The Greening of China’s Agriculture: A Compendium of Thematic Papers © 2022 The World Bank 1818 H Street NW, Washington DC 20433 Telephone: 202-473-1000; Internet: www.worldbank.org Some rights reserved This work is a product of the staff of the World Bank. The findings, interpretations, and conclusions expressed in this work do not necessarily reflect the views of the Executive Directors of the World Bank or the governments they represent. The World Bank does not guarantee the accuracy of the data included in this work. The boundaries, colors, denominations, and other information shown on any map in this work do not imply any judgment on the part of the World Bank concerning the legal status of any territory or the endorsement or acceptance of such boundaries. Rights and Permissions The material in this work is subject to copyright. Because the World Bank encourages the dissemination of its knowledge, this work may be reproduced, in whole or in part, for non-commercial purposes as long as full attribution to this work is given. Attribution—Please cite the work as follows: “World Bank. 2022. The Greening of China’s Agriculture: A Compendium of Thematic Papers. © World Bank.â€? All queries on rights and licenses, including subsidiary rights, should be addressed to World Bank Publications, The World Bank Group, 1818 H Street NW, Washington, DC 20433, USA; fax: 202-522-2625; email: pubrights@worldbank.org. Cover design and photo: Ladisy Komba Chengula i Foreword For five decades, agricultural production in China grew at a remarkable pace. Despite land and water constraints, China’s agricultural output kept pace with population growth and the diversification of diets through sustained intensification. Even as agriculture’s share of China’s labor force fell from 60 percent in 1991 to 24 percent in 2020, agricultural productivity gains boosted food supplies. Further, the shift of agricultural labor to urban and other sectors, such as industry, transport, and energy where wages were higher, contributed to a virtuous cycle of improved incomes nationwide, including in rural communities where poverty rates were highest. Many factors contributed to the growth of the agriculture sector, including evolving policies that granted greater autonomy to farmers, expanded the role of markets, and opened the sector to international trade; and policies that were backed by large investments in research and development, extension, and infrastructure. However, at the heart of the expansion were policies that prioritized productivity gains and promoted the use of resource-intensive technologies. Consequently, this remarkable period of agricultural growth had a significant negative impact on China’s environment and natural resources , especially land and water. Over recent decades, China’s agriculture has contributed to the degradation of forests, grasslands, aquatic, and other ecosystems. Large tracts of arable land have experienced soil acidification, salinization, and other forms of degradation. Agriculture has been the country’s leading source of water pollution and contributor to the depletion of groundwater resources. The sector is also a critical source of several biosecurity risks, ranging from zoonoses and unsafe food to the development of drug-resistant bacteria. Although its greenhouse gas (GHG) emissions are ranked fourth nationally after energy, industry and transport sectors, agriculture is a significant contributor to air and climate pollution. The factors contributing t o agriculture’s environmental footprint are wide-ranging; however, the proximate factors relate to the inappropriate and unsustainable uses of chemical agricultural inputs and irrigation water, the poor management of livestock and poultry manure as well as agricultural plastic mulch films, the over-intensive use of grasslands and aquatic resources, and the conversion of fragile terrestrial ecosystems for agricultural uses. As the costs to the environment accumulated and became better understood, a new set of agricultural policies emerged between 2015 and 2019 with the twin goals of reducing agriculture’s environmental footprint while sustaining decades-long sector gains in output and productivity to ensure food security. One of the most comprehensive statements on the practical implications of the policy shift for agricultural policy is given in the Ministry of Agriculture and Rural Affairs’ Notice on the Implementation of the Five Major Actions for Green Agricultural Development (2017) . The actions were designed to manage livestock, straw wastes, and plastic film; repurpose the wastes for use as inputs; and set aside biological reserves to restore fishery ecologies. This inflection point for Chinese agricultural policy provided the setting and motivation for a program of study initiated by the World Bank in late 2020 with three objectives. First, to synthesize the available evidence about environmental impacts attributable to China’s agricultural growth. Second, to report on and evaluate the regulations and programs pertinent to China’s aims of greening agricultural modernization. Third, to highlight major challenges and opportunities going forward to strengthen this overall initiative. Over the course of 2021, sixteen policy and technical working papers were prepared by experts from ii leading Chinese universities and scientific centers and experts from the Food and Agriculture Organization, the International Food Policy Research Institute, and external universities. Findings from background papers were organized along four major themes: (1) Restoring and Managing Agricultural Ecosystems as Climate Changes; (2) Deepening Pollution Prevention and Control on China’s Farms ; (3) Greening China’s Agriculture: Technology, Innovation, and Institutions; and (4) Reforming Agricultural Policy, Institutions, and Public Expenditure. This Compendium, The Greening of China’s Agriculture: Progress, Challenges and the Way Forward, brings together the four papers under one volume as reference materials. The Compendium (1) synthesizes the available evidence regarding the environmental footprint attributable to China’s agricultural growth and development; (2) takes stock of the status of policies, regulations, and programs pertinent to China’s aims of green agricultural modernization, their actual application, and of what is known about their efficacy; and (3) highlights major challenges and opportunities going forward to strengthen this overall initiative. The major findings from the Compendium are highlighted in the Greening of China’s Agriculture: A Synthesis, drawing heavily on recent experiences from pilot programs launched to evaluate alternative production technologies that are less resource-intensive, explore programs and incentives to restore and protect degraded ecosystems, and inform the design of efficient use of land and water resources. The Synthesis also complements a set of policy recommendations contained in The Greening of China’s Agriculture: A Policy Brief. More broadly, the Compendium, Synthesis, and Policy Brief fit within a comprehensive review of China’s efforts to reduce its agricultural environmental footprint, improve the management of natural resources to achieve green and sustainable agricultural development, and contribute to its ambitious goals of GHG peaking before 2030 and net zero emissions before 2060. Based on this work the World Bank hopes to continue supporting China’s efforts to green and modernize its agricultural sector by adopting low-carbon, climate-resilient, and inclusive policies and sustainable production systems. Mara Warwick Country Director, China and Mongolia Director for Korea Benoit Bosquet Regional Director Sustainable Development East Asia and Pacific Region Martien van Nieuwkoop Global Director Agriculture and Food iii CONTENTS LIST OF BOXES .................................................................................................................................................................. vi LIST OF TABLES ................................................................................................................................................................. vi ACKNOWLEDGMENTS .................................................................................................................................................... viii ABBREVIATIONS ............................................................................................................................................................... ix Study Overview ................................................................................................................................................................ 1 Context.................................................................................................................................................................................. 1 Study Program and Road Map .............................................................................................................................................. 3 PAPER 1............................................................................................................................................................................ 6 Restoring and Managing Agricultural Ecosystems as Climate Changes ............................................................................. 6 Synopsis ................................................................................................................................................................................ 6 1.1 Introduction .................................................................................................................................................................... 7 1.2 Cropland Ecosystems ...................................................................................................................................................... 7 1.3 Forest Ecosystems ......................................................................................................................................................... 13 1.4 Grassland Ecosystems ................................................................................................................................................... 15 1.5 Wetland Ecosystems ..................................................................................................................................................... 17 1.6 Aquatic Ecosystems ....................................................................................................................................................... 18 1.7 Conclusions ................................................................................................................................................................... 20 References .......................................................................................................................................................................... 21 PAPER 2...........................................................................................................................................................................23 Deepening Pollution Prevention and Control on China’s Farms .......................................................................................23 Synopsis .............................................................................................................................................................................. 23 2.1 Introduction: Food Security at a Cost ............................................................................................................................ 23 2.2 Agricultural Pollution is Diverse and Diffuse ................................................................................................................. 27 2.2.2 Land Pollution and Impacts on Crop Yields and Quality ............................................................................................. 29 2.3 Agricultural Drivers of Pollution .................................................................................................................................... 35 2.4 The Role of Policy and Market Failures, and “Asymmetricâ€? Agricultural Modernization ............................................. 42 2.5 Agricultural Pollution Prevention and Control Policies ................................................................................................. 44 2.6 Technical Opportunities for Green Agricultural Production.......................................................................................... 46 2.7 Cutting Food Loss and Waste and Increasing Efficiency in Trade and Food Supply ..................................................... 49 2.8 Deepening Agricultural Pollution and Control by Shifting the Food Mix ...................................................................... 51 References .......................................................................................................................................................................... 58 PAPER 3...........................................................................................................................................................................64 Greening China’s Agriculture: Investing in Technology, Innovation, and Institutions .......................................................64 iv Synopsis .............................................................................................................................................................................. 64 3.1 The Transformation of China’s Agricultural Sector and Its Impact ................................................................................ 64 3.2 A Shift in Natural Resource Policies and Goals .............................................................................................................. 73 3.3 Limiting Agriculture’s Natural Resource Footprint ........................................................................................................ 74 3.4 Strategic Technologies .................................................................................................................................................. 77 3.5 Achievements, Challenges, and Market Innovations .................................................................................................... 81 3.6 Summary and Conclusions ............................................................................................................................................ 87 References .......................................................................................................................................................................... 88 PAPER 4...........................................................................................................................................................................92 Reforming Agricultural Policy, Institutions, and Public Expenditure ................................................................................92 Synopsis .............................................................................................................................................................................. 92 4.1 Introduction .................................................................................................................................................................. 93 4.2 Elements of China’s Agricultural Transformation.......................................................................................................... 94 4.3 Policy, Institutional, and Public Expenditure Reforms ................................................................................................ 101 4.4 Toward Sustainable and Green Agriculture ................................................................................................................ 109 4.5 Toward Environmental Improvements at the Landscape Level .................................................................................. 110 4.6 Institutional Reform and Adoption of Sustainable Practices: Examples of Land Tenure Security .............................. 116 4.7 Unfinished Business .................................................................................................................................................... 118 References ........................................................................................................................................................................ 120 v LIST OF BOXES Box 2.1:Global Food Sector Emissions are at Odds with Climate Stabilization ................................................................................. 27 Box 2.2: Long-Term Exposure to Substances Present in Plastics is Potentially Harmful to Human Health ....................... 33 Box 2.3: Low Fertilizer-Use Efficiency in China: Some Explanations ...................................................................................................... 38 Box 2.4: Natural Climate Solutions: Options for Stabilizing the Climate Cost-Effectively ............................................................ 47 Box 2.5: Examples of CSA in Practice and Lessons Learned ........................................................................................................................ 48 Box 4.1: Hebei Province Tackles Groundwater Overexploitation ...........................................................................................................114 LIST OF TABLES Table 1.1: Area Composition of the Major Land Cover Types in China ..................................................................................................... 9 Table 1.2: Chemical Fertilizer Application in China (10 kt), 2014‒19 ................................................................................................... 10 Table 2.1: Push and Pull Strategies for a Food Shift ........................................................................................................................................ 57 Table 3.1: The Distribution of Farms by Size in China, 2019 –20............................................................................................................... 83 Table 4.1: Average Annual Growth (%) of Agriculture in China, 1952‒2018 ..................................................................................... 96 LIST OF FIGURES Figure 2.1: Crop Output in China, 1961–2021 .................................................................................................................................................... 24 Figure 2.2: Emissions on Agricultural Land, by Source and by Gas ......................................................................................................... 32 Figure 2.3: Fertilizer Use in China, 1961–2019.................................................................................................................................................. 37 Figure 2.4: Agricultural and Food System Uses of Plastics in China, 2018 ........................................................................................... 40 Figure 2.5: Options for Keeping Global Food Production Within Environmental Limits (Schematic) ................................... 52 Figure 2.6: Environmental Impacts Associated with the Universal Adoption of China’s Current and Recommended Dietary Patterns (2050), Expressed in terms of Relevant Food System Targets or “Boundariesâ€? ........................................... 53 Figure 3.1: Land and Labor Productivity in Agriculture, 1970–2019 ..................................................................................................... 66 Figure 3.2: Economic Growth and Sectoral Transformation, 1970–2020 ............................................................................................ 66 Figure 3.3: Rural and Urban Populations in China, Historical and Projected, 1970 –2050 ........................................................... 67 Figure 3.4: Agricultural Trade, 1970–2019 ......................................................................................................................................................... 68 Figure 3.5: Food Supply in China, 1970–2018 .................................................................................................................................................... 69 vi Figure 3.6: Poverty in China, 1990–2016.............................................................................................................................................................. 69 Figure 3.7: Access to Water and Sanitation Services, 2000–20.................................................................................................................. 70 Figure 3.8: Water and Fertilizer Intensification in Agriculture, 1970 –2018 ....................................................................................... 71 Figure 3.9: Annual Freshwater Withdrawals, 1982–2017 ........................................................................................................................... 72 Figure 3.10: Carbon Emissions and Fine Particulate Air Pollution, 1970 –2018................................................................................ 72 Figure 3.11: Annual Subsidies for the Purchase of New Farm Machinery, 2000 –19....................................................................... 80 Figure 3.12: Trends in Mechanization and Pesticide Use.............................................................................................................................. 82 Figure 3.13: Growth in Machine Hire Services, 2008–19 .............................................................................................................................. 84 Figure 4.1: Shares of High-Value Agriculture (HVA) by Province, Selected Years ............................................................................ 97 Figure 4.2: Shares of Rural Labor in Nonfarm Employment by Province, Selected Years ............................................................ 97 Figure 4.3: Per Capita Income in Rural Areas by Province, Selected Years .......................................................................................... 98 Figure 4.4: Rural Poverty Incidence by Province in China, Selected Periods ...................................................................................... 99 Figure 4.5: Major Agricultural Subsidies in 2004–18 (billion CNY in 2018 prices) .......................................................................104 Figure 4.6: National Public Expenditures on Agriculture, Forestry, and Water Conservancy, 2008–19 ..............................107 Figure 4.7: Public Expenditures on Direct Support for Agricultural Production in China ..........................................................108 Figure 4.8: Public Expenditures on Agricultural General Public Services in China ........................................................................109 Figure 4.9: National Eco-Environmental Direct Subsidies in China, 2010–19..................................................................................112 Figure 4.10: Eco-Conservation Public Service Expenditures in China, 2010–19.............................................................................113 vii ACKNOWLEDGMENTS Under the guidance of Mara Warwick (Country Director, China, EACCF); Martin Raiser (former Country Director, China, EACCF); Alejandro Alcala Gerez (Operations Manager, China, EACCF); Benoit Bosquet (Director, SEADR); Martien Van Nieuwkoop (Director, SAGDR); Dina Umali-Deininger (Practice Manager, SEAAG); and Yoonhee Kim (Sector Leader, SEADR), this Greening of China’s Agriculture: A Synthesis report was prepared by a core World Bank team comprising Ladisy Komba Chengula (Lead Agriculture Economist, Task Team Leader, SEAAG); Madhur Gautam (Lead Economist, GFA12); Wendao Cao (Senior Agriculture Economist, SEAAG), and Sitaramachandra Machiraju (Senior Agriculture Economist, SEAAG). Xuan Peng (Senior Program Assistant) and Yunqing Tian (Program Assistant) provided logistic and administrative support to the team. This report is based on 16 policy and technical working papers prepared by a team of Chinese researchers, academicians, and consultants. Agricultural pollution working papers were prepared by Gao Shangbin (synthesis report), Wang Quanhui (food loss and waste), Zhang Keqiang (livestock wastes), Zhang Weifeng (chemical fertilizers), Liu Yaping (pesticides), Yuyun Bi (crop residues burning), Mu Xiyan (aquaculture), and Hongyi Cai (dietary transition). Agricultural technologies and innovations working papers were prepared by Kevin Z. Chen, Yumei Zhang, and Binlei Gong (research and development); Wenbin Wu (digital agriculture); Lei Bo (agriculture water-use efficiency); and Minli Yang (sustainable agricultural mechanization). Sustainable natural resource management working papers were prepared by Jin He and Shangchuan Jiang (conservation agriculture); Fu Chen, Xiaogang Yin, and Shangchuan Jiang (climate-smart agriculture); and Li Changxiao (landscapes and ecosystems restoration). Similarly, the rural and agricultural policy working papers were prepared by Jikun Huang (rural transformation policy analysis), Songqing Jin and Xuwen Gao (farmland policy analysis), and Kevin Z. Chen and Zhang Yumei (producer support policy and public expenditure analysis). Yuan Mi and Zhang Wei translated the agricultural pollution working papers from Chinese to English. The working papers were edited by William J. Hardy. The synthesis report was edited by Avril Adrianne D. Madrid. The World Bank team is grateful for their analytical work and substantive inputs to this report. The above policy and technical working papers were summarized into four papers: (1) Deepening Pollution Prevention and Control on China’s Farms; (2) Restoring and Managing Agricultural Natural Resources as Climate Changes; (3) Investing in Technology, Innovation, and Institutions; and (4) Reforming Agricultural Policy, Institutions, and Public Expenditure. The papers were prepared courtesy of Steven Jaffee, Emilie Cassou, Jock Anderson, and Donald Larson, respectively, under the guidance of and inputs from Ladisy K. Chengula (Task Team Leader). The authors made every effort to present data and information from the various working papers as coherently as possible but acknowledge that some inconsistency in the information is inevitable. During the concept and preparation stages of this report, the authors received invaluable advice and guidance from the following peer reviewers: Ulrich Schmitt (Lead Agricultural Economist, SCAAG); Sebastian Eckardt (Lead Economist, EEADR), Paola Agostini (Lead Natural Resource Management Specialist, SCAEN); William R. Sutton (Lead Agricultural Economist, SAGGL); and Svetlana Edmeades (Senior Agricultural Economist, SCAAG). viii ABBREVIATIONS AFW agriculture, forestry, and water conservancy AMR antimicrobial resistance CA conservation agriculture CAAS China Academy of Agricultural Sciences CAU China Agricultural University CNY Chinese yuan CO carbon monoxide CO2e carbon dioxide equivalent COD chemical oxygen demand CPC Communist Party of China CRHPS China Rural Household Panel Surveys CSA climate-smart agriculture CSSCP Climate-Smart Staple Crop Production Project DCBT Desertification Combating Program around Beijing and Tianjin EU European Union FAO Food and Agriculture Organization of the United Nations FLW food loss and waste FYP Five-Year Plan GDP gross domestic product GEF Global Environment Facility GESAS Grassland Ecological Subside and Award Scheme GHG greenhouse gases GM genetically modified GPS global positioning system HRS Household Responsibility System HVA high-value agriculture ID irrigation district ISSM integrated soil-crop system management ITPP Industrial Timberland Plantation Program MARA Ministry of Agriculture and Rural Affairs MEE Ministry of Ecology and Environment MOF Ministry of Finance MOST Ministry of Science and Technology MWR Ministry of Water Resources NBS National Bureau of Statistics NDRC National Development and Reform Commission NFPP Natural Forest Protection Program NKP National Key R&D Program ix ABBREVIATIONS NPP net primary productivity NPS nonpoint source pollution NRM natural resources management NSFC National Science Foundation of China OECD Organisation for Economic Co-operation and Development PAHs polycyclic aromatic hydrocarbons PC polycarbonate PPRNF Plan for the Protection and Restoration of Natural Forests PS polystyrene PUE polyurethane PVC polyvinyl chloride RLCL Rural Land Contracting Law RRS Rural Revitalization Strategy R&D research and development SAPs sustainable agricultural practices SAT State Administration of Taxation