November 5, 2001

Education and Agricultural Research Key to Reducing Rural Poverty in China

BEIJING – Investments in education, agricultural research and new roads are the most cost-effective ways to reduce rural poverty in China, according to research released today by the International Food Policy Research Institute (IFPRI) at an International Conference on Rural Investments, Growth and Poverty. The research reports, Growth, Inequality and Poverty in Rural China: The Role of Public Investments and Regional Priorities of Public Investment in Rural China: A Country-level Analysis, also conclude that spending on education significantly increases agricultural growth.

"Given the government's desire to both reduce poverty and inequality and increase food supplies, this research has important policy implications for how China should spend its limited resources," said Per Pinstrup-Andersen, director general of IFPRI and recipient of the 2001 World Food Prize.

Although China dramatically reduced rural poverty during the past two decades through increased agricultural productivity, it is becoming increasingly difficult to further reduce poverty and regional inequality, according to the reports.

"How the government can better design its policies to promote growth, while reducing poverty, is hotly debated in both academic and policy circles," noted Shenggen Fan, senior research fellow at IFPRI and the lead author of the reports. "This research provides answers to resolve that debate and offers guidance for determining priorities." In the past, government investment played a key role in both reducing rural poverty and promoting agricultural growth in China. Yet, due to ongoing economic reforms, government spending in rural areas is not likely to increase. With fewer resources available, future investments must be more cost-effective.

Tracking the effects of past government expenditures, the research finds that:

• education is the best way to reduce rural poverty and the second best way to increase agricultural growth.
• agricultural research is the best way to increase agricultural growth and the second best way to reduce poverty.
• investing in infrastructure (especially roads) is the third most important way to both increase agricultural production and reduce rural poverty.
• spending on irrigation does not have a major impact on growth and poverty reduction.

The research also stresses the importance of increasing investments in the less-developed interior regions to further reduce poverty and achieve more equitable regional development.

"Until recently, researchers and policymakers saw poverty alleviation as a secondary goal of agricultural research," said Peter Hazell, director of the Environment and Production Technology Division of IFPRI. "The primary goal was to increase food supplies by using technology. While this strategy was enormously successful, it was not sufficient to eliminate rural poverty."

With China's entry into the World Trade Organization (WTO), the rural sector will become more integrated in the global market, making poor subsistence farmers increasingly vulnerable to volatile prices for crops on which they depend for their survival. IFPRI's recent research findings provide an important road map for how public investment can be efficiently targeted to alleviate these potential adverse effects.

"International agricultural research has contributed enormously to increasing global food supplies, yet poverty remains a significant problem," said Dr. Pinstrup-Andersen. "The challenge now is to develop strategies that more explicitly address the needs of the poor."

Download a copy of this press release (PDF 108K).

Download a copy of this press release in Chinese (PDF 114K).

For more information, contact:

Shenggen Fan
+1-202/862.6577
s.fan@cgiar.org

Keming Qian
10-6891-9780
keming@mail.caas.net.cn