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As agreed broadly, technology transfer is very important for innovation in agrosectors of developing countries. An even more crucial problem is how to improve technology transfer from knowledge producers to users in the rural regions where small-scale household farming dominates. This paper explores the structure of the regional Agro-Innovation System (AIS) in rural China, which is currently evolving from linear simplicity into dynamic complexity. Based on successful case experiences, this article explores and compares four patterns of institutional innovation in regional AIS, or 'Agricultural Company plus Farmer Households' (ACFH), 'Agro-clusters', 'Farmers' Cooperations' and 'Academy-Agriculture Relations' (AAR). It concludes that innovation policy should pay more attention to the access of small farmers to information and technology. Attempts to simply duplicate policies from successful regions cannot facilitate the diffusion of experiences and good ideas. Cultural backgrounds, factor endowments and manpower, as well as the character of different agro-technologies, should be considered when making policies for improvement of technology transfer.
KEYWORDS
institutional innovation; technology transfer; AIS (agro-innovation system)
INTRODUCTION
Discussion of institutional innovation and agro-industrialization has been a hot topic of development studies in Asia, Latin America and Africa (Holloway et al. 2000; Escobal et al. 2000; Hong 2002; Huang 2000). In China, rapid growth has occurred in the agro-sector since the launch of reform and opening up policies at the end of 1970s. However, compared with the fast ascent of other industries and the whole economy, the growth rate of agro-sector is in fact quite modest. In the past two decades, the average growth rate in the first industry is 4.51%, which is less than half of 9.48% for GDP growth, 11.53% for second industry growth and 10.05% for the third industry.
Scholars attribute the lags partly to the nature of agriculture and partly to policy distortion in China: In the past five decades, the decision makers in China have squeezed farmers to get enough subsidies for manufacturing industry. (1) Fortunately, the Chinese government is now trying to correct the serious imbalance between agro- and industrial sectors. For example, the theme of 'No. 1 Document 2004' of the State Council was 'to increase the income of farmers', and 'No. 1 Document 2005' was 'to enhance the productivity of agriculture'. While urban-rural integration and urbanization are proposed (by many economists) as solutions for rural development, it is not practical to urbanize the extremely wide area of rural China in a short period. Nor is it affordable to provide direct subsidy to all peasants, which account for 70% of the population. In the near future, Chinese people will face the ineluctable problems of development of the agro-sector and rural regions.
One of the most populous countries, China has to raise 21% of the global population with 9% of the world's arable land. This country therefore is extremely short of land and water to support expansion of traditional agriculture. Scholars, whichever propositions they hold, all agree that it is time for Chinese farmers to embrace modern agriculture, instead of expanding traditional planting. In the new regime of chemical, biological and information technologies, 'Technology', 'Learning' and 'Innovation' have become key words of modern agriculture. While innovation studies have long been exploring the nature of technological innovation and institutional innovation, they mainly focused on manufacturing industry and high-tech industry.
In the dawn of the new century, some scholars began to devote themselves to the study of innovation in rural regions of developing countries. The aspiration to rapid growth and development drives the studies of agricultural innovation in Asian and African Continents (Hall et al. 2001; 2003a; 2003b; Holloway et al. 2000; Escobal et al. 2000). Chairatana (2000), for instance, explored the key actors in the Agro-Innovation System (AIS) and catalogued them into three groups, or producers, supporters and influenced institutions. Temela (2003) analyzed the weakness of linkages of AIS in Azerbaijan with graphic methods, presenting a feasible approach to implement AIS investigation and analysis. Ruttan (2002) argued that shifts in the demand for institutional innovation are induced by changes in related resource endowments and by technical changes. And institutional innovation, in the meanwhile, is the crucial reason of deviation between technology efforts and productivity growth.
In China, Lin (1993) set up a series of models to analyze the relations between institutions, technology changes and growth. Huang (2000) suggested that market mechanism be introduced to the technology extension system by setting up models for investment upon agricultural R&D activities in China.
