Major findings and recommendations
of
TRADE LIBERALIZATION IN THE
AGRICULTURE SECTOR AND THE
ENVIRONMENT
With Specific Focus on the Rice Sector in China
HU, Tao
Policy Research Center for Environment and Economy(PRCEE)
State Environmental Protection Administration (SEPA) of China
Associated with
Center for Chinese Agriculture Policy, Chinese Academy of China
School of Environmental Studies, Beijing Normal University
Outline
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Review of study
Major findings
Major recommendations
Project Background
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China
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How to adapt after WTO accession
China’s rapid industrialization and industrial policy
adjustment
EIA on trade policy
WTO New round negotiation
UNEP
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One of the six rice country studies
One of the series of trade liberalization and the
environment studies
Project Objectives
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Enhance China's understanding of the environmental, as
well as social and economic implications of implementing
the WTO AoA, with specific focus on the rice sector.
Assess the positive and negative environmental, social
and economic impacts of trade liberalization policies and
multilateral trade rule, especially the AoA, taking into
account social and economic impacts.
To provide policy recommendations to the government in
regards to how to enhance positive impacts while at the
same time how to minimize the negative impacts in order
to achieve a sustainable development, which would be
helpful for China’s new round WTO negotiations.
Logic Chain of Study
WTO accession
and trade
liberalization
Chinese
Government
Policy
The State of
Environment
Rice Trading
Production Structure
Change
The State of
Society
The State of
Economy
Research Team
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Dr. Hu Tao’s team, PRCEE of SEPA
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Prof. Huang Jikun’s team, CCAP
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Coordination
Integration
Policy recommendations
CAPSiM Model
Economic Impacts
Poverty
Chemical fertilizer and pesticide
Prof. Mao Xianqiang’s team, BNU
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Spatial and Regional Analysis
Case study in Hubei, Indicia Rice and Heilongjiang, Japonica Rice
Environmental Impacts
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Chemical fertilizer
Pesticide
GHGs
Key components of the report
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Background of the project
Trade liberalization policies of China’s
Agriculture
Rice Production and Trade in China
Integrated Assessment of Direct and Follow-up
Impacts of Trade Liberalization on the Rice
Sector
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Economic
Social
Environmental
Recommended Policies
Major findings
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Economic aspect
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Generally, there will be no big significant changes by
2010
China’s comparative advantage of Indica rice is
decreasing slightly
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As a great importer in the future from ASEAN in CAFTA
Challenging national food self-sufficiency policy
China’s comparative advantage of Japonica rice is
increasing
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As a great exporter in the future to Korea and Japan in C-K-J
Economic integration
Major findings
China’s rice growing regions and zones
Major findings
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Social aspect
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Income changes
A little bit negative income impacts of indica rice
farmers by partial equilibrium model
 Positive income impacts of Japonica rice farmers
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However, by CGE model, all would gain benefits of
rice sector liberalization
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Rice production takes only small proportion of income for
farmers
Non-farming income becoming major income source
Taxes, levies and fees in rural areas
Major findings
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Environmental aspect
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Chemical fertilizers and pesticide, especially
water resources using, are increasing with
sown area in Japonica rice regions
Chemical fertilizers and pesticide and water
resources are depending on sown area and
price changes in Indica rice regions
Major policy recommendations
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Enlarge Green Food and Organic Food production
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Improve existing China’s Environmental labeled
Product and green food, organic food
Overcome trade barriers of exporting organic food and
green food products
Agriculture negotiation of WTO, required by China’s
Permanent Mission to WTO
 CTE negotiation of WTO, myself is one of the members of
Chinese delegation
 Bilateral negotiations
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Major policy recommendations
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Strengthen rural environmental management
to internalize environmental costs
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Enhancing rural environmental governance
system
Capacity building for rural environmental
management
As a policy recommendation, the proposal
above has been submitted to Primer Minister
already as part of CCICED proposal last year
Major policy recommendations
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Gradually loosening food self-sufficiency
policy from the perspective of environmental
protection and economics
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Food self-sufficiency considerations
Social, political, national security and sector economic
aspects
 but lack of considerations of macro-economic and
environmental aspects
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Major policy recommendations
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What would happen if China is gradually loosening
food self-sufficiency policy
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Economic:
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Social
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Market would driving rice farmers moving from rice farming
towards manufacture and services industries
Better human resources allocation at macro-level
More income for farmers and reduction of rural poverty
Traditional rural culture changing
Environmental
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Reduction of chemicals and water resources
Reduction of CH4 emission as GHGs
Major policy recommendations
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What would happen if China is gradually
loosening food self-sufficiency policy
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National security
Should be concerned by Defense Ministry but
Agriculture Ministry
 How much, 95%? 85%? or even lower
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Agriculture sector interest
Subsidies to farmers
 Investments for agriculture infrastructure
 Agriculture Ministry boasting China is able to feed itself
as we launched spaceship, but is it necessary?
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Major policy recommendations
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A proposal has been sent to Research Office of
State Council this spring to let PM balance the
aspects of economic, social, environmental,
security etc
A new proposal is being prepared to submit to
next CPPCC session, similar function of Senate.
Major policy recommendations
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A proposal being sent to Research Office of
State Council this spring to let them
considering the balance between economic,
social, environmental, security etc
A new proposal is being prepared to submit to
CPPCC, similar function of Senate
Major policy recommendations
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Further study
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Methodology
Partial Equilibrium Vs General Equilibrium
 To measure impacts quantitatively by CGE model
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Economic, social and environmental impacts
on other importing and exporting countries
along the product chain of rice
Major policy recommendations
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To promote EIA on trade policy
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To put it into new revised EIA Act by NPC
To prepare a technical guideline for SEPA to
do EIA on trade policy as one of the series of
EIA guidelines
MANY THANKS!!!