SLCP Sloping Land Conversion Program SOC soil organic carbon SDG Sustainable Development Goal SOM soil organic matter SNDP Shelterbelt Network Development Program STB Science and Technology Backyard TN total nitrogen TNC The Nature Conservancy TP total phosphorus TRQ tariff rate quota TSP Temporary Storage Program USD United States dollar VOCs volatile organic compounds WCNR Wildlife Conservation and Nature Reserve Protection Program WTO World Trade Organization WUA water use association x 1 Study Overview Ladisy Komba Chengula Context Before the late 1970s, China’s agricultural policies promoted collective farming and communal production teams. Cereal yields and production grew, although labor productivity and rural incomes stagnated. More than 80 percent of farmland was devoted to producing basic grains, and broader food availability remained low. Reforms began with a grassroots innovation in Anhui Province, where a small group of farmers took on household responsibility for production obligations in exchange for greater decision-making autonomy. Over the next few years, the approach, which became known as the household responsibility system, was piloted in poor agricultural regions and expanded quickly. By 1983, this system was adopted by more than 94 percent of agricultural households. This shift to a greater reliance on household decision-making initiated a steady evolution toward market-based policies, including additional reforms to land-lease markets, and a phased liberalization of agricultural markets, beginning with nonstrategic products in the 1980s and eventually moving to strategic crops, including grains, by the late 1990s. Major reforms in its trade policies and institutions followed China’s 2001 accession to the World Trade Organization (WTO). And in the early 2000s, China eliminated some major agricultural taxes and moved to provide substantial direct (that is, subsidies) and general (that is, public goods) support to agriculture. The mixed efficacy and some unintended impacts of these efforts catalyzed additional rounds of policy and public expenditure reforms in the sector. The big-picture results of these efforts have included a massive expansion in agricultural production, considerable improvements in productivity, a major diversification of sectoral output, and major contributions to China’s achievements in poverty reduction. Over the period between 1970 and 2020, China’s crop production increased by nearly five -fold, and its livestock production grew nearly 12-fold. Despite being boxed in by land and water constraints, China’s agricultural output stayed on pace with population growth and the diversification of diets through sustained intensification. While the country gained close to 600 million people—a 72 percent rise—and produced about 2.8 billion additional tons of plant food each year—a 313 percent rise—its arable land expanded by just under 20 percent. While grain output tripled in volume over this period, fruit and vegetable production was multiplied by 19, and meat and milk production grew by more than 10 and 20 times, respectively. Increased agricultural productivity boosted food supplies and rural incomes. Structural changes in production and increased mechanization facilitated a shift of agricultural labor to other sectors where wages were higher. Agriculture’s share of China’s labor force fell from 60 percent in 1991 to 24 percent in 2020. Gains in income both within and beyond agriculture have allowed China to virtually eliminate the incidence of extreme poverty in the country. This remarkable period of agricultural intensification and growth has a dire legacy. It has come at a great cost to China’s environment and natural resources. Over recent decades, China’s agriculture has contributed to the degradation of forest, grassland, aquatic, and other ecosystems. Large amounts of arable land have experienced soil acidification, salinization, and other forms of degradation. Agriculture has been the country’s leading source of water pollution and is a leading contributor to the depletion of groundwater resources in many locations. The sector is also a critical source of several biosecurity risks, ranging from zoonosis and unsafe food to the development of drug-resistant bacteria. Although its emissions are overshadowed by other sectors, agriculture is a significant contributor to air and climate pollution. And through its heavy reliance on pesticides and plastics, agriculture is strongly implicated in the introduction into the environment of novel entities, which are chemical compounds whose cumulative and aggregate effects are a source of public health and ecological concerns. The factors contributing to agriculture’s enormous environmental footprint are as varied as the dimensions of this footprint. The proximate factors relate to inappropriate, excessive, and otherwise unsustainable uses of material agricultural inputs and water, over-intensive use of grasslands and exploitation of aquatic resources, and significant conversions 1 of fragile ecosystems for agricultural uses. Yet, these practices did not emerge in a vacuum but rather in the context of evolving policies, institutions, and incentives, both market and non-market-based. As the costs to the environment accumulated and became better understood, a new set of agricultural policies emerged with the twin goals of reducing ag riculture’s environmental footprint and sustaining decades-long sector gains in output and productivity. Though foreshadowed in earlier policy proclamations, the practical goals and the implementing instruments were largely formed in a relatively short period of time, beginning with the strategic policy document, Several Opinions on Comprehensively Deepening Rural Reform and Accelerating the Promotion of High-Efficiency and Low-Carbon Agriculture, issued by the Communist Party of China (CPC) State Council in 2014. This document signaled a shift from production and productivity objectives meant to supply rapidly expanding food systems to sustainability goals and environmental remediation objectives. The vision emphasized the expanded use of new, greener technologies. Between 2015 and 2019, China’s State Council took significant steps to reset natural resources management policies and laws, issuing the Water Pollution Prevention and Control Action Plan (2015); the Action Plan for Zero Growth in Pesticide Use by 2020 (2015); a revision of the Environmental Protection Law (1980, 2015); the Pollution Prevention and Control Action Plan (2016); a revision of the Water Law (2002, 2016); a revision of Air Pollution and Control Law (2000, 2016); the Soil Pollution Prevention and Control Action Plan (2016); a revision of Pesticide Management Regulations (1997, 2017); and a revision of the Law on the Prevention and Control of Soil Contamination (2019). One of the most comprehensive statements on the practical implications of the policy shift for agricultural policy is given in MARA’s Notice on the Implementation of the Five Major Actions for Green Agricultural Development (2017). Collectively, the actions were designed to manage livestock, straw wastes, and plastic film and repurpose the wastes for use as inputs. The programs supported recycling efforts and using organic fertilizers on horticultural crops and tea. The programs also set aside biological reserves to restore fishery ecologies. In 2021, China’s Number One Document reaffirmed the approach, supporting the green development of agriculture and accelerating the transition to high-efficiency and low-carbon agriculture. Accompanying these regulatory and policy shifts at the national level were broad changes in the purpose and targeting of subsidies and the patterns of public expenditure in the sector. Yet, many efforts to induce changes in farmer practices or area-based natural resources management (NRM) relied on pilots to inform the national shift in policy. For example, initially, new standards for animal waste management would only apply to large livestock and poultry operations, and new straw treatment rules would apply, initially, only to counties in Northeast China; the use of organic fertilizers for fruit, vegetables, and tea production would be piloted in 100 key counties; the aquatic measures would be piloted in the Yangtze River; pilots to limit plastic film waste through recycling programs in combination with the increase in the use of natural mulches involved constructing 100 demonstration centers focused on cotton, maize, and potatoes in the northwest. This reliance on pilots has helped to minimize costly mistakes and allow for adaptations to local circumstances, yet this same reliance has established a process in which considerable time will be needed to realize major gains at scale. Broadly, NRM policies touch on all the many ways that humans interact with their natural environment. This creates a challenge for agricultural policymakers, who must find a practical way to oversee policy design and implementation that are comprehensive enough to be effective and streamlined enough to be well managed. This requires deeper coordination and integration of efforts across several disciplines and ministries, including the Ministry of Agriculture and Rural Affairs (MARA), Ministry of Science and Technology (MOST), Ministry of Natural Resources (MNR), and Ministry of Water Resources (MWR). Moreover, because the policy objectives and underlying technologies are multidisciplinary, a renewal of institutional incentives and human capital across the agricultural sector and its institutions is needed. This is especially true for China’s large and decentralized agricultural research network, built up during th e long period when resource-intensive technologies were promoted, and technologies were rooted in traditional agricultural sciences. Meanwhile, China will need to strengthen its efforts to accelerate green technology adoption and broaden its approach. It is not only how food is produced that needs to change, but also how much, where, and especially what food is produced and consumed in order to shift trajectories. Efforts to green and modernize China’s food system will likely prove tardy and insufficient if not accompanied by changes in the 2 food mix. Much depends on China becoming a leader not only in green farming but also in low-loss supply chains, environmentally-informed trade, alternative sources of protein, and agricultural landscape and ecosystem restoration. The latter is needed to capture the greenhouse gases that the sector will continue to emit even after sector emissions are abated to the fullest extent allowed by technology. In recent years, China’s “green agricultural modernizationâ€? efforts have helped it contain agricultural pollution and ecosystem destruction. But to reverse it within the decade, China may need to set its sights on a new goal: perhaps one in which agricultural modernization is not environmentally remedied so much as reimagined. Study Program and Road Map This inflection point for Chinese agricultural policy provided the setting and motivation for a program of study initiated in the third quarter of 2020. The aims of the work have been to (1) synthesize the available evidence regarding the environmental footprint attributable to China’s agricultural growth and development; (2) take stock of the status of policies, regulations, and programs pertinent to China’s aims of green agricultural modernization, their actual application, and of what is known about their efficacy; and (3) highlight major challenges and opportunities going forward to strengthen this overall initiative. The latter might include further refinement of objectives and policies; strengthening pertinent institutions and incentives; and targeting and monitoring arrangements for improved coordination, both among implementing agencies (at central and subnational levels) and across sectors. This analysis of the greening of Chinese agriculture would be set in the broader context of the country’s econo mic transformation and broader ambitions for sustainable development and “ecocivilization.â€? Over the course of 2021, 16 policy or technical working papers were prepared by experts from leading Chinese universities and scientific centers and experts from the Food and Agriculture Organization (FAO), the International Food Policy Research Institute (IFPRI), and external universities. The majority of the papers fell within one or several clusters, with the major themes pertaining to (1) China’s evolving agricultural structure, policies, and public expenditure; (2) measures to promote agricultural innovation, including low-carbon technologies; (3) problems and initiatives to improve NRM; and (4) measures to control and manage agricultural pollution. Many specific subtopics were covered. For example, to gauge the state of play with regard to agricultural pollution, specific coverage was given to matters related to the misuse of fertilizers and pesticides, the management of livestock wastes, efforts to reduce pollution from agricultural plastics, and measures to reduce food losses. The innovation theme included attention to irrigation efficiency, sustainable mechanization, digital applications in agriculture, and research and development (R&D) on green technologies. This report and collection of working papers can be accessed at World Bank Group Website.1 Some are available in both Chinese and English. This Compendium consists of four papers following the major themes covered in the Working Paper series and draws heavily upon them for much of the empirical content. The report was prepared to reach a broad audience of practitioners involved with or interested in China’s agriculture trajectory, especially its interfaces with the environment. The papers have been written to be widely accessible, both in terms of their length and technical detail. An abridged synthesis and a policy note, primarily targeting Chinese program managers and policymakers, respectively, have also been prepared. The policy note provides a brief synopsis of major findings from the study program and a set of recommendations for strengthening ongoing initiatives supporting China’s green agricultural modernization. The coverage and major findings of the Compendium papers are as follows. 1 The World Bank Group, Documents and Reports. https://documentsinternal.worldbank.org/Search?k=p171518 3 Restoring and Managing Agricultural Ecosystems as Climate Changes This paper reviews the five primary natural ecosystems that constitute most of China’s agricultural natural resources. The paper describes the systems’ geological features and the economic services they provide; the shifting of land between forests, farmland, and urban uses; and details the degradation of the five ecosystems over time. The paper highlights the overarching policies and strategies intended to restore the health of the five ecosystems and points to encouraging signs of recovery. One area of progress has been the strong adoption of a set of practices often described as conservation agriculture (CA). Interventions to promote climate-smart agriculture (CSA) have also sometimes contributed to reduced pressures on China’s diverse ecosystems. However, the paper notes that many problems still prevail in relation to ecological protection and restoration in China. Many of its natural ecosystems are inherently fragile and at risk if future development insufficiently attends to environmental protection. Moreover, ideas for integrated landscape management, integrating mountains, waters, forests, fields, lakes, and grasslands, have not yet been fully accepted and implemented, despite promising elements of progress through a diverse set of restoration and conservation projects. Deepening Pollution Prevention and Control on China’s Farms This paper explains how past policies and input-intensive technologies have extracted a high price from China’s natural resource base. It examines the various forms, extent, and causes o f agricultural pollution and pulls together evidence of its multidimensional effects, including on human health. The paper examines various policy levers to limit pollution. The paper finds that agricultural pollution has gained attention as a focus of national and agricultural policy, both of which have become increasingly focused on ecological outcomes. And together, changes in policy and sector circumstances have brought the pollution challenge to the point of containment without sacrificing the high levels of food security and dietary diversity the country values and enjoys. But China will need to move from containment to reversal to operate within ecological boundaries, make climate stabilization possible, and role-model “ecocivilization.â€? Reversing agricultural pollution demands a still higher prioritization of—and commitment to leveraging public and private resources—green farming practices and technologies to the extent supported by proven and mature technologies. But even in a best-case scenario, China will need to not only strengthen its efforts but also broaden its approach. It is not only how food is produced that needs to change, but also how much, where, and especially what food is produced and consumed that need to shift trajectories. Investing in Technology, Innovation, and Institutions The widespread adoption of Green Revolution technologies triggered China’s initial decades of agricultural productivity gains. Because the innovations were primarily biological and embodied in seeds, the technologies worked well on China’s small farms. Nevertheless, while land -saving, these technologies placed a heavy burden on China’s natural resources. This paper describes the recent evolution of China’s agricultural policy to better balance production goals with natural resource protection and remediation. The policy relies on the adoption of a new set of technologies —some draw on traditional agricultural sciences, including plant breeding and agronomy, but others rely on a new generation of digital platforms, telecommunication and navigation systems, satellite and surface remote sensing systems, and a new breed of smart machines that use resources more efficiently. The paper examines efforts to promote these technologies and highlights key lessons from ongoing pilots. Unlike earlier plant-breeding innovations that worked on farms of all sizes, many of the new technologies exhibit economies of scale. China’s agricultural labor force is aging, and there are indications that the consolidation of farms has begun. And the technologies described in this paper are well-suited to a future Chinese agricultural sector made up of larger and more capital-intensive farms. However, the rollout of key resource-and-labor-saving technologies faces challenges in the near term since China’s agriculture and the institutions that support it remain structured around small farms. 4 Reforming Agricultural Policy, Institutions, and Public Expenditures This paper provides a short synthesis of the major achievements in Chinese agriculture and rural development over recent decades and summarizes the evolution of Chinese policy support for agriculture and rural livelihoods, drawing attention to important areas of institutional reform and patterns of public expenditure. Particular attention is then given to the evolving policy and program support for the greening of agriculture, the evidence regarding its efficacy, and the apparent gaps or implementation challenges associated with these efforts. The paper finds that despite an expansion in eco-agricultural programs over time, still only about one-fifth of overall public expenditure in the agricultural sector is clearly geared toward advancing environmental or natural resource conservation objectives. Farmer adoption rates for various sustainable practices have increased, yet there is still a long way to go and likely a need to further improve eco-compensation and other incentive mechanisms, and the approaches used for targeting certain programs. Other areas of unfinished business include refining the environmental indicators underpinning policy objectives; strengthening the monitoring, reporting and verification systems related to those indicators; and refining certain programs and targets to better reflect local conditions and opportunities. Bottom line: China should not only strengthen its efforts to accelerate green technology adoption, but it may need to set its sights on a new goal —agricultural modernization that is not just environmentally remedied but boldly reimagined. 5 PAPER 1 Restoring and Managing Agricultural Ecosystems as Climate Changes Jock R. Anderson, Li Changxiao, Shangchuan Jiang Fu Chen, Xiaogang Yin, and Jin He Synopsis China is a large country supporting a significant fraction of humanity with remarkably diverse ecosystems and landscapes, many of which are largely occupied by agricultural pursuits that pose challenges to the sustainable use of the “agriculturalâ€? natural resources, such as land and soil, vegetation and animals, wate rs of various types, and the atmosphere. Agriculture also uses other resources, such as energy from fossil coal, oil, and gas, and other sources, such as solar, wind, and hydro. These are not the focus of this paper. This paper is a short synthesis by Jock R. Anderson of three technical reports (Li 2021; Chen, Yin, and Jiang 2021; He and Jiang 2021). For brevity, most references to the hundreds of studies cited in those reviews are not directly included in this abbreviated synthesis. China has suffered degradation of its ecosystems and landscapes throughout its deep history, especially over the past few decades. This degradation seriously affects the structure and function of ecosystems and their sustainable development, thus, directly and indirectly leading to land and vegetation destruction, water environmental deterioration, soil erosion, biodiversity loss, and frequent drought and flood disasters. It is important to understand the reasons and driving forces that cause such degradation in China and find good management practices to restore degraded ecosystems. The targeted ecosystems include China’s croplands, forests, grasslands, arid ecosystems, derelict mined ecosystems, wetlands, and aquatic ecosystems. Based on a comprehensive review (Li 2021), the quality of China’s ecological environment may be at a turning point with evidence of positive change. However, many problems still prevail in relation to ecological protection and restoration. Many of its natural ecosystems are inherently fragile and at risk if future development insufficiently attends to environmental protection. Moreover, ideas for integrated landscape management, integrating mountains, waters, forests, fields, lakes, and grasslands, have not yet been fully accepted and implemented, despite promising elements of progress through a diverse set of restoration and conservation projects. China’s contemporary agricultural practices are increasingly consistent with climate -smart agriculture (CSA), as Chen, Yin, and Jiang (2021) have described. CSA is an integrated approach to managing landscapes — croplands, lands grazed by livestock, forests, and land occupied by fisheries —addressing the interlinked challenges of food security and accelerating climate change. The many CSA initiatives are elaborated herein, particularly in the cropland ecosystems section. Particular attention is given to an important set of practices often described as conservation agriculture (CA), in which China has been an important innovator and strong adopter, as detailed by He and Jiang (2021). 6 1.1 Introduction The degradation of ecosystems diminishes the benefits that human beings obtain from them, which is detrimental to both present and future generations. The unwise use of its natural resources by its large human population has led to much ecosystem degradation in China, including water degradation, soil erosion, vegetation destruction, biodiversity loss, and increased drought and flood disaster frequency. The impact of ecological degradation on China’s fragile ecosystems has attracted great attention from the state (Zhen et al. 2020). For instance, on June 3, 2020, the National Development and Reform Commission of the People’s Republic of China issued a notice on the Master Plan on the Protection and Restoration Projects of Important Ecosystems in China (2021‒2035), stressing that ecological protection and restoration should be comprehensively strengthened through the vigorous implementation of major projects for the protection and restoration of important ecosystems. Since the early 1980s, the unprecedented combination of economic and population growth has led to dramatic land transformation and degradation across the nation. For example, Chinese rural communities and their leaders converted large tracts of forest and grassland into farmland, often on steep slopes, thus causing serious land degradation. But with the large-scale rural-to-urban population migration, land use has been further transformed. The area of farmland, which represents considerable human interference, has shifted from expansion to contraction, resulting in the large-scale abandonment of farmland in mountainous areas. The transformation and degradation have resulted in many environmental problems, such as the silting up of rivers, reservoirs, and lakes; changes in the soil’s organic carbon reserve; the disappearance of special habitats; and biodiversity loss. The conversion of farmland into forestland and the implementation of various national ecological construction measures have curbed national land degradation, and the overall ecological situation has arguably begun to improve. For instance, with the construction of nature reserves on the Qinghai –Tibet Plateau and the implementation of ecological engineering and planning, the areas of grasslands and wetlands have increased, the area of barren lands has decreased significantly, and the ecological functions of most nature reserves have been strengthened. This ecological improvement in China has arguably made a significant contribution to global greening and increased forest cover (Chen et al. 2019). The Chinese government has declared its intention to establish a ‘‘harmonious society’’ with explicit recognition of the protection of the environment in its future economic development. This paper seeks to examine just how well the agricultural dimensions of these intentions may prove to be effective. The government has made strong general commitments to climate-smart agriculture (CSA) and integrated land management systems, with the intention to promote integrated and sustainable land management models based on “nature-based solutions.â€? These include enhanced natural carbon sinks in forests ; productive landscapes, wetlands, and coastal ecosystems that improve biodiversity; landscape restoration, and ecological reconstruction. The practical means of advancing this green agenda within the agricultural sector have been focused on implementing CSA across the subsectors, as described for the major ecosystems in the following sections. Within the cropping subsectors, the adoption of conservation agriculture (CA) has been a major change in farming practice that involves reducing the use of fossil fuels and better-protecting soil carbon stores. However, the major “agriculturalâ€? carbon sequestra tion efforts have been in the reforestation subsectors of the various ecosystems. 1.2 Cropland Ecosystems Although China has a vast territory, abundant resources, and the third-largest national land area in the world, the per capita arable land area is relatively small at two-fifths of the world average. In recent years, the cropland area has decreased significantly because of rapid population increase; infrastructure development; the basic construction of industry and town development; and land degradation, such as soil erosion and desertification. Although the Chinese government has since 2004 regularly reaffirmed a “red lineâ€? (a lower limit not to be crossed) of 120 million hectares (ha) (1.8 billion mu) of arable land, the situation related to cropland area decline continues to be of great national concern, as articulated in the 7 National Plan for Sustainable Agricultural Development (2015‒2030) published by the Ministry of Agriculture and Rural Affairs (MARA) of the People’s Republic of China. 