Food and Profit: The Political Economy and Grain Market Reform in China

Reform of the grain marketing system has been among the slowest and most cautious of all the elements of China’s rural economic reform programme. Given the fundamental emphasis previously placed on grain production, this is not surprising. Since 1949, grain self-sufficiency and stable grain supplies at low prices have been among the primary goals of China’s agricultural policies. The deep-seated commitment to these aims and the fear of food instability have, inevitably, led to considerable caution on the part of government in its management of change in the grain sector. As a result, grain has been among the last of the agricultural commodities to be considered for full liberalization. This wariness was demonstrated most clearly by the stalling of grain reform in the mid-1980s. It was not until the economic uncertainties of the late 1980s were overcome, and the structural changes of the 1980s had become consolidated, that grain market reform began to move ahead again after 1991.