I believe that given these additional land rights and a little time, more and more Chinese agricultural workers will begin to move into and create cities and suburbs - pursuing work in manufacturing, engineering, services, and business; much like how the majority of Americans and Britons did during the Industrial Revolution.

Subsistence farming is a relic from a time when people were struggling just to get enough food on the table for their families. With all the technology we’ve developed, and with all the time that we’ve had to practice using them, especially in the last 100 years, it seems totally reasonable to expect the same percentage of Chinese to be feeding everyone else.

Thanks for the comment. Several questions to chew on:

Have you been to the Midwest and South where corn, wheat, soybean and cotton farms are thousands of acres in size, and farmers dump fertilizer en masse through their irrigation systems on their crops, to encourage fast growth and harvest and maximize yields before winter hits? Said fertilizer in turn seeps back into the groundwater causing water quality problems. Fertilizer is also often overused (see related comment below).

The reason I know this is so is because I have seen it with my own eyes — my family, in the Midwest, are farmers (mainly corn) and are part of this. Thousands of other farm families there are also doing this. Does not make them bad people, in fact they are wonderful quality people; but their approach, we have learned, is not the healthiest for the environment or one the ag industry often fesses up to (just as Wall Street often does not fess up to the skeletons in its closet).

I.e., I am not sure the California Central Valley, with its more modified, gentlemanly, gentrified and strategic approach, is used en masse by family farmers and corporate farms in the Midwest, Texas, South with their cotton, soybeans, corn, wheat, and the like. At least if it is, I have not seen much of it. In fact, to this day when my bother takes me for a ride in his truck back ‘home’ when I visit, I continue to see the opposite — massive tractors and combines and trucks that are anything but “green”, large plots of land as far as the eye can see, huge amounts of (over)irrigation that cause unnecessary erosion, and the amount of fertilizer and insecticide used by folks back there on these mammoth farms …. oh my goodness, those two in particular are a huge problem.

This is one reason I am skeptical about giving China a blanket free pass that large farming will solve all of their problems and/or or that the majority of large farms in the US are automatically “environmentally friendly” albeit efficient ….

It is unfortunate that smaller farms will eventually be consolidated into larger operations. The big will continue to get bigger and the smaller farmers, unless a niche is found, will go out of business. (Exactly what is happening in the U.S.)However, the larger farms will continue to provide jobs in China’s rural areas. These operations will also help allow China to sustain its growth and further compete on the world stage with it’s agricultural products.

I am going to have to respectfully disagree that larger farming operations in the U.S. use the land less efficiently and with greater detriment to the enviroment. Many of these companies reached their status partly by becoming more efficient than their competitors. These companies stay on top by constantly finding ways to become more efficient. They are continuously improving irrigation and farming methods. All Ag operations know that the land provides and it needs to be taken care of. Farmers are the largest group of conservationists I know of. I can also safely say that the biggest push in the U.S. Ag industry today is into organics.

Concurrently, the biggest promotion in Chinese agriculture is also a massive push into organic agriculture. This is great for many purposes. It is good for the land, good for your health, and organic foods usually demand price premiums. Good idea.

This idea by China is very smart and will in turn create many business opportunities.

To maintain economic growth and hence social stability, China needs to create roughly at least 15 plus million new jobs each year. Think of that number and challenge. It is mind boggling. This land law change, will help do that, by among other things, creating a “market” for the use of ag land in China. This is a new, very big deal in China.

As I write this comment, I am in a village in China, located 1.5 hours outside of Beijing, with less than 800 people in it, and with a number of those 2 acre parcels per farmer of land surrounding the village. Trust me, it ain’t yet the California Central Valley in terms of production and efficiency.

This change in land rights, will, in fact, lead to the creation of larger more efficient farms in China. This consolidation, on its face, is a good thing for economic development and stability in China and hence, you and me and the USA.

Now the down side ….

Larger consolidated, more efficient and more corporatized farms in the USA, at least, have often led to uses of the land that are not terribly environmentally friendly. I.e., they often (not always) use boat loads of fertilizer, are often not efficient in their use of water, tilling the soil and soil erosion, etc.

I.e., given China’s current environmental mess, is this soon to arrive “more corporatized” ag production and larger, more consolidated farms a good thing for China and its environment?

Maybe yes. Maybe no. Time will tell. Check back in 50 years and we will know the answer. The one thing I can tell you for sure is that new business opportunities will be created in said environment, particularly for those with business school training, a passion for China and an interest in green development and sustainability.

See also this related post by David Wolf of the Silicon Hutong Blog, Why Land Reform is a Tech Opportunity. Said post is exactly how a savvy MBA student should be thinking about such societal challenges, and also ties in nicely with the tech commercialization class many of your took with Dr. Olsen.

Unfortunately, California is not as forward thinking, Throughout the state (and many other states I am sure) prime agricultural land is being cleared to build the unoriginal tract home communities. While it is important to support the trade industry, food should ultimately have the final say. As a non-renewable resource, fertile soil should be held in high regard and should not become the resting place of yet another concrete slab. I think Joni Mitchell had it right when she sang, “they paved paradise and put up a parking lot”. While she might not be talking about soil specifically, she foresaw the same sort of problem.

We should be taking notes on the Chinese government’s support of the farming industry, and their attempt at maintaing agricultural independence. If we keep developing real estate at the same rate, we will soon be buying our agricultural products from China. This kind of mistake is something that cannot be excused!

One last point to bring up… One potential problem with this initiative is that the agricultural production development will outpace demand for agricultural goods. One step the government could take to minimize this issue would obviously be to develop an increase demand. With much of the U.S. grain products now going to the development of biofuels such as ethanol there is a greater global demand for grain products. As China increases production they can also look to increase exports of ag products to fill this need. China has also recognized the need to develop sustainable energy technologies. A lot of research is being done on the use of biofuels and biomass within transportation and power generation, but implementation of these technologies is falling short in the U.S. and Europe because of high startup costs. These costs are lower in developing countries such as China and India which have lower labor rates and are already investing in infrastructure to keep up with their economic development.