1.2.1 Cropland Area and Degradation China’s arable land use has long been in a state of high -intensity use and possible degrading exploitation (or “overloadâ€?), and the conflict between arable land protection and social development has long been prominent. China’s arable land accounts for less than 10 percent of the world’s total, but this land is faced with feeding nearly 20 percent of the world’s population. The average arable land per household is only 1/40th of that in the European Union and 1/400th of that in the United States. The continuing, almost arbitrary, occupation of cultivated land for rapid urbanization and industrialization is a challenge that persists for agriculture. There are others. Cultivated land fertility often declines, and arable land can become seriously degraded. For instance, soil acidification of arable land has increased. Approximately 14 percent of China’s arable land has been severely acidified. Over the past 30 years, the area of acidified arable land with a soil pH of less than 5.5 in Hunan, Jiangxi, Guangxi, and other provinces has increased by 35 percent, and crop yields have declined by more than 20 percent. The problem of arable land soil salinization is also serious. China’s saline - alkaline arable land is about 7.6 million ha, increasing nearly 30 percent since the 1980s. In addition, the soil organic carbon (SOC) in the arable black soil in Northeast China (some 18 million ha) is seriously degraded. Finally, in this short introductory inventory, the current farmland water conservancy has difficulty meeting irrigation requirements. Perhaps linked to rural-to-urban migration, many irrigation districts are in disrepair and urgently need to be updated and upgraded. China’s cropland area was 112 million ha in 1957, and the average area per capita was 0.19 ha. Since then, although there have been some reclaimed croplands, the total cropland area declined by 5.4 million ha, and the resultant crop production drop was 25 kilotons (kt) per year from 1981 to 1995. Then, the cropland area increased to 133 million ha in 2004. Since 2009, the cropland area in China has been maintained at a relatively stable level, although a slight fluctuation occurs in cropland areas across the whole country. The current cropland area in China is approximately 13 5 million ha, which comfortably exceeds the “red lineâ€? of 120 million ha, but the average amount per capita is only 0.092 ha due to the rapid population increase, that is, about 40 percent of the average of the rest of the world (Table 1.1). China has a long history of cultivation, but agricultural production has taken a lot of nutrients from the soil, which leads to low soil organic matter (SOM) without effective maintenance and rebuilding. The overall quality of existing cultivated land is low, and some prominent problems exist, such as soil nutrient imbalance, fertilizer efficiency decline, and environmental degradation, among others. The quality of cropland in China has been declining in recent decades. The proportion of first-class cropland in China was about 41 percent in 2004. It declined to approximately 27 percent in 2014‒2017, but through the progressive adoption of CSA practices, it improved to about 31 percent in 2019. Several causes of cropland degradation include inadequate attention to maintenance; the improper use of fertilizer (too large an amount of inorganic fertilizer in contrast to too small an amount of organic fertilizer), which leads to an imbalance of nitrogen (N), phosphorus (P), and potassium (K); the overuse of K; and secondary salinization and alkalization. The massive application of fertilizers and pesticides has contributed greatly to soil acidification, underground water pollution, and soil erosion and hardness. 8 Table 1.1: Area Composition of the Major Land Cover Types in China 2004 2009 2014 2019 Type % % % % Area Area Area Area Share Share Share Share Cropland 1.33 13.90 1.35 14.06 1.35 14.06 1.35* 14.06 Forestland 1.75 18.21 2.69 28.00 2.67 27.81 2.20 22.92 Grassland 3.99 41.55 2.87 29.93 2.86 29.79 3.76 39.17 Inland water area 0.18 1.85 0.37 3.85 0.37 3.85 0.37 3.85 Gobi, quicksand, and barren terra 1.85 19.27 1.73 18.03 1.72 17.93 1.28 13.33 Town, residential area, mine, 0.25 2.62 0.36 3.74 0.39 4.06 0.42 4.38 traffic area Glacier 0.06 0.61 0.06 0.62 0.06 0.62 0.06 0.62 Others 0.19 1.99 0.17 1.77 0.18 1.88 0.16 1.67 Summation 9.60 100 9.60 100 9.60 100 9.60 100 Sources: China Land and Resources Almanac (Ministry of Land and Resources n.d.); China Forestry Resources Report (Ministry of Agriculture 2016); Grassland Investigation Report (Ministry of Agriculture 2014); Natural Resources Bulletin (Ministry of Ecology and Environment 2018); China Statistical Yearbook (National Bureau of Statistics 2018) Note: Area is given in 100 million ha. The cropland quality categories are first (42 million ha), second (63 million ha), and lower (30 million ha). China has been an enthusiastic adopter of CSA, especially in its cropping regions (Chen, Yin, and Jiang 2021). CSA is a set of practices articulated and championed by FAO in 2010 (FAO 2013). It deals with all the subsectors addressed herein, but CSA, as strongly supported by many agencies, such as the World Bank, focuses on cropping systems. CSA aims to simultaneously achieve three outcomes, as follows. 1. Increased productivity: Produce more and better food to improve nutrition security and boost incomes, especially for 75 percent of the world’s po or who live in rural areas and mainly rely on agriculture for their livelihoods. 2. Enhanced resilience: Reduce vulnerability to drought, pests, diseases, and other climate-related risks and shocks and improve capacity to adapt and grow in the face of longer-term stresses, such as shortened growing seasons and erratic weather patterns. 3. Reduced emissions: Pursue lower emissions for each calorie or kilo of food produced, avoid deforestation originating from the expansion of cropped and grazed areas, and identify ways to remove carbon from the atmosphere. Important elements of CSA are improved use of agricultural chemicals and improved tillage practices, themes taken up in the following two subsections. As part of its adoption of CSA as a strategic greening direction, the Chinese government has also resolved to construct climate-smart animal husbandry systems, as described in section 1.2.4 on mixed farming. This will focus on establishing modern livestock and poultry breeding systems and work on increasing productivity, balancing forage and livestock, controlling pollution, and reducing greenhouse gas (GHG) emissions. Furthermore, it embodies crucial steps, such as promoting technologies that improve livestock and poultry breeding, precision feeding to optimize feed return rate and manure management, grassland management optimization, and other measures. Particular attention will be paid to minimizing animal enteric methane, fecal methane, and N 2O emissions and maximizing grassland carbon storage, challenging as these are in practice. Efforts will also be made to construct climate-smart energy systems in rural areas. These will focus on rural sustainable energy substitution and carbon emissions deduction from production and living energy. Development of sustainable energy, such as biogas, bio-liquid fuels, and combustion for power generation 9 produced from agricultural biomass (straw, livestock, poultry manure, etc.), will all necessarily contribute to the intended carbon peak and carbon neutrality. 1.2.2 Fertilizer and Pesticide Use on Cropland Before the early 1960s, China’s main agriculture type was traditional organic agriculture. Organic fertilizer and green fertilizer were mainly used for maintaining soil fertility, but soil nutrition was unbalanced in most croplands and caused severe degradation. From the mid-1960s to the early 1970s, with the development of industrialized fertilizer, about 80 percent of harvested N and P came from inorganic fertilizer, 20 percent from depleting soil, and South China began using K fertilizer. N and P fertilizer use became more balanced when the whole nation began using K fertilizer in the mid-1970s. From the late 1970s to the present day, the amount of inorganic fertilizer used nationally almost doubled. From 1978 to 2015, China’s agricultural fertilizer application continued to increase. In 2016, it reduced for the first time. However, the intensity of manufactured fertilizer application did not decrease substantially. The scalar amount of such fertilizer application per unit of arable land is still as high as 445 kilograms per hectare (kg/ha), which greatly exceeds the “safe upper limitâ€? of 225 kg/ha sometimes set by developed countries to prevent chemical fertilizers from harming the environment. More specifically, for example, in 2019, China used 22.31 million tons (Mt) of compound fertilizer, accounting for 41 percent of agricultural fertilizer applications, while using 19.3 Mt of N, 6.82 Mt of P, and 5.61 Mt of K fertilizers (as supplied product weight), with a corresponding ratio of 36 percent, 13 percent, and 11 percent, respectively, of the nationwide agricultural fertilizer applications. Table 1.2 indicates that single-nutrient fertilizer applications in China have been decreasing steadily since 2014, although this has been offset by increased application of compound fertilizer. China has now become the world’s largest producer and consumer of manufactured fertilizer. With its cultivated land area accounting for only 7 percent of the world’s total, China consumes nearly one -third of the world’s fertilizer, and the amount per unit area is 3.7 times the world average. Taking nitrogen fertilizer as an example, the average application rate of N fertilizer in China is still 1.51, 1.59, and 3.29 times that of France, Germany, and the United States, respectively. Table 1.2: Chemical Fertilizer Application in China (10 kt), 2014‒19 Year 2014 2015 2016 2017 2018 2019 Nitrogen 2,393 2,362 2,311 2,222 2,065 1,930 Compound 2,116 2,176 2,207 2,220 2,269 2,231 Phosphorus 845 843 830 798 729 682 Potassium 642 642 637 620 590 561 Summation 5,996 6,023 5,985 5,860 5,653 5,404 Source: Data available from Chyxx.com (2020) Along with the prolonged overuse of fertilizers, more and more problems in ecology, environment, and agricultural product quality began to appear. As elaborated in Paper 2, the annual use of pesticides has continued at high levels in recent years. At present, nearly 13 million ha of farmland is polluted by pesticides nationwide, of which some 3 million ha is only moderately polluted. The situation is of serious concern. Due to the long-term excessive application of chemical pesticides such as herbicides, some arable land has even produced “toxic soilâ€? phenomena, which has brought more serious ecological problems. Pesticides mainly include fungicides, insecticides, and herbicides. In recent years, with the long-term and large-scale application of pesticides, the problem of pesticide residues and pollution has become increasingly serious, and it has become one of the important sources of agricultural nonpoint source pollution. Under the prevalent practice, only about 30 percent of the pesticide applied in farmland attaches to crops, and the remaining 70 percent diffuses into the soil and the atmosphere, resulting in increased 10 pesticide residues and derivatives in the soil, causing soil pollution in farmlands. This compromises the biodiversity in the soil and enters the human body through the food chain, drinking water, or the soil-plant system, eventually endangering human health. These problems have been officially recognized in recent policies (as elaborated in Paper 2 in this Compendium). Much of the needed change in input practices has been driven by the adoption of CSA. From 2014 to 2019, funded by the Global Environment Facility (GEF), China’s Ministry of Agriculture and Rural Affairs (MARA), and the World Bank jointly organized and implemented the China Climate-Smart Staple Crop Production Project (CSSCP). The CSSCP focused on the production systems of the three staple crops (i.e., rice, wheat, and maize), and 7,000 ha of demonstration areas were established in the main production areas, including Huaiyuan County in Anhui Province and Ye County in Henan Province, to carry out the wheat-rice and wheat-maize production systems with key technology integration and demonstration of emission reduction and soil carbon increase, innovation and implementation of supporting policies, and expansion and improvement of public knowledge, among others. The CSSCP project explored and integrated the CSA system. A new path for China’s green agricultural development was thus set, with the core purpose of carbon sequestration, emission reduction, and stable grain harvest. The CSSCP project integrated the concept of climate-smart agricultural carbon sequestration and emission reduction into the entire production process and optimized the production system and technology. The project focused on the demonstrations of five key technologies, including (1) precision formula balanced fertilization and mechanized high-efficiency fertilization, (2) precision application technology for pesticides and unified pest prevention and control, (3) farmland leveling and optimized irrigation, (4) CA and supporting the farming system, and (5) comprehensive carbon sequestration technology for agroforestry systems. The CSSCP aimed to optimize the utilization efficiency of fertilizers, pesticides, irrigation water, and other inputs and the efficiency of agricultural machinery operations; promote water- saving, fertilizer-saving, pesticide-saving, land-saving, and energy-saving technologies; minimize carbon emissions from crop systems; and increase soil carbon storage. The project area’s accumulated carbon sequestration and emission reduction reached 129 kt of CO2-eq. The CSSCP Is based on using new crop varieties with high yield and strong stress resistance, optimized cropping structure, and improved agricultural infrastructure and other climate adaptability technologies. It optimized the agricultural production system's overall efficiency, sustainability, resilience, and adaptability to the changing climate; ensured agricultural production under extreme weather; and ensured stable and increased crop production. The demonstration areas applied new technologies, products, and models, including CA (discussed in the following section), fertigation technology, drone direct seeding for rice, self-propelled sprayers, electrostatic sprayers, paddy field duck and shrimp mixed farming, biochar, and green manure planting, among others. The average annual crop yield in the CSSCP project area was 6.7 percent higher than in non-project areas, the output value increased, and the average net income of farmers increased by 1.1 percent. The standard operating procedures compiled by the project team were included in the agricultural industry standards, including Climate-Smart Wheat-Rice Production Technical Regulations, Climate-Smart Wheat- Maize Production Technical Regulations, and Climate-Smart Crop Production Measurement and Monitoring Methods Regulations. Based on the project results and related international knowledge and experiences, a series of published knowledge products, such as the Theories and Modes of Climate-Smart Agriculture book series, promoted knowledge exchange and resource sharing. To close this section on a somber note, the pollution of cultivated land caused by industrialization in China is also severe, as industrial pollution accounts for a large proportion of solid waste pollution in the soil. According to the second national land survey published in December 2013, China’s moderately and heavily polluted arable land was roughly 3 million ha, and this part of arable land can no longer grow food. Most of the key areas affected by this type of pollution were distributed in the eastern and central regions, the Yangtze River Delta, the Pearl River Delta, and the old industrial bases in the Northeast, where the economy developed relatively fast in the past and industry is relatively developed. Near some cities in the Pearl River Delta, nearly 40 percent of the farmland and vegetable soils have excessive pollution. 11 1.2.3 Conservation Agriculture Conservation agriculture (CA, also known as conservation tillage) is one of China’s main approaches to sustainable agricultural development, especially CSA. Implementing no-tillage/minimum-tillage, straw returning, and stubble mulching can control soil erosion and sand dust pollution, improve soil fertility, and promote drought resistance and water-saving. At the same time, CA can significantly improve soil carbon sequestration, thereby effectively improving soil quality and productivity. It can and is playing an important role in maintaining food security and mitigating climate change. The technical details of CA deployment in China are extensively described in the background paper (He and Jiang 2021) and are, for brevity, not reproduced here. Since the 1990s, China’s CA research and demonstration work has developed rapidly. In the arid areas of Northwest China, CA technologies such as minimum-tillage and no-tillage direct seeding and soil organic cover have been promoted and widely adopted. In the irrigated two-cropping area of North China, the recycling of wheat straw, summer maize no-tillage seeding, and mulching technologies have been vigorously developed. The demonstration and application of maize ridged cropping and stubble mulching cultivation techniques have begun in the one-crop-a-year dryland farming area in Northeast China. In the rice-wheat and rice double-cropping areas of South China, the demonstration of CA technology has also been carried out with no-tillage mulching and light cultivation. At present, CA’s extension and adoption areas have exceeded 10 million ha. Due to China’s specific national contexts, such as large areas of multi - crop planting and insufficient large-scale agricultural machinery, China’s CA technology patterns and models are still different from other mainstream international technology models. China’s main crop production areas have a system of two or even three crops a year, and the machinery and equipment are mainly small- and medium-sized. In China’s CA technology model, the absolute no-tillage and straw- returning schemes still account for a relatively small share compared with the main international adopters of CA, so there is quite a way to go before the adoption of the techniques reach much of its potential in China. More support policies will be issued and further optimized for large-scale and rapid extension and adoption of CA in different agricultural regions of China (e.g., Northeast, Northwest, and North China). The support policies for CA include the ecological subsidy policy for CA application, the purchase subsidy policy for CA machinery and equipment, the tax reduction policy for CA manufacturing enterprises, and support policies for research institutions, among others. The “problemâ€? with CA from a green development perspective in China and elsewhere is that, since it is generally a more profitable approach to crop tillage than conventional methods, it is something of a stretch to claim it as a “new greenâ€? initiative that can really add to nationally -defined contributions to the mitigation of GHGs. However, while the lack of genuine additionality may be a technicality, CA is still a virtuous practice of value in terms of mitigation. 1.2.4 Livestock in Mixed Farming The combination of crop production and livestock, poultry, or aquaculture (mixed farming) is an agroecological pattern that closely connects crop and animal production. It is agriculture that uses manure produced by animal production as fertilizer for plant production; the plant production provides feed for animal production and utilizes some of its waste so that the material and energy are circulated between animal and plant production. Accelerating the development of circular agriculture with mixed farming is important to improve agricultural resource utilization efficiency, protect the agricultural environment, and promote the green development of agriculture. Rice mixed farming is a classic agroecological model in China. Through the culture of fish, shrimp, crabs, ducks, and other aquatic animals in the rice fields, the entire system makes full use of the farmland’s light, heat, water, and biological resources. Moreover, this model could increase farmers’ income and is conducive to food security, food safety, and ecological conservation. In recent years, the rice mixed farming model has rapidly developed and was applied nationwide, with significant ecological, economic, and social benefits. In 2020, the mixed farming and polyculture rice area exceeded 2 million ha nationwide. The main rice mixed farming and polyculture models include rice-duck, 12 rice-shrimp, rice-fish, rice-crab, rice-loach, etc. These models can effectively prevent insect pests, diseases, and weeds; minimize herbicides, insecticides, fungicides, and other chemical pesticides; and reduce environmental pollution. The weed control effects are significant; the rice-duck co-cultivation system could control 97 percent, and the rice-crayfish system could control 77 percent of weeds. Moreover, in the long- term rice-shrimp cultivation systems, insect pests have been significantly reduced, and several of the most- damaging species have been effectively controlled. The rice mixed farming system has been claimed to have reduced GHG emissions by at least 40 percent. Pig, cow, and poultry manure utilization technologies are widely used in China. The large and medium- sized breeding farms have grown rapidly in China, and the discharge of livestock and poultry farming manure reached 4.5 gigatons (Gt) in 2010. According to Chen, Yin, and Jiang (2021), in their consideration of local contexts and factors (e.g., natural conditions, economic conditions, breeding scale, environmental carrying capacity, etc.), multiple technologies and models have been adopted for manure utilization. These manure utilization technologies include rural household biogas technology, large- and medium-scale biogas engineering technology for intensive livestock and poultry farms, and manure composting technology to produce organic fertilizer to achieve the purpose of harmless reduction treatment. 1.3 Forest Ecosystems Forests are the largest areas in terrestrial ecosystems, with complex structures and functions. They provide many wood and non-wood forest products for human beings and have historical, cultural, aesthetic, leisure, and other values. They play an extremely important and irreplaceable role in maintaining biodiversity, protecting the ecological environment, mitigating natural disasters, and adjusting the global carbon balance and biogeochemistry circulation. In terrestrial ecosystems, forests are the largest repository of carbon in the world. At the end of the twentieth century, the world forest area was about 3.5 billion ha, accounting for 27‒29 percent of the land area. Some 2.0 billion ha of forests globally is in developing countries (Zhu and Li 2007). It is estimated that there used to be 6.5 billion ha of forest in the world, but it has decreased by 40 percent in the past 8,000 years (Zhu and Li 2007), of which nearly 2.0 billion ha is the direct result of human disturbance since the twentieth century. The main causes of the permanent disappearance of forests are deforestation, and conversion of forestland into agricultural land, animal husbandry land, new immigrant areas, infrastructure, dams, and reservoirs. Global forest area decreased by 129 million ha from 1990 to 2015 (FAO 2016). From 2000 to 2010, the forest area of tropical countries decreased by 7 million ha annually. The problem of forest degradation caused by the sharp decrease in forest area has triggered a global ecological and environmental crisis. To date, the global forest area is nearly 4 billion ha, of which China’s forest area is 220 million ha, playing a crucial role in ensuring national ecological security, building a “beautiful China,â€? and addressing climate change. Since 1998, with the initiation of China’s key forestry projects and the implementation of the overall strategy of ecological forestry, traditional forestry has been improved along a path to modern forestry and forest ecology. The industrial systems in China have been gradually established and improved, and the process of artificial forestation (both reforestation and afforestation) and forest recovery growth has been accelerated (Ma et al. 2019). However, some forest ecosystems are gradually degrading because of climate change and human interference. Forest ecosystem degradation refers to the process in which the original forest ecosystem is destroyed due to the interference of human activities (e.g., deforestation, reclamation, and inadequate management) or natural factors (e.g., fire, insect pests, large-scale landslides, etc.). 1.3.1 Forest Change and Trends in China According to the 2015 Global Forest Resources Assessment Report, China’s forest area accounts for 5.51 percent of the world’s forest area. The Ninth National Forest Resources Inventory from 2014 to 2018 surveyed 415,000 fixed sample plots, covering an area of nearly 10 million square kilometers (km 2). The results showed that China’s forest resources generally had a good development trend with increasing volume, steady improvement in quality, and continued enhancement in their ecological function. A pattern 13 was formed in which state-owned forests were dominated by public-welfare forests, collective forests were dominated by commercial forests, and timber supply was dominated by plantations. At present, the national forest coverage is 23 percent of the land surface, and of the 220 million ha of forest area, some 80 million ha is plantation forest. The total biomass of forest vegetation is about 19 Gt, and the total soil carbon storage is about 9 Gt. Natural forest refers to a forest that originated from a natural state rather than from artificial cultivation and recovered naturally after interference, including residual original forest or overcut forest, natural secondary forest, degraded forest, and sparse forest. The natural forest is the largest area of the forest ecosystem and an important source of wood and non-wood forest products (Liu, Ma, and Miao 2015). Compared with plantations, natural forests have higher biodiversity, a more complex community structure, more abundant habitat characteristics, and higher ecosystem stability. Before 1998, because of the long-term excessive logging and unreasonable management of natural forests in China, natural forest resources declined sharply, and ecological functions were severely degraded, resulting in serious ecological and economic consequences. Since the catastrophic floods in 1998, China has implemented the Natural Forest Protection Program (NFPP), with 2020 as the closing year of the second phase of the NFPP. According to China’s Forestry and Grassland Statistical Yearbook ( NBS 2018), as of 2017, China’s natural forest area was about 140 million ha, accounting for about 64 percent of the total forest area. Forest vegetation plays a vital role in soil and water conservation. Although the forest area and stock volume continue to increase, forest quality is not high, and the forest age structure is mainly young. The degradation or loss of forest vegetation changes the original microclimate environment and ultimately affects rainfall and evaporation, which might further aggravate the rate of forest degradation. For example, the degradation of the forest ecosystem in karst mountain areas has made the original ecosystem extremely low in self-regulation and compensation capabilities. Large areas of land have become exposed as stone and semi-stone mountains, and soil erosion has become more serious, thus further aggravating the process of rocky desertification. The degradation of the forest ecosystem leads to the deterioration of soil physical properties (i.e., soil texture, structure, porosity, etc.) and chemical properties (i.e., soil pH, nutrient elements, etc.), and the loss of SOM and nutrients, which is a serious threat to the sustainable development of forests. Also, birds, soil animals, and microorganisms may disappear because of changes in their habitats. 1.3.2 Forest Restoration Policy and Strategy Starting as a pilot in 1998, the NFPP as a full-scale program has already completed its second phase (2010– 2020). On July 23, 2019, the General Office of the Central Committee of the CPC and the General Office of the State Council issued the Plan for the Protection and Restoration of Natural Forests (PPRNF). This plan will be supported by a Natural Forest Protection and Restoration System Program, with a long-term vision until 2050. The program started in 2021 and is an extension of the NFPP, which will continue to play a leading role in restoring the degraded forest ecosystems in China. In parallel, there are some ongoing restoration programs for degraded forest ecosystems, including the Sloping Land Conversion Program (SLCP), Desertification Combating Program around Beijing and Tianjin (DCBT), Shelterbelt Network Development Program (SNDP), Wildlife Conservation and Nature Reserve Protection Program (WCNR), and the Industrial Timberland Plantation Program (ITPP). The restoration measures for forest ecosystems generally include closure management, natural regeneration, enrichment planting, artificial afforestation, and agroforestry, among others. The methods with the least interference should generally be chosen because this most resembles the natural recovery process, and, in addition, more intervention usually means a higher cost. Whether such endeavors in China have gone far enough is moot. Indeed, Li (2021) believes much bolder ambitions under the banner of forest landscape restoration should be urgently pursued. 