
　　Fan, S, Qian K., Zhang, X., 2006, China An Unfinished Reform Agenda in Agricultural R&D in the developing world too little, too late? ed. P.G. Pardey, Julian M. Alston, and Roley R. Piggott. Washington, DC: International Food Policy Research Institute, pp.29-63.

　　Fan, S. 1991. Effects of technological change and institutional reform on production growth in Chinese agriculture. American Journal of Agricultural Economics 73(2): 266-75.
　　Fan, S. 2000. “Research Investment and the Economic Return to Chinese Agricultural Research”, Journal of Productivity Analysis 14: 163-182.
　　Fan, S. G., and P. G. Pardey. 1997. Research, productivity, and output growth in Chinese agriculture. Journal of Development Economics 53 (1): 115-137.
　　Fan, S. G., C. Chan-Kang, K. M. Qian, and K. Krishnaiah. 2005. National and international agricultural research and rural poverty: the case of rice research in India and China. Agricultural Economics 33 (3): 369-379.
　　Fan, S., 1997. How fast have China's agricultural production and productivity really been growing? new measurement and evidence," EPTD discussion papers 30, International Food Policy Research Institute (IFPRI).
　　Fan, S., and X. Zhang. 2002. Production and productivity growth in Chinese agriculture: New national and regional measures. Economic Development and Cultural Change 50 (4): 819–838.
　　Fan, S., C. Fang, and X. Zhang. 2003. Agricultural research and urban poverty: The case of China.
　　Fan, S., Effects of Technological Change and Institutional Reform on Production Growth in Chinese Agriculture, American Journal of Agricultural Economics, 1991,Vol.73, pp.266-275.
　　Fan, S., L. Zhang, and X. Zhang. 2000. Growth and poverty in rural China: The role of public investment. Environment and Production Technology Division Discussion Paper 66.Washington, D.C.: International Food Policy Research Institute.
　　Fan, Shenggen; Chan-Kang, Connie; Qian, Keming; Krishnaiah, K, 2003, National and international agricultural research and rural poverty: the case of rice in India and China.
　　Gulati, A., K. Chen, and G. Shreedhar. 2010. Feeding the Dragon and the Elephant: Can India Take a Leaf out of China’s Rice Fields, International Food Policy research Institute, forthcoming.
　　Hu Rui-fa LIANG qin HUANG Ji-kun, Private Agricultural Research Investments in China: Current Situation and Past Trend, China Soft Science [J], vol 7, 2009.
　　Hu Ruifa, Shi Kuangyu, Cui Yongwei, Huang Jikun, Change in China's Agricultural Research Investment and Its International Comparison [J], China Soft Science, vol 2, 2007.
　　Hu Ruifa，Shi Kuanyu，Cui Yongwei，Huang Jikun, Change in China’s Agricultural Research Investment and Its International Comparison,P53-65,China Soft Science[J], vol 2,2007.
　　Hua Zhuzhao, Fu Maoyi, Dhanarajan G., and Sastry CB, 1987, Agroforestry in China - An Overview. Paper Presented at IUFRO Workshop on Agroforestry for Rural Needs. February. New Delhi, India.
　　Huang,C., C. Amorim, M. Sprinoglio, B. Gouveia, and A. Medina. Organization, Program, and Structure: An Analysis of the Chinese Innovation Policy Framework. Conference on the Emergence of New Knowledge Systems in China and Their Global Interaction, September 29th and 30th, 2003 in Lund, Sweden.
　　Huang, J. 1997. Agricultural Policy, Development, and Food Security in China: A Report Submitted to FAO. Beijing, China: Center for Chinese Agricultural Policy.
　　Huang, J., and S. Rozelle. 1996. Technological change: Rediscovering the engine of productivity growth in China's rural economy. Journal of Development Economics 49: 337-69.
　　Huang J.K, Q., S. Rozelle, H. Ni and N. Li. 2003. Impacts of Agricultural Trade and Related Reforms on Domestic Food Security in China. A Report Submitted to FAO, Rome.
　　Huang J. K. ,R.F. Hu, and S. Rozelle, 2004. China’s Agricultural Research System and Reforms: Challenges and Implications for Developing Countries, Asian Journal of Agriculture and Development, Vol. 1, No.1.
　　Huang, J. K. 2008. China’s Agriculture toward 2050: A Report Submitted to IAASTD. Beijing: Center for Chinese Agricultural Policy, Chinese Academy of Science.
　　Huan J., R. Hu, J. Cao, and Scott Rozelle，2008，Journal of Soil and Water Conservation, VOl. 63, NO. 5.