The policy makers in China are also trying to improve local growth by indtroducing new institutions for technology transfer. However, only a few have achieved any success till now (Tu et al. 2004; Gu 2004). The ACFH, for example, is a very popular pattern in today's China, being promoted in oceans of documents and papers. Meanwhile, some new AIS patterns have also emerged according to special local backgrounds. In most cases, the original technologies, breeds and seeds are from 'outside', for the basic research and development of technology is still very weak in local research institutes. To transform the imported technology into productivity is the core of local innovation in rural regions.
In a nutshell, the innovation process of agrobusiness in rural China is eventually a process of technology acquisition, assimilation, absorption and production. In this article, the author triggers discussion of institutional innovation for technology transfer on the level of counties in China. The article employs the broad concept of institutional innovation as suggested by Ruttan (2002)--that institutional innovation includes both innovation in the structure of economic units and in the routines, norms and decision rules followed by these units. (2)
In the next section, the author will describe the changes of AIS in China in the past two decades. The third section, with case studies, introduces four patterns of institutional innovation for technology transfer in China. The similarities and differences are analyzed in section four. Both the rational fundamental and their characters are explored and compared. The article concludes with cautions to today's AIS as well as the implications for ongoing reforms in rural China.
Based on the fieldwork in three counties and one city from two provinces, the author collects data and produces cases to support this work. Case 1 is from Fufeng County in Shannxi Province, which is a typical poor western county in China, with a population of 0.45 million. Case 2 compares two neighboring counties, Laizhou County and Shouguang County, in Shandong Province, which are relatively rich counties on the eastern coast of China. Laizhou is characterized by entrepreneurship, while Shouguang is famous for its huge vegetable trade market. Their size is similar: Each has a population of around 1 million and GDP of about 13 billion yuan (or about 1.2 billion Euro). But the pathways of their growth are very different. A small village in Laizhou County in Case 3 exhibits a special collective cooperation. Case 4 is from Baoji City in Shannxi Province, with a population of 3.65 million.
AIS IN CHINA: FROM LINEAR SIMPLICITY TO DYNAMIC COMPLEXITY
Transformation of AIS in China
In many developing countries including China, agro-sectors are dominated by family-based small-scale planting. This structure slows down the speed of diffusion and adoption of information and modern technology. While the Chinese agro-sector always achieved splendid performance in history, it has been laggard in the past hundreds of years, suffering from small-scale planting, obsolete technology and low added value.
Since the foundation of P. R. China in 1949, China has set up the biggest Agro-Innovation System in the world by establishing numerous rural technology extension stations. As shown in Figure 1, from 1949 to the 1980s, a linear-like model characterized the AIS under the Planned Economy. Contributions from agro-firms, universities and consumers were minimal, compared with the strong government instruction executed upon the research institutes and technology extension stations. From basic research to applied research, technology development, and to the agro-business and trade market, all the links in the value chain were under the strict control of government. Fairly speaking, under the Planned Economy, this institutional arrangement well suited the highly hierarchical and collective agricultural production. (3) Although the system was badly damaged during the ten years of 'Cultural Revolution' in 1960s and 1970s, it successfully provided direct technology support to the collective production system (Wu et al. 2003).
[FIGURE 1 OMITTED]
At the end of 1970s, Mao's 'Commune' institutions collapsed from average rewarding and low productivity. Market reform was then launched in 1979-1980 by the central government, dissembling the previous collective groups and allowing individual farmer households to work for themselves. The 'Household Contract Responsibility System' undermined the basis of collective production and therefore impacted the AIS. The extension stations and research institutes were encouraged to stand on their own and participate in market competition. Many technical persons quit institutes because of falling research funds. During the transition of AIS, a vacuum of technology transfer influenced the growth of the agro-sector: Farmers, who now worked individually based on contracted land use, could not get enough training in agricultural techniques, which was provided intensively by stations and collective communes. On the one hand, the disassembled system was therefore in great difficulty with actors isolated from each other (Figure 2, in the case of Baoji City). On the other hand, the pressure of food safety and environmentally friendly development made it urgent to upgrade traditional agricultural techniques. The demand for technology transfer has never been stronger than it is today.
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