14 1.3.3 Climate-Smart Agriculture and Agroforestry Farmland shelterbelts are a particular form of agrofor estry being actively conducted in many of China’s croplands and constitute an important agricultural infrastructure change program for carbon sequestration, soil and water conservation, pest prevention and mitigation, protection of biodiversity, improvement of soil fertility, improvement of air and water quality, and flood mitigation. The Three-Norths Shelter Forest Project is a large-scale artificial forestry ecological project in the Northwest, North, and Northeast China regions. Forest coverage in the project area increased from 5–10 percent of the area, covering 278,000 km2 of sandy land and 386,000 km2 of declared soil erosion areas. China’s agroforestry systems include diverse elements, such as the gum -tea system in the tropics; the mulberry-pond system, the low-lying agroforestry system, and the grain-sycamore intercropping system in the North China Plain; and the previously mentioned farmland shelterbelt system in the northern region. The productivity of the agroforestry systems is 10 percent higher than other comparable systems. The ecological, social, and economic benefits of including the forestry component in traditional systems are expected to be significant. Studies have shown that China’s agroforestry systems have significant carbon sequestration potential. China has extensive agroforestry systems in various regions. These agroforestry systems have improved water use efficiency and enhanced carbon sequestration potential. Agroforestry, therefore, has become an important measure for China’s food s ecurity and carbon sequestration. Efficient, stable, and diverse agroforestry systems can help increase land utilization, protect the environment, and increase carbon sequestration. Many studies have shown that agroforestry systems can positively change microclimates. For example, farmland windbreaks formed by trees and other plants can slow airflow, reduce water evaporation, improve the distribution and utilization of irrigation water in the system, and increase crop water utilization. Windbreaks have a buffering effect on air temperature changes and help reduce the high-temperature stress of crops or animals in the system. In China’s plains and main grain-producing areas, local governments have carried out tree planting and greening in residential areas, field roads, and both sides of channels. These agroforestry systems arguably have significantly increased the carbon sequestration ability of the local farmland and contributed to protecting crop production and improving ecological landscapes. 1.4 Grassland Ecosystems Grassland ecosystems are one of the five major ecosystems in the world. They are also the largest ecosystem type by area in China. China’s grassland area occupies nearly 400 million ha, accounting for nearly 42 percent of the total land area. They have an important ecological function in regulating climate, conserving water, fixing carbon, and preventing sandstorms, and they are China’s traditional animal husbandry base. They play an important role in safeguarding national food security and maintaining social harmony and stability. In recent years, because of climate change, industrialization and urbanization, increase in population pressure, and changes in land use, the grassland ecosystems have gradually been degraded, and their functions have been somewhat destroyed. Some 90 percent of grasslands in China have been degraded to different degrees. Reasons for the degradation of grassland ecosystems mainly include (1) excessive “reclamationâ€? of grassland for cropping, with the implementation of reclamation policies in the past century because of the food shortage resulting in large-scale grassland development; (2) overgrazing and grazing of livestock on a large scale led to more sparse vegetation on the surface of the soil and more serious environmental degradation; and (3) overharvesting of grassland medicinal materials that cause damage to the turf. Extreme degradation has led to the desertification of grasslands. The sheer size of the grassland ecosystems means that even small gains per unit area in, say, sequestration of SOC, can accumulate to significant decarbonization of the atmosphere. Surprisingly, these ecosystems have not been a strong explicit priority in China’s CSA efforts. 15 1.4.1 Geographical Distribution of Grasslands In terms of geographical distribution, the grassland area in the north of China is the largest, accounting for 41 percent of the total grassland area in China, in contrast to 38 percent in the Qinghai‒Tibet Plateau and 21 percent in the south of China. The grasslands in China’s traditional pastoral areas are largely concentrated through contiguous natural grassland, mainly distributed in Tibet, Inner Mongolia, Xinjiang, Qinghai, Sichuan, Gansu, and six other provinces (regions). The grassland area of these six pastoral provinces is 293 million ha, accounting for about three-fourths of the national grassland area. The Tibet Autonomous Region has the largest grassland area (82 million ha), accounting for 68 percent of its total land area. The Inner Mongolia Autonomous Region has the second-largest grassland area (79 million ha), accounting for 69 percent of the region’s total land area. Xinjiang Uyghur Autonomous Region has the third- largest grassland area (57 million ha), accounting for 35 percent of the region’s total land area. Grassland in southern China is mainly in the mountains and hills, with approximately 67 million ha. From the 1990s to the beginning of the twenty-first century, the grassland area increased in Qinghai, Jiangxi, Ningxia, and some other provinces but decreased in most other provinces. Overgrazing and grassland reclamation are the main factors leading to decreasing grassland areas. More than 48 percent of the 1.19 million ha of grassland from 2000 to 2005 was “reclaimedâ€? as farmland. However, the grassland in some areas has been subsequently restored by returning farmland to grassland. Overgrazing has led to the reduced primary productivity of forage, and thus, of the animals that graze it and the levels of SOC under the pastures. Following the easing of stock numbers, the natural grasslands in China have shown signs of recovery, but it is far from being restored to their former productivity. In 2018, for instance, the total output of grass in natural grasslands was 1.1 Gt, an increase of about 3 percent compared with that in 2017. During 1982‒2002, the annual increase rate of net primary productivity (NP P) in Inner Mongolia grasslands was about 3 g/m 2 of carbon ) per year. Studies on grassland productivity in southern China documented that the average NPP for carbon is up to 320 g/m2 per year, with an increasing trend year by year. 1.4.2 Change in Grasslands Carrying capacity is often discussed as actual carrying capacity, especially relative to theoretical carrying capacity, commonly expressed in standard sheep units. Theoretical carrying capacity refers to the number of grazing heads that can make livestock grow well and reproduce normally in a certain grassland area, which is an important index for evaluating grassland productivity. Research studies have assessed the theoretical carrying capacity of grassland in Inner Mongolia in 1997 at 46 million sheep units, while the actual grazing use was 92 million sheep units, giving an overstocking rate as high as 102 percent. Degradation is a direct consequence of overstocking. From 2005 to 2013, the annual average actual livestock carrying capacity of natural grassland in China was 310 million sheep units (MOA 2014). More than 50 percent of the actual livestock carrying capacity of natural grassland in China was mainly distributed in Inner Mongolia, Sichuan, Xinjiang, Qinghai, Tibet, and other key pastoral areas, among which Inner Mongolia had the highest actual livestock carrying capacity of 44 million sheep units. The actual annual carrying capacity of natural grassland has not changed significantly in the past 10 years, but the theoretical carrying capacity has increased significantly. The overload rate gradually decreased from 40 percent in 2005 to 17 percent in 2013; the average overload rate in the past 10 years was 30 percent. Excessive grazing of natural grassland in China has thus been alleviated to a certain extent, but the overload rate is still more than 20 percent, and consequently, the degradation of natural grassland continues. In 2016, the average livestock overload rate of the national key natural grassland (the natural grassland distributed in the north and west of China, which is also the traditional grazing grassland concentrated area, involving a grassland area of 337 million ha) was 12.4 percent, that is, a decrease of 1.1 percent compared with that of the previous year. By the end of 2018, the average livestock overload rate of key natural grasslands in China was 10.2 percent, 1.1 percent lower than that in 2017. These progressive reductions in overstocking constitute slow but seemingly steady elements of the needed greening of Chinese agriculture. 16 1.4.3 Impact of Degraded Grassland Ecosystems Desertification is one of the main forms of grassland ecosystem degradation and an extreme form of grassland degradation. Li (2021) treated such lands in China and arid and mining-damaged areas as separate ecosystems for review, but here, for brevity, they are treated as just one composite of grassland ecosystems. Desertification is mainly caused by wind erosion and overgrazing in arid and semi-arid areas. Because of the large-scale desertification and grassland degradation, surface temperatures have increased, further intensifying desertification and degradation. Degraded grassland ecosystems negatively influence the composition (especially SOC), structure, and function of grassland soil and cause a decline in the ability of the soil to resist external disturbances (such as water and wind erosion), thus leading to further grassland soil degradation. Grazing is the most common, most complex in its effects, and most influential human-influenced disturbance in the grassland ecosystem. With increased grazing intensity or grassland degradation, the soil texture becomes coarser, the structure is destroyed, the soil is compacted, and air permeability decreases. The decrease in SOC content is extremely detrimental to the growth of grassland plants because plants have lower nutrient absorption rates from the soil. In turn, plants reduce their protection from extreme weather conditions. The degradation of the grassland ecosystem has led to the deterioration of the ecological environment, and the frequent occurrence of natural disasters has seriously affected the sustainable development of the society and economy of grassland areas. Nationally, more than 1 million residents of grassland areas may become ecological refugees in less than a decade. Degradation of the grassland ecosystem has decreased grassland productivity and grass quality, negatively impacting the quantity and quality of livestock products from grassland areas. 1.4.4 Grassland Ecosystem Policies and Strategies To maintain the ecosystem services of the grassland regions, the Grain for Green Project was initiated in 2000 to reduce or exclude grazing and restore reclaimed croplands in grasslands. By 2014, the restored grasslands in China had reached 100 million ha. The ecological environments of grassland areas in China are fragile and sensitive to climate change. In recent years, the Chinese government has paid increasing attention to protecting grassland ecosystems (Hou et al. 2019). To alleviate multifaceted environmental degradation, the Chinese government has launched several grassland ecological restoration programs and, since 2000, has invested substantial resources to address grassland degradation. A revised national Grassland Law in 2002 preceded a suite of grazing restrictions and associated compensation measures, such as the Grassland Ecological Subsidy and Award Scheme (GESAS) formalized in the 12th Five-Year Plan. GESAS was rolled over in the 13th Five-Year Plan with a strengthened full grazing ban and reward balance payments. In addition, the Chinese government has carried out the Work Plan to Promote the Grassland Protection System (Ministry of Agriculture 2016) and the National Plan for Recuperation of Cropland, Grassland, Rivers, and Lakes (2016‒ 2030) inter alia to conserve the grassland ecosystem. For instance, as Li (2021) reported, many of the grassland tasks under the latter were accomplished successfully. 1.5 Wetland Ecosystems According to the definition of the Ramsar Convention on Wetlands of International Importance, wetlands are areas with marsh or water, whether artificial or naturally occurring, where the water is either flowing or stagnant, either salty or fresh. Wetlands can also include marine areas where the depth of the water during low tide reaches a minimum of 6 meters. Wetlands include surrounding areas of the shores, riverbanks, and entire watercourses. The classification of wetlands includes marine wetlands, artificial wetlands, and inland wetlands. These groups can be further classified according to the type of water, such as fresh, brackish, alkaline, and saline water. Wetlands have important functions and value in flood control and disaster reduction, water resource regulation, environmental pollution mitigation, biodiversity 17 protection, and regional ecological environment maintenance. They underpin only a small part of the agricultural sector, which may explain why they are largely ignored in China’s CSA efforts. 1.5.1 Current Status and Trends of Wetland Degradation Over the past 50 years, wetlands in China have been constantly under serious threat of degradation. However, the rate of wetland loss decreased markedly, with a loss rate of 5,523 km2 per year from 1978 to 1990, 2,847 km2 per year from 1990 to 2000, and 831 km2 per year from 2000 to 2008. From 1978 to 2000, nearly all the natural wetlands lost (98%) were transformed into non-wetlands. After 2000, with the improvement of people’s environmental awareness and the strengthening of wetlands protection, the trend of decline in the area of wetlands has almost been curbed. During the 13th Five-Year Plan period (2016‒2020), China's wetland protection and restoration level were comprehensively improved, with an area of 2,026 km2 of newly-added wetlands and the protection share of wetlands surpassing 50 percent. The area of wetlands in China exceeded 530,000 km2 in 2020. Because of agricultural and industrial development, untreated “three wastesâ€? (watery liquids, solid residues, and gases) are directly discharged into wetland waters, seriously damaging wetland ecosystems. The latest data released by the Ministry of Ecology and Environment (MEE 2020) show that among 57 lakes surveyed and 1,610 monitored sections of the Yangtze River, Yellow River, Pearl River, Songhua River, Huai River, Haihe River, Liaohe River, and other rivers in Zhejiang, Fujian, Northwest China, and Southwest China, water quality was often low. The Yellow River Basin, Songhua River Basin, Huaihe River Basin, Haihe River Basin, and Liaohe River Basin were lightly polluted. In addition, China’s wetlands are frequently polluted by trace metals, organic matter, and microplastics, and the polluted areas include the bottom mud, water body, and soil. The decline in wetland areas, the change in hydrological conditions, and the pollution of wetlands will affect the habitat of wetland organisms and lead to biodiversity loss. Fragmentation of specie’' habitats will also affect the reproduction and survival of species and the flow of genes in the wetland ecosystem. For example, in the Yellow River Basin, aquatic biological resources in the watershed have decreased significantly because of the shrinking wetland area and overfishing by humans. Some 15 percent of fish species are threatened, and many are critically endangered. In the Yangtze River Basin, natural fishery resources have been severely declining. 1.5.2 Wetland Ecosystem Policies and Strategies China has been fulfilling its obligations as a contracting party to the Convention on Wetlands since it joined in 1992. The protection and rational use of wetlands have become a priority action promoted by the Chinese government under the overall goal of sustainable development (Yin 2003). During the 13th Five- Year Plan period, the Chinese government restored a large number of degraded wetlands and introduced some new regulations, such as the Wetland Protection and Restoration System Plan issued in 2016 and the Decree on Strengthening the Protection of Coastal Wetlands and Strictly Controlling Reclamation issued by the State Council in 2018. Successful examples of restoration of typically-degraded wetland ecosystems include the Yellow River Delta Wetland, Loess Plateau River Wetland‒Qianhu National Wetland Park in Shaanxi Province, and Qilihai Wetland. 1.6 Aquatic Ecosystems Like wetlands, aquatic ecosystems are afforded little explicit attention in China’s CSA efforts in aquatic and marine “farmingâ€? systems. The most prominent concern has been the promotion of energy-saving and emission-reduction technologies in aquaculture. 18 1.6.1 River and Lake Ecosystems China has many rivers. More than 50,000 named rivers have a catchment area of more than 100 km 2, and more than 1,580 rivers have a catchment area of more than 1,000 km 2. Rivers have important ecological service value and rich biodiversity. Rivers are corridors for the circulation of water, sand, silt, nutrient elements, and other substances in their basins. The total length of rivers in China is 420,000 km. The riparian wetland area accounts for some 21 percent of the total wetland area, with important ecological service value and rich biodiversity. Riparian wetlands are important natural resources. They provide a variety of resources for human life and have important environmental functions and benefits. The degradation of aquatic ecosystems has attracted national attention. Ecological protection and restoration of key ecological areas of the Yangtze and Yellow Rivers have been incorporated into the country’s nine major ecological protection and restoration projects. However, the restoration of aquatic ecosystems in China has been carried out only recently, and most of the restoration of freshwater ecosystems has limitations, especially the lack of sufficient ecosystem technologies to support restoration. With the rapid development of China’s economy and rapid population growth in recent decades, the water demand for industrial and agricultural production and human life has increased. Rivers play an important role in the development of industry and agriculture. However, river pollution has become more serious because of the direct discharge of sewage and inadequate river protection. At present, the viability of most of the rivers has been weakened in terms of sewage treatment and pollution dilution. The pollution of rivers is usually coupled with the eutrophication of water bodies. The essence of eutrophication is when the increase in nutrients, such as N and P, changes the river from “grass typeâ€? to “algae type.â€? The excessive input of nutrients, such as N and P, exceeds the water body’s self-purification threshold, and eutrophication is further aggravated. In addition, because of the low-lying terrain of rivers, pollutants, such as trace metals, fertilizers, and pesticides, produced by human activities can enter the water body through surface runoff, groundwater, and other channels, making the river ecosystem a gathering place for these pollutants. In the 1950s, the annual freshwater fishery output in the Yangtze River Basin in China was about 500 kt. However, because of the aggravation of pollution and the overexploitation of water resources, the annual output of freshwater fisheries in the Yangtze River Basin dropped by nearly one-half from 1954 to 1970, and such an output drop continues even now. Because of reclamation, 2,500 ha of the water surface was reclaimed in Dianchi Lake in 1970. Most of the reclaimed areas were shallow-water areas where indigenous fish had bred and foraged. In China’s Dongting Lake area, the fish catch output across the entire lake area in 1949 was 30 kt per year but is now just about 11 kt per year, a decrease of 63 percent. The main economically-important fish harvested are becoming younger and smaller. To meet the demand for the development of the social economy, large-scale dams on rivers to intercept river water flows (for power generation, irrigation, flood control, etc.) are some of the most significant, widespread, and serious concerns for which the ecological environment of the river (including siltation of reservoirs) is negatively affected by human activities. In China, the cascade of reservoirs on major rivers, such as those in the Yangtze River and the Yellow River, is proceeding at an alarming rate. The lack of effective management of some rivers has caused river dry-up and serious water pollution, which seriously affects the structure and function of river ecosystems. The use and development of rivers across China to construct roads, streets, commercial squares, residential areas, etc., usually cause small natural creeks to be buried or underdrained, with the natural gentle slope of the original river being hardened into vertical banks. Overall, the fast development of the social economy in China has brought about huge negative impacts on its river ecosystems in recent decades. According to Yang et al. (2011), more than two-thirds of the lakes in China were polluted by nutrients such as N and P, and 10 percent of the lakes in China were seriously and steadily eutrophied. For instance, the eutrophication of Dianchi Lake in Yunnan Province became more and more serious, and the yield and quality of the crops around Dianchi Lake declined. It also adversely affected fish populations and harvest. China is one of the countries with the largest number of lakes globally; there are 2,573 natural lakes with an individual area of greater than 1.0 km2. They have the common characteristics of large area, wide 19 lakeshore width, shallow water, short water exchange cycle, high interference and intensity of human economic and social activities, and, too often, eutrophication. 1.6.2 Marine Ecosystems A marine ecosystem is a diverse natural system composed of interacting groups of organisms and their environment in the ocean. However, with the development of China’s marine economy, the activities of developing and using the ocean have been increasing, resulting in increasingly serious pollution in China’s maritime areas and serious degradation of the marine ecosystems. In 2019, various departments of the State Council successfully implemented the Water Pollution Prevention and Control Action Plan and the Inshore Sea Pollution Prevention and Control Plan and improved the collaborative mechanisms to generate ideal synergism. Thus, as of the end of 2019, the cleanup of 602 “two types of sewage outfallsâ€? in coastal waters across the country had been c ompleted. More than 88,000 pollution discharge permits have been issued in all 11 coastal provinces and autonomous regions and municipalities. Especially since the 18th National Congress of the CPC, the government of China has greatly strengthened the conservation and restoration of marine ecosystems, especially by enacting relevant laws and policies such as the 12th Five-Year Plan for the Development of National Marine Undertakings . 1.7 Conclusions China has established resource conservation and environmental protection as its basic state policy and determined sustainable development as its national strategy. In the complicated status of global environmental change and the human-land relationship, the Chinese government attaches great importance to ecological and environmental protection. To achieve this protection, the primary goal is to avoid ecosystem degradation. Thus, China has already implemented several massive projects to restore the country’s degraded ecosystems and landscapes and made sev eral worthy achievements, although the challenges China faces are still enormous in this regard. China has a vast territory and diverse natural ecosystems, such as forests, grasslands, deserts, wetlands, rivers, lakes, and oceans, which have nurtured a wealth of biodiversity and supported a burgeoning human population. However, the progressive degradation of those ecosystems in the past few decades has deteriorated the country’s biodiversity and environment. To curb this continuing degradation, China has been carrying out several large-scale restoration and conservation programs to prevent and control the degradation of ecosystems and landscapes across the country. At present, the quality of China’s ecological environment is showing a steady and improving trend. The deteriorating trend of various natural ecosystems is being contained, and the stability of the natural ecosystems should gradually increase. The ecological functions and services in key national ecological areas have been steadily enhanced. For instance, national forest resources continue to grow rapidly. The deteriorating trend of the grassland ecosystem has been effectively curbed. The effect of soil erosion and desertification control is remarkable. The protection and restoration of rivers, lakes, seas, and wetlands have achieved encouraging initial results, and biodiversity protection has been accelerated. Furthermore, the Master Plan for National Major Ecosystem Protection and Restoration Project (2021‒2035) has been developed, and implementation has begun. Appropriate green efforts continue, but problems such as river dry-off, lake shrinking, and water pollution, for example, are still rampant. Forest coverage is far below the global average. Moderate and severely degraded grasslands still account for over one-third of the total grasslands. The biodiversity index is declining, and some rare and endemic species are critically endangered. China’s adoption of CSA has been a useful step for greening agriculture and is thus contributing to wider green ambitions and achievements. However, to effectively promote CSA, it is necessary to solve lingering problems such as insufficient management and cooperation within and between departments. The current agricultural subsidy policies and funds are managed in different blocks. Many departments have issued cogent policies (e.g., NDRC, MARA, the Ministry of Finance, Office of Comprehensive Agricultural Development, Forestry Bureau, etc.). Nevertheless, the proposed policy objectives and subsidy methods (e.g., cheap fertilizer) are not always consistent and sometimes even conflict. The decentralized and 20 fragmented policy mechanisms will directly lead to the inefficiency of subsidies and active interventions. China must take yet bolder and more harmonized approaches to greening its agriculture. In short, more policy analysis is required to clarify priorities and needed interventions across different levels of government, including access to resources to be applied. Such work may support the apparent prioritized focus on the forest, cropland, and grassland ecosystems, but perhaps relevant investments should be increased or accelerated? The reviews for this synthesis highlight the technologies used in China’s different ecosystems, but they present only limited insight s into how the technologies have been tailored to the needs of communities, large and small, when the investments were made. Although comment is limited in the reports, not all the technologies applied in the myriad of different systems would have been equally effective in terms of impact and sustainability. The experience to date can be reviewed so those technologies that ‘worked’ by producing positive, sustainable impacts can be revised as necessary and expanded in scope. Those interventions with little or limited impact can be contracted in scope and modified to improve their impact or canceled. Executing future actions based on such reviews would help ensure that the greatest net gains can be made from the central and provincial public investments in these worthy actions. Global experience in addressing environmental challenges by investing in appropriate changes in the different environmental systems shows that sustainable change is better assured if the communities that will be impacted by the investments and expected changes are active participants in the decisions, particularly decisions made in public investments and during the public investment period. While overview knowledge is typically held primarily by central authorities that provide most of the funding (and cover other costs), local knowledge and choice should be central ingredients in the mix of inputs in order to foster sustainable change and achieve a green agricultural future. 