　　James J.S., Pardey, P. G. and J.M. Alston, 2008. Agricultural R&D Policy: A Tragedy of the International Commons. Staff Papers 43094, Minneapolis: University of Minnesota, Department of Applied Economics.
　　Jing, Renqing (2004), “Speech of the Financial Minister Jing Renqing on Financial Assistance to Agriculture”, obtained from www.xinhuanet.com.
　　Johnson Brian, 1999. Genetically Modified Crops and Other Organisms: Implications for Agricultural Sustainability and Biodiversity.
　　Karplus Valerie J., Xing Wang Deng, 2008, Agricultural Biotechnology in China, Springer Science+Bussiness Media, LLC.
　　Ke Bingsheng, 2008. Some Understanding of the way of Chinese Characteristic Agricultural Modernization. China Academic Journal Electronic Publishing House. Work Research and Recommendations. Vol. 4.
　　Kuchelmeister Guido and Meyer Nils, 2007. Regional aspects - China: Desertification control in China - a formula for success? Agriculture & rural development, vol 1, p16-18.
　　Lin, J.Y. 1991. Public research resource allocation in Chinese agriculture: A test of induced technological
innovation hypotheses. Economic Development and Cultural Change 40(1): 55-73.
　　Lin, Justin Yifu, 1992. "Rural Reforms and Agricultural Growth in China," American Economic Review, 82(1): 34-51. Lin, Justin Yifu 2003 The China Miracle: Development Strategy and Economic Reform, Revised. (Hong Kong: Chinese University Press).
　　Liu Pengcheng, Chunyan Ma, Qiang Ma. 2005. Expectation of Consumers toward Genetically Modified Food Safety and Management: In Terms of Consumer Perception.
　　Liu, C. 2003. The Startling Facts of Agricultural Pollution. The News Paper of People Political Consultations. 8/4/2003. P.1 (In Chinese).
　　Lohmar, B., J. Wang, S. Rozelle, J. Huang and D. Dawe, 2003. China’s Agricultural Water Policy Reforms: Increasing Investment, Resolving Conflicts and Revising Incentives, Agricultural Information Bulletin # 782, Economic Research Service, USDA, March.
　　Lu, J. 2001. The Black Soil Degradation and Agricultural Sustainability. Acta of Water and Soil Conservations 15(2): 53-55 (In Chinese).
　　Maredia, M. K., and D. Byerlee. 2000. Efficiency of Research Investments in the Presence of International Spillovers: Wheat Research in Development Countries. Agricultural Economics 22(1): 1-16. Ministry of Agriculture, National Statistics of Agricultural Science and Technology, unpublished, 1986-2007 (In Chinese).
　　Ministry of Education, University of Science and Technology Statistics (USTS), China Statistics Press, 2008 (In Chinese).
　　National Bureau of Statistics and the Ministry of Science and Technology, China Statistical Yearbook on Science and Technology, China Statistics Press,1990-2008.
　　National Bureau statistics (NBS), 2008, China Statistical Yearbook, China Statistics press.
　　National Bureau statistics (NBS), 2009, China Statistical Yearbook, China Statistics press.
　　NinPratt, Alejandro, Bingxin Yu, & Shenggen Fan, 2008. "The total factor productivity in China and India: new measures and approaches," China Agricultural Economic Review, Emerald Group Publishing, vol. 1(1), pages 9-22, December.
　　OECD. Review of Agricultural Policies-China. OECD 2005. ISBN 92-64-01260-5.
　　OECD. Reviews of Innovation Policy China, Synthesis Report 2007.
　　Office of the Leading Group for Promoting the Sustainable Development Strategy, P. R. China. 2008, Review Sustainable Development in China- Agriculture, Rural Development, Land, Drought and Desertification. April.
　　Pardey, P. G., J. M. Alston, and R. R. Piggott, eds. 2006. Agricultural R&D in the Developing World: Too little, Too late. Washington, D. C.: International Food Policy Research Institute.
　　Pray, E. Carl, 2001. Public-private sector linkages in research and development: Biotechnology and the seed industry in Brazil, China and India. American Journal of Agricultural Economics 83(3), 742-747.