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Yin, H. 2003. “Reflections on Wetland Protection in China.â€? Wetland Science (1): 68‒72. Zhen, L., Ishwaran, N., Luo, Q., Wei, Y.J., and Zhang, Q. 2020. “Role and Significance of Restor ation Technologies for Vulnerable Ecosystems in Building an Ecological Civilization in China.â€? Environmental Development 34: 1‒19. Zhu, J. J., and F. Q. Li. 2007. “Forest Degradation/Decline Research and Practice.â€? Chinese Journal of Applied Ecology 18 (7): 1601‒9. 22 PAPER 2 Deepening Pollution Prevention and Control on China’s Farms Emilie Cassou, Gao Shangbin, Wang Quanhui, Zhang Keqiang, Zhang Weifeng, Liu Yaping, Yuyun Bi, Mu Xiyan, Hongyi Cai, and Yan Bai Synopsis Having grown too big to ignore, agricultural pollution has gained attention as a focus of national and agricultural policy, both of which have become increasingly focused on ecological outcomes. Together, changes in policy and sector circumstances have brought the pollution challenge to the point of containment without sacrificing the high levels of food security and dietary diversity the country values and enjoys. But China will need to move from containment to reversal to operate within ecological boundaries, foster “clear waters and lush mountains,â€? make climate stabilization possible, and role-model “ecocivilization.â€? Reversing agricultural pollution demands a still higher prioritization of —and commitment or leveraging of public and private resources—to green farming practices and technologies to the extent supported by proven and mature technologies. But even in a best-case scenario, China will need to both strengthen its efforts and broaden its approach. It is not only how food is produced that needs to change, but also how much, where, and especially what food is produced and consumed that need to shift trajectories. Successful efforts to green agricultural modernization will likely run out of steam if not accompanied by changes in the food mix or “food shift.â€? Much depends not only on China becoming a leader in green farming but also on low-loss supply chains, environmentally-informed trade, animal-free eating, and agricultural landscape restoration. The latter is needed to withdraw the greenhouse gases that crop farming will continue to emit even after they are abated to the fullest extent allowed by technology. China’s “green agricultural modernizationâ€? efforts have helped it contain agricultural pollution in recent years. But to reverse it within the decade, China may need to set its sights on a new goal: perhaps one in which agricultural modernization is not environmentally remedied so much as reimagined. 2.1 Introduction: Food Security at a Cost 2.1.1 China Has Paid a High Ecological Price for the High Levels of Food Security and Dietary Diversity It Now Enjoys Decades of agricultural output growth and diversification realized with limited agricultural expansion have enabled China to enjoy high levels of self-reliance and food security. Between 1978 and 2019, China’s grain production more than doubled, while other food groups, though each produced in smaller volumes, saw vastly higher growth rates (Figure 2.1). 23 Figure 2.1: Crop Output in China, 1961–2021 Source: FAO 2021b If China’s agricultural output has largely kept up with population growth and the diversification of diets, it is largely because the sector has intensified by leaps and bounds. In the 50 years spanning 1970 –2020, China’s population grew nearly four (3.8) times faster than its arable land; 2 and crop production grew more than 16 times faster (World Bank 2021; FAO 2021). While the country gained close to 600 million people — a 72 percent rise—and produced about 2.8 billion additional tons of plant food each year —a 313 percent rise—its arable land expanded by just under 20 percent. Grain output tripled in volume over this period, fruit and vegetable production was multiplied by 19, and meat and milk production grew by more than 10 and 20 times, respectively (FAO 2021). But both the size and the intensity of China’s farm sector have put pressure on the country’s ecosystems and natural resources, and today, while other economic sectors have also left a mark, China bears the scars of agricultural pollution. The pollution problems accompanying the sector’s growth, intensification, and diversificat ion have been no less remarkable, both in scale and scope. Agriculture has been the country's leading source of water pollution and one of the main drivers of soil quality loss. The sector is also a critical source of several biosecurity risks ranging from zoonosis and unsafe food to developing drug-resistant bacteria. Although its emissions are overshadowed by those of other sectors, agriculture is a significant contributor to air and climate pollution. And through its heavy reliance on pesticides and plastics, agriculture is implicated in introducing into the environment “novel entities,â€? chemical compounds whose cumulative and aggregate effects are a source of public health and ecological uncertainty and concern. China now has one of the world's largest and most severe agricultural pollution footprints. While this situation is partly attributable to China’s large population and size, it is also owed to its farming choices and practices. China is among the largest and the most intensive users of fertilizers and agricultural plastics globally. It also raises more livestock, generates more manure, irrigates more paddy, and burns more crop residues than any other country.3 And it is among the world’s major users of pesticides, antibiotics, and animal feed. Together, these and other realities have contributed to extensive water eutrophication and 2 FAO defines arable land as areas under temporary crops, temporary meadows and pastures, and temporary fallow. Arable land does not include land that is potentially cultivable but is not normally cultivated. 3 The term livestock includes poultry in this paper. 24 soil pollution and the emergence of drug-resistant pathogens. They have also made the sector an important driver of climate and biosecurity risk. 2.1.2 Agricultural Pollution Has Moved from a Phase of Growth to One of Containment Over the past decade, the challenge of agricultural pollution —having grown too big to ignore—has captured significant policy attention in China, leading to some progress. D iffuse and multiform, China’s agricultural pollution problem was long overlooked, allowing it to grow to worrisome proportions. But in recent years, agricultural pollution has gained public sector recognition at the highest levels of policymaking, bringing about notable efforts to contain it. Since it was revealed that agriculture was the leading cause of water pollution just over a decade ago, pollution has become a higher priority of agricultural policy. It is now clear that China wishes to match, in “greenness,â€? its feat of feeding 20 percent of the world with less than 10 percent of its arable land. Currently, multiple forms of agricultural pollution are being addressed with some success at multiple levels of government, using various combinations of “ca rrots and sticks.â€? With higher levels of public resources and attention mobilized, China has succeeded in making substantial progress in short order. China’s achievements in pollution prevention and control may also reflect the country’s trajectory and changing circumstances to a certain extent. Population growth has fallen under 1 percent per year, which has likely caused growth in food demand to slow. This change, in turn, has lessened pressure on the farm industry to further intensify—although eating patterns are still changing in environmentally-exacting ways. It is also the case that the diffusion—the adoption by farmers—of broadly polluting practices like the systematic use of chemical inputs, plastic sheeting, and others is largely complete. Some structural transformations of the sector are also far along. For example, although animal farming is still consolidating, industrial production methods have already swept the industry to a large extent, generalizing its use of confinement, drugs, and feed. While the development of rural infrastructure and services is ongoing, the penetration of commercially-supplied fuels, feed, and building materials has progressed enough that agricultural residues, once valued as resources, have already become waste streams. Circumstances such as these—together with a pattern of throwing ecological restraint to the wind in recent decades—suggest the possibility that agricultural pollution levels simply had no further to go. Regardless of the reasons, China has started to gain control over some of its agricultural pollution problems and even put some of them in reverse gear. Since 2016, for example, pesticide and fertilizer use has declined, and the most toxic pesticides have largely been rooted out. Plastic film use in agriculture has nearly plateaued; the recycling of crop residues, manure, and plastics has progressed by some measures; and livestock-related greenhouse gas (GHG) emissions have declined. In the meantime, farmers’ incomes have generally increased. 2.1.3 Pollution Remains a Challenge of National and Global Significance Notwithstanding signs of progress, agricultural pollution remains a challenge of local, national, and global significance. Agriculture was still the number one contributor to water quality impairment going into the 2020s and, at least in past years, responsible for major air pollution events that seasonally affect certain regions and cities. While water and air pollution have markedly improved in some respects (Yin et al. 2020), they remain at levels that put human health, wildlife, biodiversity, and valuable ecosystem resources at risk, alongside food output and quality. Animal production has gotten more efficient at breeding meat, but it is also one of the critical breeding grounds for infectious diseases, including zoonotic ones. The industry has recently been responsible for mass culling, foodborne disease, antimicrobial resistance (AMR), and heightened pandemic risk. 25 Agricultural pollution is also regarded as a national food security concern from a domestic perspective. China’s food supply situation has evolved dramatically in recent decades. The national grain supply has moved from a surplus situation to one of tight balance (Gao 2021). In this context, agricultural pollution has placed additional strain on a domestic food supply situation that authorities sometimes perceive as too tight for comfort. From the standpoint of food security, it concerns authorities that China is looking at increasing water and other resource constraints, pressure on the expanse and quality of arable land, and rising production costs (Buisonje et al. 2016 in Gao 2021). While agriculture has undoubtedly been undermined by the contaminants flowing out of other sectors, its contributions to water and soil pollution have rivaled those of households and industry. At a local level, agriculture has been known to substantially degrade specific ecosystems, landscapes, bodies of water, and watersheds. For all these reasons, agricultural pollution is seen as having the potential to detract from efforts to enhance not only food supply and self-sufficiency but also food and diet quality. It is also of domestic and international significance that China’s aspirations to become carbon neutral and the world’s model “ecocivilizationâ€? hinge on abating agricultural pollution. Even though agricultural GHGs are neither the largest nor the fastest growing in the country, they will need to be reined in if China is to honor its climate commitments. As per the President’s 2020 announcement, China aim s for its GHGs to peak by 2030 and decline, on net, to zero between then and 2060. Furthermore, given the urgency of the climate situation, it is notable that agriculture is the leading national source of nitrous oxide emissions and the second-largest source of methane (Climate Watch 2020), whose mitigation should arguably be prioritized to rapidly slow global warming. Both gases are more potent than carbon dioxide (CO2), and methane is more short-lived. While China’s success at mitigation is essential to pulling off global climate stabilization, cutting national emissions is also now considered a “core long-term goal of [China’s] socialist modernizationâ€? (in the Fifth Plenum of the 19th Party Congress 2020, as cited in Cheng and Pan 2021). Similarly, China’s ability to walk its talk on “ecocivilizationâ€?—a concept enshrined in China’s constitution and prominently featured in the national narrative—will not only be a big service to the country but also to the world. China’s agricultural sector is transgressing several so -called planetary boundaries, including but not only through its contributions to climate change. The concept of planetary boundaries comes from the framework originally developed by Rockström and coll eagues (2009) to define a “safe operating space for humanity.â€? The latter is defined with reference to major Earth system processes being disrupted by human activity. Of the nine planetary boundaries identified by the framework, at least four have already been breached: those relating to climate change, biodiversity, land-system change, and the nitrogen and phosphorous cycles. China’s agricultural sector has been particularly implicated in the disruption of the latter, known as biogeochemical flows, due to the vast quantities of nitrogen and phosphorus it uses. Indeed, a regionally-scaled analysis of the planetary boundaries recently found that China is using nitrogen and phosphorous at “transgressiveâ€? rates (Steffen et al. 2015). It also bears emphasizing that climate stabilization will scarcely be possible if China does not address its food-related emissions. China’s current food-related GHGs could already account for 13–19 percent of the 2050 target for global agriculture (Box 2.1). 26 Box 2.1:Global Food Sector Emissions are at Odds with Climate Stabilization Averting catastrophic climate change will require keeping global food system GHGs in check. The implication, according to the work of the EAT-Lancet Commission, is that stabilizing the climate will require limiting food production emissions to at most 5 gigatons of CO2e by midcentury while also offsetting its emissions with an increase in nature-based sinks (to attain or near net zero emissions) (Willett et al. 2019). 4 To put this 5 gigaton target in perspective, recent estimates of emissions from food production range from about 8.5–14 gigatons CO2e. These figures point to the need for a global abatement effort of 3.5–9 gigatons of CO2e per year. If left unchecked, global food-related GHGs could take over a large proportion of the economy-wide carbon budget thought to be compatible with keeping warming to +1.5°C or even +2°C over preindustrial levels (Clark et al. 2020). In fact, the projected rise5 in dairy or meat consumption would, on their own, make the Paris Agreement (or even less ambitious targets) impossible to achieve, even if every other part of the economy were to successfully decarbonize. From a national perspective, China’s current agricultural GHGs account for 13–19 percent of the global target for 2050, with estimates of sector emissions for 2017, 2018, or 2019 ranging from 667 to 967 million tons per year (FAO 2021; Climate Watch 2020; Crippa et al. 2021; Zhang, Xu, and Lahr 2022). China is now the largest emitter of GHGs from meat and dairy consumption, factoring in its domestic production and imports (IATP and GRAIN 2018). Furthermore, its per capita meat and dairy emissions are still much smaller than those of exporting countries, suggesting the possibility of further increase if consumption patterns converge. According to modeling by Kim et al. (2020), China’s food-related GHGs would increase by 82 percent over baseline were it to adopt the average consumption pattern of Organization for Economic Co-operation and Development (OECD) countries (derived from supplemental data).6 The study attributes this finding partly to the rise in meat and dairy intake. A related consideration is that some of China’s food consumption is, in a sense, transferring pollution, including but not limited to climate pollution, to other countries. Much of the pollution “exportingâ€? process occurs through the food trade. In 2020, China imported over USD 98 billion (CNY 623 billion) worth of food (UN Comtrade 2021), and some of that trade is in particularly impactful products. For example, China was the largest global importer of beef and pork in 2020, accounting for over 30 percent of global imports of each. At the same time, pollution is being exported from China by virtue of the transboundary nature of certain pollution problems. For example, China is the world’s leading emitter of gaseous ammonia , and more than one-fifth (23 percent) of it has been estimated to find its way over national borders each year, contributing to soil acidification and eutrophication in other countries (Zhao et al. 2017). China’s heavy use of drugs in land-based and aquatic animal farms also points to the implication of its agricultural sector in generating AMR, another crisis of global significance. Domestic and global stakes such as these raise important questions about the pace and potential for continued change. While the significant potential to further green the sector still lies in the wide-scale adoption of the best agricultural technologies and practices available today, any complacency in pursuing agricultural greening could quickly see improvements run out of steam. 2.2 Agricultural Pollution is Diverse and Diffuse Agricultural pollution comes from many sources and appears in many forms. It involves many physical compounds and implicates a wide range of natural resources and processes, as well as human values and 4 According to the EAT-Lancet Commission, the 5 Gt target corresponds nearly half of the allowable global emissions from all sources in 2050, consistent with the IPCC’s RCP2.6 and a 2°C temperature rise (Willett et al. 2019). To meet a +2°C target by 2030, Wollenberg et al. (2016) propose an annual emission budget of 6.15 –7.78 Gt CO2e for agriculture, an 11–18 percent reduction relative to business-as-usual emissions, though more than the estimated current emissions of ~5.0 –5.8 Gt CO2e per year. 5 Projected emissions from meat and dairy production from 2016 to 2050 are based on the FAO’s projections for global meat and m ilk production per category (beef, poultry, pork, milk, ovine, and “otherâ€?) and the FAO’s 2013 estimates for global emissions per category http://bit.ly/20302050. 6 Greenhouse gas emissions would rise by 135 percent if all 140 modeled countries were to adopt the average Organization for Economic Co-operation and Development (OECD) dietary pattern. 27 activities. Much agricultural pollution is also spread out over space and time, generated by multitudes of farms scattered across rural and peri-urban landscapes. In that respect, agricultural pollution broadly falls in the nonpoint source (NPS) pollution category, which is notoriously difficult to measure and manage effectively. In turn, these qualities of being diverse and diffuse have made agricultural pollution difficult to recognize and appreciate in its entirety. Without attempting to answer questions for which evidence is lacking, this section provides an indication of the nature, breadth, and significance of agricultural pollution in China by laying out its major impacts and risks. 2.2.1 Water Quality Impairment, Eutrophication, and Drinking Water Impacts Despite important improvements, water pollution remains a serious problem in China and agriculture is its main driver. As of 2020, over 86 percent of China’s monitored groundwater sources were deemed unfit for human contact by government standards (MEE 2021; China Water Risk 2021). Moreover, China’s groundwater has significantly deteriorated over time: in 2011, over 40 percent of groundwater sources met minimum standards. In comparison, China’s surface waters are in far better condition and generally improving. In 2020, six of seven monitored river basins met national targets, and the worst quality waters have almost been eliminated.7 And yet, nearly 17 percent of surface water was still considered unsafe for human contact.8 Though not alone, the farm sector is the main source of water quality impairment nationally. Water pollution is not agriculture’s work alone ; domestic and industrial sewage are other major sources. But agriculture remains the leading source of nutrient pollution. In 2017, the national pollution census showed that a decade after the first survey, agriculture remained responsible for more nitrogen and phosphorus emissions than other sources, like industry. The sector accounted for nearly half (47 percent) of national nitrogen emissions and over two-thirds (67 percent) of phosphorus emissions (Gao 2021). Agricultural sources of excess nutrients are primarily farmed animals’ feces (including those generated by aquaculture operations), fertilizer, and to a lesser extent, aquaculture feed and detritus. One of the major manifestations of agricultural pollution lies in the eutrophication of surface waters, China’s leading NPS pollution problem. Eutrophication occurs when bodies of water become excessively enriched with nutrients, causing an overgrowth of aquatic plant life and resulting in the depletion of dissolved oxygen and ecosystem destabilization. Eutrophication can eventually lead to hypoxic and sometimes toxic conditions that cause ecosystem species to die off, sometimes resulting in mass fish kills. The damage in China is widespread: about 85 percent of China’s monitored lakes and reservoirs suffered from eutrophication in 2018, and since the early 2000s, coastal eutrophication has also progressed rapidly (MEE 2019 in Gao 2021; Y. Wang et al. 2021). As of 2017, the livestock and aquaculture sectors were responsible for half of the national chemical oxygen demand (COD) in surface waters, a measure of eutrophication. Brought on by eutrophication, harmful algal blooms, also known as red tides and involving toxic algae, have also been on the rise in parts of China, like Fujian (Baohong et al. 2021). Agricultural pollution has also been implicated in the impairment of drinking water quality in rural areas. While the extent to which agriculture impacts health through drinking water contamination is difficult to quantify, recent evidence points to microbiological contamination being the leading problem with national drinking water, implicating the manure generated by livestock operations. Examples of waterborne pathogens shed by animals and can infect humans include bacteria like Escherichia coli, Campylobacter, and Salmonella; protozoa like Cryptosporidium parvum, and Giardia duodenalis; and viruses like rotavirus, adenovirus, and hepatitis E (USDA 2012). Other leading threats to rural drinking water safety in China are linked to the presence of arsenic, fluoride, microorganisms, and different forms of nitrogen, the latter two also being partly of agricultural origin. In agricultural areas where an abundance of fertilizer and manure nutrients are in circulation, it is common—or at least was in the recent past—for nitrate concentrations in 7 As of 2020, 77 percent of surface waters met grade I–III standards, and Grade V+ waters had all been but eliminated. 8 They did not meet grade I–III standards. 28 groundwater to exceed World Health Organization (WHO) drinking water standards (Zhang et al. 2015). 9 Other warranted health concerns come from the potential presence in untreated drinking water of toxic and endocrine-disrupting substances found in pesticides, plastics, pharmaceuticals, and aquaculture chemicals. Besides proximity to agriculture, the challenge in rural areas is that large shares of households meet their needs using decentralized and often untreated sources. 10 The vast majority of centralized drinking water sources meet basic safety requirements in China, and access to some centralized sources of water is widespread even in rural areas. Despite this, a high percentage of rural drinking water in China —possibly around one-third—may be from decentralized sources and untreated (Zhang et al. 2015). 11 According to a 2021 study that reviewed the evidence on the quality of drinking water across provinces from 2007 to 2018, only 51 percent of rural drinking water samples “qualifiedâ€? versus 85 percent in urban areas (T. Wang et al. 2021). Thus, drinking water quality remains “basicâ€? and a concern in many rural parts of the country (T. Wang et al. 2021).12 Water pollution of agricultural and other origins has also led to the wide impairment of aquaculture waters at considerable cost to the industry. Of the 16 million hectares of natural aquaculture waters that are subject to monitoring in China, 74 percent exceed inorganic nitrogen limits (nitrite, nitrate, ammonia), and 67 percent exceed phosphate limits. Significant shares also exceed limits for petroleum (40 percent), COD (17 percent), mercury (3 percent), and copper (3 percent) (Gao 2021). It is also the case that, between 2012 and 2018, nearly 1,400 major fishery pollution accidents were recorded in China, resulting in about USD 110 million (CNY 707 million) in direct economic losses and USD 12 billion (CNY 77 billion) in indirect losses (MEE and MARA 2020). Recorded accidents 13 had declined considerably in number and size since the early 2000s when the country was recording between 1,000 and 1,500 every year. Nonetheless, to underscore how substantial losses still are, China’s exports of all seafood products amounted to a value of about USD 18 billion in 2020 (UN Comtrade 2021). Furthermore, losses owed to fishery pollution accidents do not include the potential economic losses owed to missed trade opportunities and products selling at a discount compared to higher quality ones. 2.2.2 Land Pollution and Impacts on Crop Yields and Quality Like its water resources, China’s agricultural landscapes are affected by extensive soil pollution and degradation, some of it brought on by the sector itself. China’s farmland is about one-fifth polluted—heavily affected by organic and inorganic pollutants —and 40 percent eroded (Gao 2021). About 15 percent of China’s land is estimated to experience excessive nitrogen loading (Zhao et al. 2017), and over 13–16 million hectares of farmland have been polluted by pesticides, according to a survey by the Chinese Academy of Sciences (Yaping 2021). Microplastics have also become ubiquitous in soils across China, with the highest concentrations occurring in northern and Northwest China.14 9 Directly harmful to health in large enough quantities —exposure to nitrate being linked to methemoglobinemia and a higher risk of cancer—agricultural nutrients can also give rise to toxic cyanobacteria and algae when they lead to eutrophication and harmful algal blooms. 10 Nearly 92 percent of all centralized drinking water sources monitored at the county level or above in 2018 were essentially compliant (IPE 2019). As of 2020, about 95 percent of the overall population and 90 percent of the rural population utilized basic water services (World Bank 2021). 11 Up-to-date numbers on this phenomenon are lacking but this has been the case in the recent past (Zhang et al. 2015). 12 As of 2013, some 280 million people lacked safe drinking water in China (MEP 2013 in T. Wang et al. 2021). 13 The latter are mostly tied to the pollution-related loss of natural fishery resources. Fishery pollution accidents are recorded when fishery waters are affected by an exogenous pollutant, farmed species die, or water productivity declines (Mu 2021). 14 According to a 2021 study of farms across 19 provinces, plastic mulch film residues were found in soil samples across the country. They were detected at concentrations ranging from 0.1 kilograms per hectare (kg/ha) up to 325 kg/ha, the average concentration being 84 kg/ha. The highest concentrations were found in Xinjiang (231 kg/ha); and the next highest were found in Inner Mongolia (78 kg/ha) and Gansu Province (66 kg/ha). Samples revealing the heaviest level of plastic pollution were overwhelmingly located in the northwestern parts of the country (93%). 29 Healthy soils are among the foundations for productive farms and safe food. By undermining soil health, the agricultural sector has contributed to jeopardizing its own potential for success in these respects. Major agricultural sources of soil pollution include using fertilizer, plastic mulch, and pesticides and burning agricultural residues. The resulting pollutants have affected the quality of soils in various ways, including by causing its acidification and hardening and disrupting the communities of microorganisms that play essential roles in ensuring gas and nutrient exchange during crop production. Thus, the deterioration of soil quality has potentially impaired crops’ uptake of soil nutrients, negatively affecting c rop yields and quality. At the same time, soil acidification enhances the potential for crops to take up pollutants present in the soil, including heavy metals from industrial runoff, thereby introducing them into the food chain. This, in turn, can put human health at risk or lead to costly market rejections. By the first decade of the twenty-first century, over 15 million hectares of China’s cropland were considered heavily acidified, with a pH of less than 5.5;15 that area was one-fifth larger than that affected during the 1980s (Xu et al. 2018 in W. Zhang 2021). While the overuse of nitrogenous fertilizer is considered the leading driver of acidification, manure- related ammonia emissions and long-term use of certain pesticides have also been implicated. Meanwhile, the accumulation and the prolonged use of plastics on cropland raise concerns about its possible effects on soil function and food safety. Recent studies show that microplastics (0.1 –5 mm in size) and nanoplastics (<100 nm) can be taken up and accumulate in plants, potentially affecting b oth food safety and crop yields (Sun et al. 2020; Conti et al. 2020 in Cassou 2021). The implication is that agricultural plastics can be a source of pollution even when properly managed. 2.2.3 Air Quality Impairment The magnitude of air pollution in China is such that even a secondary contributor like agriculture cannot be ignored. Without being its main cause, agricultural activities contribute to poor air quality directly and indirectly. In particular, the methane and nitrous oxide emitted by chemical fertilizer, the methane and ammonia (nitrogen) emitted by livestock flatulence and manure, and pesticide spraying all participate — by interaction with emissions from diesel motors and other pollutants —in the formation of health- threatening smog and urban air quality deterioration. The burning of crop straws and residues also gives rise to acute local and downwind fine particulate pollution on a seasonal basis. Overall, air pollution in China is falling, yet still extensive. Air pollution remains a major public health concern in China, even though concentrations of fine particulate pollution have generally fallen since China adopted a national PM2.5 standard in 2012—especially around Beijing (Zheng, Yan, and Zhu 2020). A 2020 study published in the Proceedings of the National Academy of Sciences estimated that between 2000 and 2016, long-term exposure to air pollution killed nearly 31 million people in China (1.5 –2 million people each year) and sickened many more (Liang et al. 2020). According to a 2016 study, 83 percent of the Chinese population lived in regions that failed to meet the WHO’s PM2.5 standard—versus 32 percent of the world population (Liu et al. 2016).16 The problem is particularly pronounced in the northern parts of the country. Reduced air quality is associated with acute and chronic health risks, haze, short-term warming, and decreased crop yields. In China, surface ozone pollution is estimated to have reduced average national wheat yields by 33 percent, rice by 23 percent, and maize by 9 percent in 2016 –18, resulting in billions of dollars of economic losses (Feng et al. 2022). Exposure to fine particulate matter is also a known risk factor for cardiovascular and upper respiratory diseases, cancer, and premature death (US EPA 2021a; Li et al. 2020). In addition, its inhalation can cause acute irritation of mucous membranes in the eyes, nose, and throat, bringing about coughing, chest distress, tearing, and even bronchitis in severe cases. In China, exposure to high levels of PM2.5 has been associated with elevated lung cancer incidence and mortality (Li 15 Between the 1980s and 2000s, the pH of soil dropped by 0.5 units on average across China’s major croplands. 16 That standard, or “first interim target,â€? is 35 micrograms per cubic meter (µg/m3) annually. The actual target set by the WHO (2021) was much lower, at 10 µg/m3 and in 2021, the WHO lowered its standard to half that amount (5 µg/m3), to reflect updated evidence on the health risks of exposure. The updated standard for ozone (O 3) concentrations is 100 µg/m3 (8-hour mean). 30 et al. 2020). In parallel, ground-level or tropospheric ozone, which manifests as smog, impairs visibility (increasing the risk of accidents) and increases the risk of upper respiratory disease. Long-term exposure to ozone is a notable risk factor for developing and exacerbating asthma (US EPA 2021b). In addition, both fine particulate matter and ozone are short-lived climate pollutants. 2.2.4 Climate Change While agricultural GHGs are also overshadowed by those of other sectors, China’s agricultural sector emits about as much as the entire economy of Canada. Chi na’s agricultural sector was responsible for about 5.5 percent of China’s GHGs, or about 667 million tons of CO 2e, in 2019 (FAO 2021; Climate Watch 2020).17 Of note, this footprint excludes indirect emissions, like those relating to fertilizer and pesticide production and on-farm energy-related emissions. It is also based on what China produces domestically, not what it consumes. The sector’s footprint would be larger if it included the impacts of feed, meat, and dairy imports on the emissions of exporting countries, especially those experiencing tropical deforestation and landscape degradation like Brazil. Agriculture ranked fourth nationally, after electricity and heat, industry, and transportation (not counting indirect emissions). Agriculture is among the leading national emitters of the potent GHGs nitrous oxide and methane, both seen as near-term mitigation priorities. Agriculture was responsible for 63 percent of China’s 2018 nitrous oxide emissions, making it the largest national contributor to emissions of this long-lived GHG, which has 273 times the global warming impact of CO2.18 The sector’s share has decreased over time (down from 80 percent in the mid-1990s) because nonagricultural emissions of nitrous oxide have been rising faster than agricultural ones. Agriculture was also responsible for 27 percent of national methane emissions, a short- lived GHG with about 81 times the impact of CO2 on a 20-year time horizon (or 27 times its impact over 100 years).19 Formerly the leading national emitter of methane, the agricultural sector has been overtaken by the energy sector, whose methane emissions are rising faster.20 Overall, if agriculture was responsible for only 5.5 percent of national GHGs in 2018, the sector accounted for nearly 38 percent of national emissions of methane and nitrous oxide (Climate Watch 2020).21 The mitigation of these potent GHGs is considered an important avenue for mitigating near-term warming while structural changes to reduce fossil fuel dependence are undertaken.22 Overall, livestock, synthetic fertilizer use, and rice paddies are the largest sources of agricultural GHGs in China, in that order. On-farm energy use comes next if its emissions are counted in the sector total (Figure 2.2Error! Reference source not found.). Breaking down sector emissions by gas, methane leads the way (46 percent), followed by nitrous oxide (39 percent) and carbon dioxide (15 percent). 23 17 China’s overall carbon footprint is the largest in the world. As of 2019, China emitted an estimated 27 perc ent of global GHGs, more than all OECD countries combined in aggregate terms —though not in per capita or cumulative ones (Bloomberg News 2021). Emissions on agricultural land, including emissions from energy use and drained organic soils, accounted for 6.5 percent of national GHG emissions in 2018, or 792 million tons of CO2e (using the total reported by Climate Watch [2020] for the year 2018). 18 Both over 20- and 100-year time horizons. Global warming potential (GWP) is based on AR6 (IPCC 2021). 19 These GWP values are based on the IPCC’s Sixth Assessment Report 2021, and for methane, are given for the non -fossil kind. The GWP of fossil-based methane is slightly higher. 20 These ranges correspond to different data sources: Climate Watch (2020) and the EDGARv6.0_GHG database (Crippa et al. 2021). According to Climate Watch data (2020), agriculture accounted for 63 percent of national methane emissions and 27 percent of methane emissions in 2018. According to EDGARv6.0 data (2018), the sector was responsible for 54 percent for nitrous oxide and 34 percent for methane. 21 In comparison, the sector is not a leading source of CO 2 emissions. Agriculture accounted for about 1.1 percent of national CO 2 emissions in 2018 (FAO 2021; Climate Watch 2020). Excluding on-farm energy use emissions from the calculation, the sector accounted for only 0.12 percent of national CO2 emissions. 22 In that respect, one noteworthy trend is that if agricultural emissions have long been dominated by methane (and continue to be), nitrous oxide emissions have risen faster and fallen more slowly in recent years. 23 About 90 percent of sector methane is owed to enteric fermentation (50%) and rice paddies (40%). As for agricultural nitrous oxide emissions, 60 percent are owed to soil amendment practices—the application of synthetic fertilizer (52%) and manure (8%). 31 Encouragingly, agricultural GHGs may have already peaked in China, overall. After increasing for several decades, China’s farm-related GHGs declined between 2016 and 2019, consistent with the decline in chemical fertilizer use. According to Food and Agriculture and Organization of the United Nations (FAO) statistics (2021), agricultural GHGs peaked at 705 million tons of CO2e in 2016. Between then and 2019, they declined by 6 percent per year, returning approximately to their 2003 levels. The sector also recorded a decline in carbon intensity. That said, agricultural GHGs took an upward leap during the 1990s, and the increase has yet to be reversed. Meanwhile, the agricultural sector’s indirect emissions have been a source of continued emissions growth; and emissions from domestic food consumption have outpaced emissions from domestic food production (Zhang, Xu, and Lahr 2022). Figure 2.2: Emissions on Agricultural Land, by Source and by Gas Crop residues, Drained including organic soils Energy use burning (CH4 0.27% on farm and N2O) 15% 5% Rice paddies Enteric (CH4) fermentation 19% and manure (CH4 and… Synthetic fertilizer (N2O) 21% Source: FAO 2021 Note: CH4 = methane, N2O = nitrous oxide, CO2 = carbon dioxide24 2.2.5 Unsafe Food and Possible Health Risks of Cumulative Chemical Exposure One of the major vehicles for potentially harmful human exposure to agricultural pollutants lies in the consumption of unsafe food. Food can become unsafe when it is chemically or microbiologically contaminated, and agricultural pollution can contribute directly and indirectly to both. Major agricultural Another 18 percent arise from the decomposition of manure on pastures resulting from the grazing of livestock. Of note, these estimates are based on FAO statistics (2021) and estimates of sector emissions and their breakdown vary by source. 24 Crop residues: N2O emissions from the decomposition of nitrogen in crop residues left on managed soils and from the combustion of a percentage of crop residues burned on-site. Enteric fermentation: CH4 is produced in ruminants' digestive systems and, to a lesser extent, in non-ruminants. Manure: CH4 and N2O emissions from aerobic and anaerobic processes of manure decomposition, N2O emissions from nitrogen of manure left by grazing livestock on pasture. Rice paddies: CH4 from the anaerobic decomposition of organic matter in paddy fields. Synthetic fertilizer: N 2O from synthetic nitrogen additions to managed soils, including from the microbial processes of nitrification and de-nitrification taking place on the addition site (direct emissions) and after volatilization/re- deposition and leaching processes (indirect emissions). Not shown: emissions from forest and savanna fires, which account for <1 million tons of CO2e. Data are computed at Tier 1 of the IPCC (2021) guidelines for national GHG inventories. CO 2e values are computed using the IPCC Fifth Assessment Report global warming potentials, AR5 (IPCC 2014). 32 food contaminants include animal feces and their pathogens, drugs and heavy metals, pesticides, and plastics—most risks originating from animal production systems. In China and globally, foodborne disease is largely due to the microbiological contamination of livestock products. One study estimated that animal-source foods directly accounted for approximately 35 percent of the global burden of foodborne disease in 2010 (Li et al. 2019). 25 Dairy alone is conservatively estimated to contribute 4 percent of the global burden of foodborne disease and 12 percent of the animal-source food burden (Havelaar, Grace, and Wu 2020). It also bears noting that no intervention has effectively eliminated manure-borne pathogens from animals and food (Heredia and Garcia 2018). In China, the potential for harmful exposure to a range of agricultural pollutants in food may also be particularly pronounced with aquaculture products. A large share of China’s aquaculture products is thought to contain excessive drug residues, some of which harbor co-pollutants (Mu 2021). Notably, seafood grown in polluted waters is more likely to harbor toxins and pathogens, including ones brought about by harmful algal blooms and ecosystem degradation in general. 26 In addition, pesticide residues, including residues of chemicals banned for their high level of toxicity, like organochlorines, are commonly found in farmed seafood products (Mu 2021). And because many of them do not easily degrade, they can bioaccumulate in the fat of aquatic foods and later in the bodies of those who consume them. Two tangential biosecurity issues discussed in relation to animal production in the longer report on agricultural pollution in China (Cassou 2022) include the risks of zoonosis and AMR. With respect to the safety of plant-based foods, causes for concern besides their cross-contamination with animal pathogens include their potential to expose consumers to agriculture-related endocrine disruptors and carcinogens. Both pesticides and the polymers and chemicals used in plastic production can have these properties. Exposure to endocrine-disrupting chemicals can potentially increase the risk of cancer, infertility, thyroid dysfunction, congenital defects, behavioral disorders, depression, and reproductive health problems. It is promising that routine monitoring of food products for pesticide and other residues means that an ever-increasing share of food products has come to pass food safety standards in China. For vegetables, for example, the Ministry of Agriculture and Rural Affairs (MARA) reports that the “pass rateâ€? increased from 62 percent in 2001 to 97 percent in 2020 (MARA 2021b and other sources in Yaping 2021). In contrast, a growing food safety concern lies in the ubiquitous and sometimes heavy presence of microplastics in China’s homegrown food products (Box 2.2). Sources of these include plastic films used in crop farming, and sewage applied as fertilizer since it is often laden with nonagricultural microplastics. Many studies show that worrisome substances can migrate from soils into crops and the food chain. However, evidence on the extent of this phenomenon and its health effects is still emerging. Box 2.2: Long-Term Exposure to Substances Present in Plastics is Potentially Harmful to Human Health Many plastics may be chemically harmful in some contexts because they are potentially toxic or absorb other pollutants (Lithner, Larsson, and Dave 2011; Teuten et al. 2009; Rochman, Hoh, et al. 2013, all in Rochman, Browne, et al. 2013). Although polymers are generally thought to be chemically inert, plastics often contain unreacted monomers (building blocks of polymers) and other ingredients that can be harmful to health. More than half of plastic materials are thought to contain ingredients classified as hazardous under the United Nations’ Globally Harmonized System of Classification and Labeling of Chemicals (Lithner, Larsson, and Dave 2011). Studies have shown that some of these plastic additives can accumulate in the human bloodstream and that certain monomers and other plastic ingredients, including those of polyvinyl chloride (PVC), polystyrene (PS), 25 Accounted for in disability adjusted life years (DALYs) estimated by the WHO Foodborne Disease Burden Epidemiology Reference Group (FERG). The main pathogens contributing to this burden include non-typhoidal Salmonella enterica, Taenia solium, and Campylobacter spp. 26 When the aquatic environment becomes degraded by pollution, endemic pathogens that do not typically make fish ill can take over and become more virulent, even as aquatic animals become more vulnerable to infection. Examples include Aeromonas (Aeromonas sobria, A. hydrophila, A. punctata), Pseudomonas (Pseudomonas fluorescens, P. albicans, P. punctatus), and Vibrio (Vibrio alginolyticus, V. harveyi) (Mu 2021). 33 polyurethane (PUE), and polycarbonate (PC), can act as carcinogens and endocrine disruptors —notably, by mimicking estrogen (multiple sources in Rochman, Browne, et al. 2013). Some scientists have argued that some plastics should be classified as hazardous waste, creating the legal impetus for appropriate management (Rochman, Browne, et al. 2013). The full public health ramifications of chemicals that have become ubiquitous in the food chain and the environment have yet to be determined conclusively. In that respect, another cause for concern comes from the potential for pollutants at large—including but not limited to agricultural and foodborne ones like pesticides, plastics, and other chemicals—to have aggregate, cumulative, and synergistic effects on human health. The nature and extent of such impacts are clouded by uncertainty, but the safeguards in place to protect public health from harm do not currently account for pollutants’ potential to act cumulatively or synergistically. 2.2.6 Wildlife Health and Biodiversity Impacts In aquatic environments, wild and farmed species have been harmed by various forms of agricultural pollution, including pesticide contamination and eutrophication. Pesticide pollution is believed to have led to the heavy loss of frogs and fish in some parts of China and the almost complete disappearance of eels and loaches (Yaping 2021). In waters subject to nutrient pollution in China, eutrophication and unbalanced nitrogen-phosphorus ratios in mariculture areas have been important contributors to harmful algal blooms and an extreme decline in plankton biodiversity (Mu 2021). In general, pollution has been known to disrupt animals’ reproductive health, development, and growth and induce abnormal behaviors (Mu 2021). Even trace amounts of pollutants can have these effects, and over time, even sublethal problems can lead certain populations to dwindle and eventually become extinct. Pesticides, for example, can lead to this outcome by affecting animals’ fertility and survival rates. One consequence of eutrophication is that it favors small species over large ones less able to feed on sediment and organic detritus (Mu 2021). That said, eutrophication eventually kills off all the aquatic animals that live in an affected body of water by causing dissolved oxygen levels to decline. Since farmed species are similarly affected, in the context of aquaculture, the poor management of feed and fertilizer can come back to bite. Genetic pollution introduced by aquaculture activities has also affected wild aquatic populations. Indeed, aquaculture activities have been known to introduce invasive species into bodies of water to the detriment of native species. In China, for example, tilapia and largemouth bass have invaded the Pearl River, and crayfish have invaded most freshwater bodies across the country. Invasive species such as these tend to suppress and threaten native species quickly because of their strong competitiveness, and when they do, they can destabilize the original ecosystem, introduce new pathogens, and cause biodiversity loss. The genetic “erosionâ€? of wild species can enhance their vulnerability to pathogens. This erosion can occur when native species hybridize with introduced ones, a phenomenon observed in scallop populations (involving introduced Patinopecten yessoensis and native Chlamys farreri). Agricultural pollutants like pesticides have also taken a toll on terrestrial species in China. For example, while various stressors are believed to contribute to the decimation of pollinators in some places, pesticides have likely been implicated to some degree (Yaping 2021). Many pesticides in use in China’s fields are lethal to nontarget species, even in small doses. To illustrate, a single granule of carbofuran, an insecticide, can be lethal to small songbirds, the lethal dose being less than 1 milligram per kilogram. By the end of 2022, that pesticide will have been banned. In recent years, efforts to reduce pesticide use in China have enabled beneficial insect populations to recover in certain contexts. Such recoveries have, for example, been associated with pesticide control efforts in Anhui Province, where spiders have reportedly returned to rice fields, and in Zheijiang Province, where lacewings and spiders made a comeback in citrus orchards (Yaping 2021). A survey in Hunan Province showed that the number of fish, shrimp, frogs, and other animals is gradually increasing in rural areas, and the number of birds is increasing rapidly in the springtime (Yaping 2021). 34 Another significant threat to wildlife health lies in plastic pollution. Large numbers of animals are ingesting and becoming entangled in plastic debris both on land and in water bodies. Although their effects on wildlife remain largely unknown, scientists are sounding the alarm about rising concentrations of microplastics in water bodies. Multiple studies have revealed the widespread presence of potentially harmful microplastics in aquatic life in China’s freshwater environments (Fu et al. 2020). 27 While agricultural contributions to plastic pollution are not well known either, agricultural plastics may be particularly prone to contaminating wildlife habitats to the extent that they are typically short-lived, flexible, and used outdoors in open landscapes and rural settings where collection infrastructure and services can be inadequate. On land, another source of stress for both fauna and flora is air pollution. Ozone pollution, for which certain agricultural pollutants are a precursor, can negatively affect species diversity, habitat quality, and water and nutrient cycles (US EPA 2021c). In addition, wildlife is not immune to the detrimental health effects of particulate pollution, to which agriculture contributes directly and indirectly. 2.2.7 Farm Productivity and Rural Economy Impacts Estimates of the overarching economic impacts of agricultural pollution, or pollution in general, on the farm economy are lacking. Environmental issues at large cost China’s economy billions of dollars each year— possibly on the order of 10 percent of GDP (Maizland 2021). China’s Ministry of Ecology and Environment (MEE) estimated pollution to cost the economy roughly 3.5 percent of GDP in 2010. Even if that number has improved, and agricultural pollution is responsible for only a fraction of it, the gains from agricultural pollution prevention control are almost certainly large enough to justify more spending. 2.3 Agricultural Drivers of Pollution Multifaceted as it is, the challenge of agricultural pollution can be traced to a relatively discrete set of practices. Most of the pollution problems discussed in this paper stem from the broad categories of unsustainable farming practices discussed next—although some, like flooded rice paddy cultivation and the use of drugs in animal farming, are omitted. This section selectively highlights their scale and scope, major trends and drivers, and how they contribute to pollution. A more systematic overview is beyond the scope of this paper, but more information is provided in the full-length report on agricultural pollution (Cassou 2022). 2.3.1 Livestock Rearing and Waste As the world’s largest animal farm, China is by far the largest producer of manure in the world today. In 2019, the country’s farmed terrestrial animals excreted an estimated 12.4 million tons of nitrogen from manure. At this rate, China generated roughly 5 percent more nitrogen from manure than India, 12 percent more than Brazil, 48 percent more than the European Union, and 77 percent more than the United States, the next four largest producers globally (FAO 2021). 28 Animal waste, particularly when exposed to the elements and released into the environment untreated, is a source of air, water, soil, and climate pollution. Livestock waste is the second-largest source of nutrient pollution nationally. Its nitrogen and phosphorus emissions closely trail those of the entire crop sector. The 2017 census of pollution found that livestock manure (including manure from poultry) accounted for 38 percent of national phosphorus discharges and nearly half (47 percent) of national COD —again, a measure of eutrophication. Manure also accounted for 11 percent of national ammonia emissions, the largest share nationally. Livestock waste is also the leading 27 As of 2016, the average density of floating microplastics in the surface waters of the Bohai Sea, the East China Sea, and the South China Sea is 0.29 per cubic meter (m3), and the highest is 2.35 per m3 (Yixiang et al. 2018). 28 Nitrogen excretions are not a perfect proxy for manure, and herd composition varies by country, but they are reasonable bases for comparing the magnitude of manure volumes generated across countries. 35 source of nutrient pollution in some local contexts. In the Lake Tai catchment, for example, livestock waste was recognized as the main cause of water eutrophication, accounting for 32 percent of total phosphorus (TP) and 23 percent of total nitrogen (TN) discharged into the catchment at one point in the past (Zhang et al. 2004 in K. Zhang 2021). As noted, livestock waste is also the leading source of foodborne pathogens. Food-producing animals and their manure are the major reservoirs for many foodborne pathogens, such as Campylobacter species, non- Typhi serotypes of Salmonella enterica, Shiga toxin-producing strains of Escherichia coli, and Listeria monocytogenes (Heredia and Garcia 2018). These and other pathogens are a particular concern when manure is discharged untreated in the vicinity of drinking water sources or used to fertilize fruits, vegetables, and other food crops. The livestock sector is also the leading source of agricultural GHGs in China. In 2019, it accounted for 47 percent of sector emissions (FAO 2021), excluding farm-related energy emissions. Factoring in indirect emissions related to feed production, grassland degradation, and forest clearing for grazing and feed production—the latter occurring primarily in Latin America —inflates emissions from animal production even further. While enteric fermentation accounts for a little over half of the livestock emissions in China, manure is responsible for most of the GHGs emitted by the production of pork and poultry, China’s preferred meats. Growth in meat and manure—or herd size and emissions—has gone hand in hand with the livestock industry’s concentration and intensification. Large-scale and intensive animal production systems thrive in China, generating ever-rising volumes of product and manure and sewage (Gao 2021). At the same time, the fragmentation of crop and animal farming has potentially exacerbated the problems caused by livestock waste. As of 2020, more than 70 percent of the agricultural parks in China were practicing only crop or animal production (K. Zhang 2021). Although large-scale animal farms predictably generate voluminous cesspools of manure, only a minority of livestock operations were planned in a way that reflects an intent to integrate them with crop farming. The livestock pollution situation has not been static in China, and efforts have been made on multiple fronts to manage the impacts of livestock and their wastes in recent years. Notable advances have been made in breeding, feeding, and waste recovery and treatment technologies. Among other things, China stands out for its relatively wide adoption of biodigesters to treat animal waste. However, experience from the Netherlands, which is home to one of the most intensive, regulated, and modernized livestock industries globally, offers a cautionary tale. Despite being subject to extensive and stringent environmental regulations, and supported to adopt state-of-the-art practices and technologies, the livestock industry’s pollution footprint has been unmanageable, and the government is now looking to reverse its growth and intensification. 