　　Pray, E.Carl, Ma, D., Huang, J., & Qiao, F. (2000, April). Impact of Bt cotton in China. Paper presented at the Agricultural Economics Society Annual Conference, Manchester, UK.
　　Pray, E.Carl & Keith O. Fuglie. Private Investment in Agricultural research and international technology transfer in Asia[R].Agricultural economics report No.805, Economic research service, united states department of agriculture, 2002.
　　Pray, E.Carl. The growing role of the private sector in agricultural research, agricultural research policy in an Era of privatization [M].CABI publishing, 2002.
　　Qian Yi and Tang Xiaoyan. 2000. Environment Protection and Sustainable Development. Beijing: High Education Press.
　　Qiao Jiping, Wang Jixiu, Obstacle and Countermeasure of Agricultural Scientific and Technological Achievement Transformation [J], Sci-Tech Information Development & Economy, NO.13, VOL 17, 2007: 204～205
　　Richard Moore and Robyn Russell. The "Three Norths" Forest Protection System- China. Agroforestry Systems 10:71-88, 1990.
　　Rosegrant, W.m., X. Cai, and S. Cline. 2002. World Water and Food to 2050: Dealing with Scarcity. Washington, D.C.: International Food Policy Research Institute (IFRRI).
　　Rozelle, S. , Rosegrant, M.W. ,1997.China's past, present, and future food economy: Can China continue to meet the challenges? Food Policy 22 (3): 191-200.
　　Sandrey Ron and Edinger Hannah, 2009. The Relevance of Chinese Agricultural Technologies for African Smallholder Farmers: Agricultural Technology Research in China. Centre for Chinese Studies. University of Stellenbosch. April .
　　Shelton Garth and Paruk Farhana, 2008, "The Forum on China- Africa cooperation A strategic opportunity", Monograph 156, Institute for Security Studies, December.
　　Teng Liliang, 2009, "China's First Equity Investment to facilitate the African Continent", China- Africa Development Fund, 26th March, presentation presented at the Gordon Institute of Business Science.
　　von Braun, J., with A. Ahmed, K. Asenso-Okyere, S. Fan, A. Gulati, J. Hoddinott, R. Pandya-Lorch, M. W. Rosegrant, M. Ruel, M. Torero,T. van Rheenen, and K. von Grebmer. 2008. High food prices: The what, who, and how of proposed policy actions, IFPRI Policy Brief. Washington, D.C: International Food Policy Research Institute.
　　Williams, J. 2005，Understanding the Overuse of Chemical Fertilizer in China: A synthesis of historic trends, recent studies, and field experience.
　　Zhai, H. S and S. Liu. 2008 “A Study on Technology Supporting System to China’s Grain and Agricultural Production Capacity”, Science Publisher: Beijing.
　　Xun Wenju, 1998. China-Africa Strategic Choice to Develop Agriculture.
　　Zhang Huijie, Fan Shengeng, Qian Keming,The Role of Agribusiness Firms in Agricultural Research: The Case of China, No 19415, 2005 Annual meeting, July 24-27, Providence, RI from American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association)
　　Zhu, Z.L. and D.L. Chen, Nitrogen fertilizer use in China – Contributions to food production, impacts on the environment and best management strategies, Nutrient Cycling in Agroecosystems 63: 117–127, 2002.
　　Zhu Xigang, 1994. The Analysis of agricultural technology improvement and its contribution share during“the Seventh-Five Year”, Journal of Agrotechnical Economics, vol 2（In Chinese）.
　　Zhu Xigang, 1997, The Analysis Methods and Apply of Agrotechnical Economics [M]. Beijing: China Agriculture (In Chinese).
　　Zhu Xigang, 2002. The measure of agricultural technology improvement and its contribution share during“the Nineth-Five Year”, Journal of Issues in Agricultural Economics, vol 5 (In Chinese).
　　Zhu, Z. L., D. Norse, B. Sun. 2006. Policy for reducing Non-Point Pollution from Crop Production in China, China Environmental Science Press: Beijing.