2.3.2 Aquaculture and Water Management While aquaculture is not a leading source of agricultural pollution overall, it is a major contributor to surface water pollution downstream of areas where the industry is highly developed, particularly in southern China. In 2017, the industry was responsible for about 6–8 percent of agriculture sector-wide nutrient emissions and COD. Aquaculture pollution results both from the industry’s use of inputs and its management of wastewater. Inputs into aquaculture include feed, drugs, and a variety of chemicals. While these contribute to the endogenous pollution of aquaculture waters, their discharge also pollutes downstream bodies of water, potentially affecting other aquaculture operations and farms. Most inland farms regularly release large volumes of wastewater. In addition, the escape or release of farmed animals into the wild can cause a form of genetic pollution, impacting wildlife and ecosystems in surrounding waters. China’s aquaculture industry has scaled to an extent and moved in directions that have t ested or exceeded environmental carrying capacity. Between 1978 and 2019, aquaculture production in China increased 40- fold, growing about 3 ½ times larger than capture fisheries’ output (Mu 2021). Aquaculture is considered 36 a source of “high-qualityâ€? protein and an important source of agricultural sector jobs and income (Gao 2021). For this and other reasons, the government has heavily promoted the sector’s development since the 1980s. By 2019, the industry produced nearly 51 million tons of seafood, over 60 percent of the world’s total. While this scale-up has also expanded the industry’s environmental footprint, the latter has also been widened by the development of high-density fish culture more reliant on inputs. The aquaculture industry has grown and gravitated toward intensive, large-scale, branded, and high- density production and embraced a high-input, high-output production model (Gao 2021). As a result, China’s expansive and crowded fish farms have seriously overloaded water bodies by releasing large amounts of residual feed, fertilizer, feces, dead fish, metabolites, drugs, and other chemical wastes. Aquaculture operations have contributed to widespread water quality degradation and eutrophication by overwhelming many water bodies’ capacity to self-purify. China’s water conservation efforts have not kept pace with the development of its aquaculture industry. Today, China’s aquaculture waters are seriously polluted, endangering the quality and safety of products and diminishing the productivity of aquaculture operations. 2.3.3 Fertilizer Use Although its fertilizer consumption has turned a corner, China remains the largest and among the most intensive users of these chemicals in the world. Chemical fertilizer use increased more than 75 times between 1961 and 2015, when it reached its high point (Figure 2.3) (FAO 2021). At its peak, China’s fertilizer application reached nearly one-third of the world's total. By 2019, total nutrient consumption had declined by more than 14 percent, reaching 47 million tons. At these rates of application, China was and remains the world’s largest consumer of nitrogen, phosphate, and potash. It is also the largest prod ucer of the first two. Figure 2.3: Fertilizer Use in China, 1961–2019 60 450 400 Total nutrients (million tons) 50 350 Intensity in kg/ha 40 300 250 30 200 20 150 100 10 50 0 0 1965 2001 1961 1963 1967 1969 1971 1973 1975 1977 1979 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2003 2005 2007 2009 2011 2013 2015 2017 2019 Total Intensity (right axis) Source: FAO 2021b Note: Fertilizer use is based on the consumption of the synthetic or mineral nutrients nitrogen (N), phosphorus (P 2O5), and potassium (expressed as K2O), and the intensity of fertilizer divides the total by the sum of arable land and permanent crop areas. The strong correlation between total fertilizer use and fertilizer-use intensity reflects the steadiness of the cropland area in China over time. China also still applies more fertilizer per hectare than most other countries. While the intensity of fertilizer use in China has also declined—by about 50 kilograms per hectare (kg/ha) in the space of a few years —it remains among the highest in the world (NBS 2020 in W. Zhang 2021). If in 1978, China applied only 65 kg/ha of fertilizer on average, by 2015, it applied nearly 600 percent more, or almost 450 kg/ha of it. As of 37 2019, it applied about 11 percent less, or 400 kg/ha. But in certain provinces, the fertilizer application rate was much higher—reaching nearly 700 kg/ha in Beijing, the province with the highest fertilizer-use intensity—although one of the smallest environmental footprints overall (W. Zhang 2021). A key problem with these levels of fertilizer use is that most of the nutrients applied to crops are lost to the environment. In China, some 67 percent of fertilizer’s nutrients may be lost to the environment every year, meaning that far less than half of the chemicals are actually helping crops grow (Gao 2021). 29 While challenging soils, rainfall, and population pressure are important factors, high rates of fertilizer use in China are also a reflection of low fertilizer-use efficiency (Box 2.3). Box 2.3: Low Fertilizer-Use Efficiency in China: Some Explanations Various practices and drivers have been implicated in low fertilizer-use efficiency in China. For example, soil testing and the use of fertilizer mixes well-matched to soil and crop needs have yet to be generalized. Moreover, only a minority of farms use more efficient fertilizer application methods like deep placement in the soil or sensor-linked drip fertigation. Drivers of such practices have likewise been varied. For example, many farms in China are short on labor as many farmers have taken to part-time farming to engage in nonfarm activities. Many have even moved off the farm, only to return occasionally. Many small farms also have limited capacity to invest in or utilize equipment that would reduce losses. On the market side, many farmers have a limited range of fertilizers they can select for purchase, limiting how well they can match nutrients to farmers’ soil and crop needs, regardless of their access and inclination to soil testing. It was recently estimated that as little as one-quarter of fertilizer products in circulation in China are a good match for the biophysical needs of crop production (W. Zhang 2021). Another possible factor is that for smaller farms, the potential to realize savings by applying fertilizer more efficiently has been too small to be motivating. Consistent with this hypothesis, some studies show that larger farms tend to pay more attention to limiting fertilizer overapplication than smaller ones. The implication is that fertilizers have been a double-edged sword, increasing crop yields and output but causing serious damage to farmland, watersheds, and entire ecosystems. In the Chinese context, synthetic fertilizer is considered a cornerstone of the country’s agricultural achievements over the past several decades and vital to its continued food security. But the wasteful use of fertilizer has led to wide-scale water eutrophication, soil acidification, and other problems already documented. Fertilizer use has also overtaken rice as China’s leading source of crop-related GHGs. Meanwhile, if fertilizers contribute mainly to nutrient pollution, they are also a source of heavy metal and microplastics contamination. Indeed, fertilizers often contain trace amounts of components like arsenic, cadmium, chromium, mercury, and lead, which, over time, can accumulate in soils. Above certain concentrations, they can impair crop health. On another note, recycling sewage sludge as fertilizer in China has proven to be a vehicle for microplastic pollution. Compared to nutrient emissions in animal production, however, those resulting from crop production can be drastically reduced through changes in farming practices and technologies. Many studies, including very large-scale ones, have documented high rates of nutrient pollution across China’s various farming systems and ample potential to cut fertilizer applications without compromising yields and saving farmers money on input expenses. 2.3.4 Pesticide Use China has made significant progress in moderating the use of pesticides in recent years. As of 2019, China was the third-largest user of pesticides globally as well as one of its leading producers. However, it was no longer the largest or among the most intensive users of these chemicals. 29 Utilization efficiency ranges from about 30–50 percent for nitrogen fertilizer, 10–20 percent for phosphate fertilizer, and 35–50 percent for potash fertilizer (Gao 2021). 38 In both absolute and relative terms, China’s pesticide use peaked in the early 2010s and has been in decline ever since. Official statistics indicate that overall pesticide applications made a U-turn after 2013 and, by 2019, had returned to roughly the level recorded in 2004, that is, around 273 thousand tons of active ingredients (China Agriculture and Forestry Database, FAO 2022). 30 In terms of intensity, China applied an average of 2 kg/ha of active pesticide ingredients to its cropland in 2019 (FAO 2022). In comparison, Israel, Japan, and the Republic of Korea applied in the range of 10 –15 kg/ha, while rates of 4–6 kg/ha were seen in Brazil, Chile, and Malaysia; 2–4 kg/ha in the European Union (EU) and the United States; and 1–2 kg/ha in Thailand and Vietnam (FAO 2022). Nonetheless, China’s level and intensity of pesticide use remain environmental and public health concerns , especially in parts of the country where it is the most intensively used. Pesticide applications are well above the national average in fruit and vegetable-producing areas, and heavy use is made in the south-central and eastern parts of the country. The application of pesticides has also been expanding in area terms. Part of the problem with pesticide use is that only a fraction of these intentionally toxic chemicals end up where they are destined to go, creating a risk for nontarget organisms. In that respect, pesticide harm has likely been exacerbated by challenges with pesticide quality and application methods. One issue is that most pesticides for sale in China (around 80 percent) have been on the market for over 15 years, suggesting a likely loss of efficiency (Yaping 2021). Another issue is that more efficient application equipment, which can help mitigate losses, food contamination, and bykill, has not become the norm in China. That said, pesticides vary dramatically in their toxicity and longevity in the environment and their effects on nontarget organisms. From that perspective, pesticide risks have shifted along with the mix of chemicals in use. China’s pesticide use has declined in volume and toxicity even as the uses and functions of pesticides have qualitatively shifted. Herbicides and fungicides have gained prominence relative to insecticides, and highly toxic and persistent insecticides like organochlorines were eliminated from crops in the 1980s, giving rise to more moderately hazardous substitutes. By 2021, about 80 percent of the pesticides used in China were “highly effective, low-toxicity, and slightly toxicâ€? pesticides, according to a MARA researcher ( Yaping 2021, 43). Another problem with pesticide use—of direct concern to agriculture itself—is that it can breed pest resistance if it is not managed carefully, and in that respect, China also seems to have made substantial progress. In the past, pesticide resistance has led to devastating pest invasions in China. In 1992, for example, the cotton bollworm invaded more than 4 million hectares (60 million mu) of cotton fields in Jiangsu, Shandong, Henan, and other provinces, causing yield losses of over 50 percent in severely affected areas, and ultimately decreasing China’s national cotton production by 30 percent ( Yaping 2021). Today, while pesticide resistance remains a concern, similar situations rarely occur in China as the phenomenon is subject to more careful monitoring and management. Nonetheless, today’s widely used pesticides are far from innocuous. For example, of 85 pesticides known to affect the endocrine system, about 50 are registered for use in China, including dimethoate, cypermethrin, carbofuran, triadimefon, 2,4-D, and other mainstream products (Yaping 2021). 2.3.5 Plastics Use Agriculture has become a significant source of demand for plastics in China, especially short-lived ones that are quickly discarded and prone to ending up in the environment. Agricultural uses of plastics in China were estimated to fall between 2.7 and nearly 5 million tons per year. The range is based on two separate estimations of agricultural plastic use that were carried out for this study using different methodologies (Cassou 2021; Xu 2021; Yan et al. 2021). According to the material flows analysis, agricultural uses of plastics accounted for nearly 8 percent of economy-wide plastic consumption and nearly one-fifth of food 30 Between 2021 and 2022, the FAO revised China’s pesticide usage numbers downwa rd by approximately 85 percent, based on inputs from the government. 39 system plastics in 2018 (Figure 2.4). Plastic films have been the largest agricultural application of plastics in China by far. Figure 2.4: Agricultural and Food System Uses of Plastics in China, 2018 Food marketing 81% Nonfood Food 59% 41% Agriculture 19% Source: Estimates by Xu for the World Bank (2021) Plastic films account for over three-quarters of agricultural uses of plastic in China. According to the material flows analysis, plastic films used for mulch and greenhouses accounted for nearly 78 percent of the agricultural sector’s annual demand for plastics in China in 2018. Greenhouses dominated the category in 2018, accounting for nearly half (49 percent) of agricultural plastics by weight, or nearly 2.5 million tons. Plastic mulch accounted for another 28 percent, at close to 1.5 million tons (NBS and MEE 2019). The bottom-up study found that plastic mulch film dominated agricultural plastics use, with an annual consumption of 1.38 million tons, while that of greenhouse films was estimated at 1.03 million tons per year (Yan et al. 2021). Other uses of plastics in agriculture are smaller but also add up; notable uses include sunblock shade cloth, insect screens, fertilizer and pesticide packaging, aquaculture feed packaging, fishing rope and net, and irrigation piping.31 The most widely used polymer in all these applications is polyethylene (PE). In China, reliance on plastics is especially pronounced, where farmers have adopted plastic films to extend their growing season, retain soil moisture, and suppress weeds —particularly in cold and arid parts of the country. The country’s largest user of agricultural plastics is Shandong Province, where rainfall is scarce, and temperatures can remain low into the late spring. The province is also one of China’s most important vegetable and fruit production bases, catering to demand from surrounding provinces such as Beijing and Tianjin. The reliance on plastic films to grow these crops has become extensive. Considering China’s farm labor and resource constraints, plastic film has been widely appreciated f or reducing labor-intensive tasks like weeding and pest control and enhancing water savings and yields. In parts of China, plastic films have to some extent, enabled farmers to overcome land, resource, and climate constraints to shift to higher-value crops or intensify production. Northern provinces have been able to scale up the cultivation of crops like cotton and certain fruits and vegetables that their cold and arid conditions are not well-suited to growing. As a substitute for glass, plastic films have also been an affordable means of scaling up greenhouse operations, enabling farmers to grow high-value food crops in at least partially climate-controlled conditions. Due to their short duration and, at times, their mismanagement, agricultural films and other plastics have become a notable source of plastic waste and pollution. A key cause for concern comes from the contrast 31 Uses of plastics in fisheries are varied and challenging to estimate. Plastics are used in fishing cages, nets, rafts, pipes, rope, bait baskets, buckets, mulch, and feed and chemical packaging. 40 between the brevity of plastic films’ useful life, and their extreme durability in most environments, bringing with it the potential to accumulate and do lasting harm. Moreover, despite progress, a significant share of agricultural plastic waste continues to be mismanaged in China, resulting in various forms of pollution and harm to wildlife. For example, while the practice is being reined in, the combustion of plastic waste on farms—practiced by an estimated 15 percent of farmers —continues to be a source of toxic air pollution and possibly soil contamination (Yan et al. 2021). It is also a problem when plastic waste is left to degrade on cropland or in natural landscapes. The leakage of plastic waste into the environment can occur at the farm level when used plastics are not fully removed from cropland but also further downstream when plastic waste is sent to open-air dumpsites or lost on the way. As it degrades, pieces of plastic, large and small, can be harmful and even lethal to both marine and terrestrial wildlife. Its presence in soils is also polluting farming activities and products. As already noted, plastics left to degrade in soils have also led to a degradation of soil quality, potentially detracting from both crop yields and food safety. It is useful to remember that despite being the norm in certain farming systems today, the use of plastic films in farming is only a few decades old. Almost unheard of in the 1990s, over 18 million hectares of cropland were covered in plastic mulch by 2014 (NBS 2016); between 1991 and 2004, the surface covered by mulching films increased by as much as 30 percent per year (Espi et al. 2006). As of 2017, nearly 1.5 million tons of plastic film covered an estimated 20 million hectares or 12 percent of China’s farmland (China News Source 2020; Bloomberg News 2017). Plastic greenhouses also surged in recent decades. By the early 2010s, China was the largest greenhouse film user, accounting for more than 90 percent of greenhouse operations globally (Chang et al. 2013). Today, however, Chinese farms’ adoption of agricultural plastics seems largely complete. The use of plastic films seems to have peaked around the mid-2010s (NBS and MEE 2019). 32 After 2016, the annual demand for plastic mulch even dropped slightly, returning to the 2013 level in 2019 (Yan et al. 2021). In China, the market for plastic films seems to have become saturated. 2.3.6 Straw Burning Although open burning is gradually being extinguished, burning agricultural residues after harvest remains a major seasonal polluting event in parts of China where it is still practiced. Biomass is burned worldwide to control pests and pathologies in crops, remove wastes to prepare for harvest or seeding, and produce energy (Sharratt and Auvermann 2014). Agricultural burning has been controlled to a large extent since the early 2000s after it was banned, but China still burns more straw than any other country (FAO 2021). According to FAO statistics, mainland China accounted for 17 percent of the global open burning of agricultural residues in 2019, burning 23 percent more biomass than all of Africa and 40 percent more than India (FAO 2021). As of 2019, just under 10 percent of straw left over from growing maize, rice, wheat, and sugar cane was burned in the field, according to the FAO’s records. These numbers do not account for the additional percentage ultimately burned as fuel. The open burning of straw creates a complex mix of air pollutants, including ones that can seriously endanger human health. Those include fine particulates including PM 2.5, dioxins, polycyclic aromatic hydrocarbons (PAHs), 33 carbon monoxide (CO), arsenic, mercury, lead, hydrochloric acid, and volatile organic compounds (VOCs) (Bi et al. 2017 in Bi 2021; Zhang et al. 2011 in Chen et al. 2017). Studies carried out in China between 2000 and 2014 indicate that biomass burning activities in general (not exclusive to field burning) can account for up to about 19 percent, 25 percent, and 37 percent of fine particle emissions depending on the season (in autumn, winter, and summer respectively) (Chen et al. 2017). The implication is that biomass burning is a major driver of particulate pollution alongside traffic and coal combustion—at least seasonally. Studies carried out in different regions of China have also found that 32 About 18 million hectares were covered in plastic film in 2018; a similar area to that covered in 2014. 33 Total emissions of PAHs from the burning of corn, rice, and wheat residues in China were estimated at 1.09 gigagrams in 2004 (Zhang et al. 2011). PAHs are carcinogens. 41 biomass burning accounts for around 10 percent (9–13 percent) of VOCs, although its contributions can be far higher on a seasonal basis (Chen et al. 2017). One study in central China (Wuhan) showed that biomass burning during the autumn harvest accounted for 55 percent of VOCs and that it was the main source of haze during the warm season (Lyu et al. 2016 in Chen et al. 2017). Straw burning is indeed an important contributor to secondary pollutants associated with air quality impairment and climate pollution. Multiple studies have shown that smog events in North, Central, and Eastern China have been highly correlated with seasonal biomass burning (Chan and Yao 2008 in Chen et al. 2017). Straw burning is also a source of climate pollution, particularly of the short-lived yet intense kind. The major sources of climate pollution concern are organic aerosols —black and brown carbon—and, indirectly, tropospheric ozone. While they are not GHGs but components of PM2.5, black and brown carbon contribute directly and indirectly to near-term warming (measured in days). While burning rates have declined, the total amount of biomass burned in 2019 was 25 percent higher than when open burning was banned. In maize farming, the amount of biomass burned was nearly 74 percent higher in 2019 compared to 1997. In absolute terms, FAO statistics (2021) show that after hovering in place after the ban, burning levels resumed their climb in 2005, driven by strong increases in maize residue burning. At their peak in 2015, maize burning levels were 89 percent higher than they were the year burning was banned. In contrast, while rice and wheat residue burning levels also started to creep back up a few years into the ban, they never returned to their 1997 levels. In fact, rice straw burning peaked in 1976 and wheat straw in 1991, according to FAO statistics. Straw burning has been difficult to bring to a full stop in part because many farmers continue to view it as beneficial. Some farmers believe straw burning can quickly improve soil fertility, kill pests, eliminate weeds and grass seeds, and block the inter-year or inter-season spread of pests and weeds. And while these agronomic benefits are debatable, the economic benefits are clear: straw burning is a time and cost saver for farmers. Available alternatives are generally more costly. For example, incorporating straw residues into agricultural fields takes more time and effort and requires farmers to buy or rent costly machinery. In addition, field incorporation can create nuisances when it is not done properly —notably due to limitations of available machinery. Inadequately processed straw or incorporated at a shallow depth can cause soil to clot and interfere with subsequent planting activities. Thus, according to a MARA researcher, subsidies available for field incorporation have been unconvincing (Bi 2021). The lack of economically attractive alternatives to straw burning is also part of the equation. 2.4 The Role of Policy and Market Failures, and “Asymmetricâ€? Agricultural Modernization Looking at the challenge in broader terms, agricultural pollution in China has largely been a product of the sector’s modernization. Within a few decades, China’s agricultural output has grown and diversified tremendously. And if it has done so, it is largely because China’s farms have adopted modern farming approaches and technologies that have enabled them to intensify their production of a range of agricultural products. For decades, China’s agricultural sector has indeed delivered ever more food from a relatively fixed expanse of farmland. At the same time, the modernization of China’s farm sector has been characterized by a deep asymmetry. Indeed, adopting modern industrial production methods that have resulted in the sector’s intensification has significantly outpaced the adoption of modern pollution control and prevention technologies and practices. This is one of the reasons China’s agricultural achievements have been environmentally costly in ways already documented. This lag in the pace of environmental modernization can, in turn, be seen as a reflection of various policy and market failures—the following examples are not meant to be exhaustive. 42 2.4.1 Unpriced Environmental Externalities One overarching factor that is by no means unique to China is that markets do not generally reward or punish farms depending on how hard they are on the environment. In China, as in many other countries, the environmental costs of agriculture are not usually reflected in the pricing of farm products. In fact, farms that use chemical inputs more intensively than others tend to be rewarded with higher returns (Gao 2021). Farming systems that are dependent on chemicals and plastic films, including intensive farming and greenhouse production, have flourished (Gao 2021). Economics has also given a leg up to more toxic and fast-acting pesticides instead of the safer but slower-acting pesticides that meet national quality standards. 2.4.2 Farm Labor Scarcity Expanding more lucrative nonfarm employment opportunities is another market factor that has contributed to driving the sector toward input-intensive and large-scale farming. As urban and nonfarm wages have increasingly set the opportunity cost of farming, luring away workers, labor-intensive agriculture—less dependent on chemical inputs —has lost its competitive edge. In China, large numbers of small family farms are now operated part-time. Factoring in these realities, progress toward greening the farm sector will likely depend on the availability and incentivization of environmentally-friendly approaches or technologies that are also labor-sparing. 2.4.3 Challenges in Improving the Environmental Performance of Small Farms Smallholders have not been widely viewed by the state as a potential force for green rural transformation. China has 200 million small independent farms, and it has been argued that their large numbers and fragmentation are among the major obstacles to controlling agricultural pollution. The government has approached the perceived challenge, in part, by supporting cooperatives and so-called lead companies through various preferential programs and subsidies, including tax reductions and exemptions. However, it has also proactively supported what it refers to as large-scale or professionalized farming, including through farm subsidies and preferential access to land —the latter sometimes arising through local deal- making with local authorities in their capacity as developers. 