Table 1-A Number of Agricultural Research Institutes and Staff and Research Output in China, 1986 and 2007



Source: Ministry of Agriculture, various years.
Note: The data for the national level cover Ministry of Agriculture institutes only; forestry and universities are excluded; Retiree person

Table 1-B Agricultural Research Staff in China (Unit: 1,000 persons)



Source: the numbers of Staffs in Institute and University and data of food processing in Enterprise are from China Statistical Yearbook of Science and Technology, 2008; staff
of agricultural machine from Ministry of Agriculture. Staff of Other sectors exclude food processing in Enterprise was from Hu et al (2009), survey data of 2006.

Table 2 National Science Research Program System for 11th Five-Year Plan (2006-2010)



Source: Ministry of Science and Technology

Table 3 Funds allocated by central government to the main S&T Programs (Unit: 100 million RMB)



Table 4 Funding Source of S&T Activities in R&D Institutions and Enterprises



Source: MOST and NBS, China Statistical Yearbook of Science and Technology, various years.
Note: a. food processing of enterprise

Table 5 Agricultural R&D Investment in 2007  Unit: million yuan (2005 constant)



Source: R&D investments by Institute and University and on food processing in Enterprise are from China Statistical Yearbook of Science and Technology, 2008; R&D
investment on agricultural machinery was from the Ministry of Agriculture. R&D investment of other sectors exclude food processing in Enterprise was from Hu et al (2009),
survey data of 2006 from the MOA.

Table 6 Agricultural R&D Investment of Research Institutes     Unit: million yuan (2005 constant)



Source: China Statistical Yearbook of Science and Technology, various years; R&D investment on agricultural machinery was from Ministry of Agriculture.
Note: Investment is defined as intramural Expenditures on S&T activities; food processing investment during 1986-1989 is missing. Primary agriculture includes crop, forestry,
animal husbandry, and fishery. The data of water conservancy investment during 1996-1999 are missing and calculated using water conservancy and Geological prospecting
research investment in total at the same time and the ratio of water conservancy during 2000-2002.

Table 7 Agricultural R&D Investment at the Universities    Unit: million yuan (2005 constant)

Average Annual Growth Rate (%)



Source: China Statistical Yearbook of Science and Technology, 2002-2008.
Note: data on food technology were missing during 2001-05, and the growth rate is calculated for 2007 over 2006.

Table 8 Share and Intensity of Regional Agricultural Research Investment (%)



Source: the Ministry of Agriculture.
Note:
1) The calculations exclude agricultural R&D investment by the national institute. Investment intensity is calculated as the percentage of research investment to GDP;
2) Three regions: Eastern China includes Beijing, Tianjin, Hebei,Liaoning, Shanghai, Jiangsu, Zhejiang, Fujian,Shandong, Guangdong, Guangxi, and Hainan; Central China
includes Shanxi, Inner Mongonia, Jilin, Heilongjiang, Anhui, Jiangxi, Hunan, Hubei, and Henan; Western China includes Sichuan, Chongqing, Yunnan, Guizhou, Tibet, Shaanxi,
Gansu, Ningxia, Qinghai, and Xingjiang;
3) Six regions: Northern China, including Beijing, TianJin, HeiBei, ShanXi., Inner Mongolia; Northeast, including LiaoNing, HeiLongJiang and Jilin; Easten China, including
ShangHai, JiangSu, ZheJiang, AnHui,FuJian, JiangXi and SanDong; Central South, including HeiNan, HuBei, HuNan, GuangDong,GuangXi and HaiNan; Southwest, including
SiChuan,GuiZhou, YunNan, and XiZang; Northwest, including ShannXi, GanSu, QingHai, NingXia and XinJiang.

Table 9 Intensity of R&D and Public Agricultural R&D in China, 1986-2007



Source: China Statistical Yearbook, China Statistical Yearbook of Science and Technology, various years.

Table 10 Intramural Expenditure on R&D in R&D Institutions by Industry



Expenditure(million Yuan)

Ratio (%)

Source: China Statistical Yearbook, China Statistical Yearbook of Science and Technology, various years.

Table 11 Production and Growth Rate of Major Agricultural Commodity



Source: Statistical Yearbook of China, various years.

Table 12 Expenditures on S&T by Central Government in Key National R&D Programs



Source: China Statistical Yearbook of Science and Technology, 2009.



Figure 1 Public governance of S&T and innovation in China: The institutional profile

Source: OECD, 2007.



Figure 2 R&D Intensity by Sector, 1986-2007

Source: China Statistical Yearbook of Science and Technology; China Statistical Yearbook and China
Rural Statistical Yearbook, various years.
Note: Data of value added of food processing during 1986-1995 were missing.



Figure 3 Gross Agricultural Value, Value-added and Per Capita Income

Source: China Statistical Yearbook, China Rural Statistical Yearbook, various years.



Figure 4 Gross Output Value of Agricultural Sub-sector (2005 constant)

Source: China Statistical Yearbook, various years.



Figure 5 Yields of Major Agricultural Crops, 1978-2007

Source: China Statistical Yearbook, various years.