2.4.4 Early Agricultural Industrialization Policies and Strategies Government policies have also played an instrumental role in driving agricultural intensification and, with it, farming practices that have been taxing on the environment. At the turn of the twenty-first century, the intensification, industrialization, and modernization of agriculture were seen as promising growth engines for rural China and benefited from government support, notably at the province and local levels. The development of China’s agricultural sector was also partly reshaped by the corporatization of local government and inflows of redirected industrial capital. More recently, as environmental protection has become a concern of farm policy, the growing focus on environmental performance has not seemed to weaken or displace support for agricultural industrialization and consolidation. In China’s vision of modern agriculture, the sector’s industrialization is not seen as being inimical to ecological conservation. If anything, the former has sometimes been seen as part of the solution to China’s agroecological woes. One possible explanation for this is that China has been focused on environmental intensity as a key measure of performance, more so than on overall or absolute impact. While industrialization and intensification have enabled the sector’s environmental intensity to decline, they have also led agriculture’s environmental footprint to grow until recently. 43 2.4.5 Shift toward a More Polluting Basket of Agricultural Products In undergoing agricultural intensification and diversification, China has also shifted toward a more polluting mix of agricultural products. Key changes with respect to farm pollution include the rise of animal- source food and fruit and vegetable production. From a big-picture perspective, animal-source foods are vastly harder on the environment than plant-based ones, and their rise has tremendously increased the environmental and health costs of China’s food system. The fact that China consumes 28 percent of all the meat consumed worldwide and half of all the pork is not incidental to the agricultural pollution story. Today, China raises more animals for food than any other country. In 2019, it held over 7.2 billion of them, making it home to over one-fifth (22 percent) of the world’s land-based farmed animal population (87 percent of which are poultry birds 34). Driven by population increase, dietary change, and changes in the food supply, these numbers and the realities they imply are without historical precedent. With respect to land-based animals, China is the world’s largest producer of pigs and poultry (37 percent and 22 percent of the total, respectively), the fifth largest producer of cattle (over 4 percent), and by far the largest producer of sheep and goats (nearly 13 percent) (FAO 2021). China is also the largest aquaculture producer in the world. 2.5 Agricultural Pollution Prevention and Control Policies In the past decade, China’s agricultural pollution prevention and control policies have gained standing, scope, and strength over time, but opportunities exist for better implementation. As noted in the introduction, if China’s agricultural pollution problem has been contained today, it is probably due to a mix of policy and institutional reforms. Environmental performance has clearly come to occupy a growing and more central place in national policy, and over time, that orientation has worked its way into agricultural policy. This section briefly provides a sense of that progression. The topic is more amply covered in the companion paper on Reforming Agricultural Policy, Institutions, and Public Expenditure . Over the past two decades, environmental protection has gone from an emerging theme to a central tenet of national policy. The report of the 19th Communist Party of China (CPC) National Congress of 2017 makes a strong commitment to ecological conservation and green development (Gao 2021). With respect to agricultural pollution specifically, the document marked a turning point in that it elevated the prevention and control of agricultural pollution to one of the top national priorities under the 13th and 14th five-year plans (FYPs), which emphasizes the need to accelerate green and low-carbon development; and improve environmental quality, stability of ecosystems, and resource use efficiency. In the central government’s official discourse, environmental protection and green development are now regarded as the cornerstones of rural revitalization, welfare, and inclusiveness and, thus, linked to key national pursuits. The state of ecosystems—and the “harmonious coexistence of people and natureâ€?—are presented as essential rather than accessories to achieving these objectives, alongside the development of robust industries (Gao 2021, 69–70). These changes have been reflected in the framing of some of China’s highest policy goals. For example, in 2003, the central government proposed abandoning its exclusive focus on GDP as a measure of economic progress and invoking the circular economy and “effective economy in the scientific development conceptâ€? (Gao 2021, 42). In 2005, it called for economic growth to be pursued in a resource-saving and environmentally-friendly fashion. And in 2007, the 17th National People’s Congress put forward the concept of “ecological conservation.â€? Going forward, focusing more on long-term environmental outcomes is seen as the key to spurring economic growth. In the vision laid out by the government, environmental protection is seen as being neither subservient to nor an impediment to growth and development. In the world view presented by the President and key guiding policy documents like the report of the 19th CPC National Congress, short-term 34 These numbers do not count bees, and include chickens, ducks, geese, guinea fowl, and turkeys, and presumably do not count the male chicks that are systematically culled in the context of egg production. 44 economic gain is not to be pursued at the cost of the environment on the basis that “clear waters and lush mountainsâ€? are preferable to tangible wealth because they are “invaluable assetsâ€? (Gao 2021, 71). At the same time, environmental protection is not framed as being inimical to economic development but rather conditional to a scientific approach (economic development) (Gao 2021, 72). In fact, official discourse reflects a full embrace of green growth principles or theory, with statements to the effect that clean and green industries can be turned into economic advantages. Shaped by more broadly evolving attitudes on environmental protection, the government’s vision for the agricultural sector has come to focus more on ecology over time. In 2007, for example, the Central Committee’s No. 1 Central Document abandoned the guiding concept of “agricultural modernizationâ€? proposed in 1956 in the context of national industrialization and instead emphasized the development of “modern agricultureâ€? as the primary means of developing the countryside. A key difference is that the concept of modern agriculture included a recognition of the sector’s multifunctionality. Indeed, the No. 1 Central Document of 2007 recognized that agriculture not only underpins food security but also supplies raw materials, creates jobs, protects ecosystems, hosts tourism and recreational activities, and carries forward cultural heritage, among other functions. Since, the prominence of environmental protection has continued to gain ground in China’s official discourse on modern agriculture. In 2008, the third plenary session of the 17th CPC Central Committee further proposed that “resource-saving and environment friendlyâ€? become the long-term goals of agricultural development and that “agricultural transformationâ€? be completed by 2020. In 2012, the concept of “ecological conservationâ€? was given a prominent place in the report produced by the 18th National Congress of the CPC, which called for that concept to be incorporated into all aspects and the whole process of economic, political, cultural, and social development, and for conservation efforts to accelerate. In intervening years, the importance of greening agricultural development has become a recurring feature of China’s No. 1 Central Document and other leading policy documents. Agricultural greening featured prominently in the leading policy document of 2015, for example, and that year, China committed to halting growth in national fertilizer and pesticide use. Around that time, major farm subsidy reforms also laid the groundwork for environmental conditionality and greener orientations of spending. While the 14th FYP of 2020 did not single out agricultural greening for particular emphasis, the case for greening agriculture has arguably already been established and mainstreamed. Laws and regulations relating to specific agricultural pollution challenges also reflect a diversification and strengthening of measures. Over time, for example, pesticide regulations have become more restrictive, particularly of highly toxic pesticides and their use in protected areas. Reforms have strengthened punishment for violations by increasing fines and introducing criminal liability. The government has also focused on developing and diffusing safer pesticides and application methods. Similarly, the government has, over time, hardened its ban on the open burning of agricultural waste while ramping up measures to support various alternative approaches to managing it under the banner of “comprehensive utilization.â€? The government has become increasingly mobilized around a growing set of issues, including “newerâ€? ones like aquaculture pollution, antimicrobial resistance, and even plastic pollution. To use plastic as an illustration, the State Council’s 2016 Action Plan on the Prevention of Soil Pollution called for regulations on the recycling of agricultural plastic film waste to be put in place and for the thickness of films to increase to enable a higher collection rate.35 It also called for the development of standards on biodegradable mulch film. In 2017, MARA issued an action plan for recycling agricultural film.36 Guiding opinions issued by the National Development and Reform Commission (NDRC) in 2018 called for strengthening the treatment and utilization of agricultural plastic films and other wastes and for reductions in the utilization of plastic mulch in the first place. While many legal and regulatory measures are in place, opportunities still exist to strengthen their implementation. Not all laws and regulations to prevent and control pollution have been implemented to their fullest extent, pointing to opportunities for better execution. Since 1999, many provinces, autonomous 35 Notice of the State Council on Printing and Distributing the Action Plan for the Prevention and Control of Soil Pollution 36 Notice of the Ministry of Agriculture on Printing and Distributing the Agricultural Film Recycling Action Plan 45 regions, municipalities directly under central government control, and larger cities in China have successively promulgated or revised local regulations on air, water, and soil pollution prevention and control related to farming. However, a report by MARA highlights the multiple opportunities to bring, accelerate, or reattempt regulatory action to implement existing legal texts (Gao 2021). China has opportunities to bring or accelerate regulatory action to implement existing laws. Such opportunities exist, among others, in implementing water pollution control and fertilizer management. There also exist many opportunities to implement or better implement existing regulations. For example, the Regulations on the Prevention and Control of Pollution from Large-scale Livestock and Poultry Farming in 2013 included provisions for treating livestock and poultry waste before being discharged into the environment. While these provisions have made important contributions to preventing and controlling agricultural NPS pollution, levels of discharge point to partial implementation at best. Without strong enforcement, regulatory provisions can prove ineffective or weak. The widespread dumping of untreated animal manure into the environment can be seen as an enforcement shortcoming. Conversely, open burning rates have declined even as the consequences for violating China’s burning ban have grown more vigorously enforced over time—for both farmers and provinces with high burning rates. Over time, the state has increased the fines associated with being caught and introduced the potential for criminal liability. But in some cases, weak implementation may be less due to inaction or weakness than to the limitations of the regulatory or enforcement approach pursued, pointing to the potential benefits of changing directions. In the case of burning, it is noteworthy that provinces with the highest rates of open burning face the threat, among other things, of seeing their environmental subsidies and technical assistance withdrawn. This example highlights that one opportunity for more effective regulatory implementation may lie in balancing capacity building versus punishment and, at times, reframing the failure to comply as a need. This, of course, is a balancing act, as it can be associated with a certain moral hazard and end up punishing actors who come in second to last. The key, however, is to keep the end game in sight. When it comes to environmental protection, winning is a collective feat. 2.6 Technical Opportunities for Green Agricultural Production Looking ahead, significant technical opportunities for green agricultural production remain. China, like most countries, is far from having exhausted the possibilities technology offers for green food production. Opportunities to adopt greener technologies and practices lie across the major farming activities that drive pollution. These include fertilizer, pesticide, and plastic use in crop farming, waste management in crop and animal farming, and water management in paddy and aquaculture farms. Reviewing the technical state-of- the-art and opportunities to upgrade China’s agricultural sector could fill several volumes and is beyond the scope of this paper. Instead, it highlights a few broad approaches that hold environmental promise in the Chinese context. 2.6.1 Precision Farming for Farms of All Sizes One of the major opportunities to green China’s farm sector may lie in bringing various forms of precision agriculture to farms of all sizes. To some degree, or in theory, only technical progress stands in the way of minimizing chemical losses in crop production—including losses of nutrients and pesticides and more. In China, a particular opportunity may lie in developing precision farming for the small farms that continue to dominate the country’s agricultural landscapes. In fact, the Chinese government has been pursuing lower-tech forms of precision farming for many years. Indeed, this is one way of reframing its promotion of evidence-based soil management like integrated soil- crop system management, formula fertilizer, slow-release fertilizer coatings, and more targeted application techniques like deep root placement and fertigation. Precision agriculture is also more explicitly singled out, alongside water conservation, as being among the targeted applications of digital technologies in China’s 14th FYP, the latter placing a strong emphasis on the digital economy. Much hope is indeed invested 46 in the potential of digital tools to improve efficiency, equity, and environmental sustainability in the food system. Digital technologies are also helping to overcome dichotomies pitting old against new approaches. 2.6.2 Nature-Inspired Solutions In recent years, nature-inspired solutions have gained much attention as an umbrella approach to greening agriculture. Today, Conservation International, an environmental nonprofit organization, is not alone in advocating for “using nature as a climate solution,â€? pointing to the potential to sequester carbon and avoid deforestation while reaping co-benefits ranging from improvements in farmers’ incomes to biodiversity and water conservation. While the concept of leveraging natural biophysical processes to farm in more effective and environmentally-friendly ways is several decades old, its influence over policy has largely been overshadowed by the sustainable intensification paradigm. Over time, however, nature-inspired approaches to farming have proliferated in reaction to the environmentally-harmful intensification of farming, and today, like the approaches they critique, they are diverse. Examples include organic, conservation, and regenerative agriculture; agroecological agricultural rewilding and landscape approaches; permaculture, polyculture, and agroforestry; and nature-based and natural climate solutions (Box 2.4) Box 2.4: Natural Climate Solutions: Options for Stabilizing the Climate Cost-Effectively As defined by The Nature Conservancy (TNC) and others, natural climate solutions designate conservation, restoration, and improved land management actions that increase carbon storage or avoid GHGs across global forests, wetlands, grasslands, and agricultural lands. In a 2017 research paper signed by TNC and 15 other institutions and published in the Proceedings of the National Academy of Sciences, 20 such solutions were credited with vast potential to cost-effectively keep warming below 2°C (Griscom et al. 2017). The paper estimated that, together, they could achieve 37 percent of the needed reduction in CO2e emissions by 2030 and 20 percent by 2050. Highly variable across geographies, some of the highest potentials per hectare lie in China, according to this seminal study. From a strictly technical perspective (that is, not factoring in costs), the study estimates that China could mitigate over 51 teragrams (Tg) of CO2e per year by changing how water is managed in rice cultivation, 25 Tg by optimizing the intensity of grazing, and 19 Tg by planting legumes in managed pastures. Ranchers can optimize grazing through methods such as rotational grazing, which involves local monitoring of livestock movements and grazing patterns to allow grass to recover, and bunched grazing, where livestock are tightly concentrated in an area for a set period, then moved on to let the land recover (Nature4Climate 2021). Planting nitrogen-fixing legumes, such as alfalfa, clover, peas, and beans, in managed pastures with low starting levels of legumes can increase forage for cattle and other livestock while adding carbon to the soil. China could also mitigate an estimated 42 Tg of CO2e by avoiding peatland impacts and 36 Tg by restoring peatland—waterlogged soils with rich carbon stores that get released when land is drained or converted for farming or other uses. 2.6.3 Climate-Smart Agriculture Climate-smart agriculture (CSA) is an umbrella term used to designate agricultural practices that are not only productive but also more climate-resilient and less carbon-intensive than the practices they replace. CSA corresponds to the intersection of agricultural mitigation, adaptation, and food security or growth strategies. While climate pollution is the defining focus of CSA, as its name indicates, it is singled out here, first, because of the prominence of the climate pollution challenge and second, because of its potential to concurrently address other forms of pollution. Some of these co-benefits arise automatically, and others may be deliberately sought out. For example, improved soil management and fertilization practices that can reduce GHG emissions from soils while building their ability to remain productive in the face of more erratic rainfall, floods, and droughts can also be designed in such a way as to mitigate nutrient pollution. Integrated pest management practices that can help manage increased pest pressure brought by climatic changes can also be designed in such a way as to mitigate pesticide pollution. Taking the perspective that climate change may overwhelm agricultural, food, and other human systems in the decades ahead, causing society to focus increasingly on resilience and adaptation, CSA can be seen as offering a range of low-regret investments since it offers joint mitigation and 47 adaptation benefits. There are many examples of how China is already engaging in CSA, pointing to avenues for scaling up such low-regret investments. They include wide and varied efforts to promote practices that increase soil carbon and reduce fertilizer losses, water-saving irrigation technologies (like fertigation and wastewater recycling), lower-carbon paddy management (notably by improving drainage and water control capacity), integrated pest management, the development of more weather-tolerant crop varieties and animal breeds, and increased vegetative cover. Box 2.5 provides examples of recent CSA investments and lessons learned from China’s work with the World Bank. Box 2.5: Examples of CSA in Practice and Lessons Learned In the context of its work with the World Bank, China has pursued sustainable and climate-smart agriculture (CSA) through a battery of investments and programs promoting such things as irrigation infrastructure and farm-level agricultural water management, soil conservation, and other climate-smart agronomic and land management practices, and related institutional arrangements. Other efforts have focused on developing technical protocols and guidance for growing specific crops in climate-smart ways and monitoring, verification, and reporting protocols for tracking progress in achieving CSA. For example, under the World Bank-financed Integrated Modern Agriculture Development Project implemented in 34 counties, districts, and municipalities of China from 2014–2020, various means were used to promote practices like land-leveling, improved tillage, crop residue recycling, soil testing, formula and organic fertilizer, precise fertilizer application, soil fertility monitoring and management, integrated pest management, and the development of agroecological landscape features, among others. Key lessons learned from such engagements include the importance of scaling and sustaining the shift to CSA by (1) combining infrastructure investment and technical and institutional development, (2) putting in place institutional arrangements to coordinate the involvement of multiple and diverse institutions and stakeholders at the landscape scale, (3) cultivating farmer ownership and participation by involving water users’ and farmers’ associations and cooperatives, and (4) mainstreaming the good practices of climate resilience and sustainability into government programs and policies. While the value of low-regrets CSA is broadly accepted and already being pursued in China and beyond, the progressive ratcheting up of climate impacts and urgency could raise difficult questions, going forward, about what is climate-smart and what to prioritize. In some instances, tensions between adaptation and mitigation could arise, as could tension between addressing climate and other forms of pollution. An important question is whether, in a scenario of accelerated climate change, the prioritization of adaptation efforts could undermine efforts to mitigate agricultural pollution —climate or otherwise—or on the contrary, help boost pollution control efforts. It is conceivable, for instance, that if adaptation objectives came to overtake the focus on mitigating climate change before it is “too late,â€? certain pollution prevention and control strategies could come into question and even be reversed. The real or perceived value of efforts to abate fertilizer, pesticides, plastics, and farmed animal pollution could be diminished in an adaptation-focused world. However, adaptation strategies that abandon efforts to mitigate climate and other forms of pollution could conceivably fuel a counterproductive or “maladaptiveâ€? cycle of accelerating climate change, environmental degradation, and vulnerability. Alongside research aimed at developing CSA itself, understanding and planning for the eventuality of such tradeoffs is a research agenda unto itself and one that will increasingly be needed to establish and update the criteria used to determine what climate-smart is. 2.6.4 Farming Services and the Professionalization of Greening Already in rapid development in China, professional farming services may be key to deepening agricultural pollution prevention and control in short order, provided they are oriented and shaped to make agricultural greening their priority. The development of such services has the potential to be game- changing among the small farms that continue to dominate agricultural landscapes. Their promise lies in their potential to help farms—especially small ones—overcome various scale and capacity constraints, thus enhancing their access to environmentally-relevant equipment, information, knowledge, labor, and more. In this way, professional farming services could help improve things like fertilizer and pesticide use efficiency and the management of plastic sheeting and even enable farms to adopt more agroecological approaches to farming that are more knowledge- and labor-intensive. 48 Backed by a well-developed professional farming services industry, small farms could theoretically reclaim a central role in national visions for a green and modern agricultural sector. Efficiency and environmental performance are prominent reasons for supporting China's farm consolidation and agricultural industrialization. From that perspective, if it succeeds at adopting a strong green orientation, developing professional farming services could achieve the potential (yet often unrealized) environmental upsides of large-scale farming operations without the downsides. However, professional farming services cannot be expected to green the sector spontaneously if they are not guided by the state to specialize in the greening of agriculture, specifically and not opportunistically. To realize the full greening potential of professionalization, it is not just farming that needs to be professionalized but also the greening of the sector itself. The potential for this may lie in the very foundations of the sector as it develops, including the involvement of existing agribusiness interests. 2.6.5 Mitigation of Pollution on Animal Farms In intensive livestock and aquaculture systems, significant opportunities to mitigate pollution lie in increasing feed conversion ratios, treating effluent, and eliminating the prophylactic use of antibiotics. Major avenues for improving feed conversion efficiency include advances in breeding, feed formulation, animal housing, control over animals’ environment, and improvements in water quality in aquaculture. Breed and feed development also reduce enteric fermentation emissions from ruminant livestock. However, certain approaches—notably ones involving breed development—call for closer consideration of animal welfare. From an ethical viewpoint, there is much to learn from past errors on display in other countries. For example, breeding hens to rapidly develop large muscles has given rise to poultry breeds that struggle to support their weight and are prone to cardiac exhaustion. Meanwhile, the opportunity to improve effluent treatment is vast. Many traditional livestock and aquaculture farms in China lack the facilities to treat and recycle their effluent. In the longer run, the siting and design of new farms in ways that embrace resource circularity are seen as a means of reducing effluent in the first place. These systems aspire to turn livestock waste streams into a crop production input. In extensive systems, opportunities may exist to enhance carbon stocks on grazing lands without fully removing livestock. As discussed below, succeeding in some of these endeavors will lie in China ’s angling to produce less and better meat. 2.7 Cutting Food Loss and Waste and Increasing Efficiency in Trade and Food Supply In general, opportunities to reduce how much food China produces lie in remedying existing supply chain inefficiencies. To the extent that resolving these could reduce the need for China to produce food or other agricultural raw materials in the first place, doing so has the potential to relieve every kind of environmental pressure associated with food production. Opportunities in China relate to cutting food loss and waste, pursuing circular economy concepts and models, and optimizing trade and production patterns from an environmental perspective. 2.7.1 Food Loss and Waste The opportunity that has gained the most public and policy attention lies in cutting food loss and waste (FLW). Current levels of FLW in China represent one of the major pollution mitigation opportunities. A 2021 study published in Nature estimated that in China, 27 percent of the food produced for human consumption (349 million tons) is lost or wasted (Xue et al. 2021). Of this amount, 45 percent was associated with postharvest handling and storage and 13 percent with out-of-home consumption activities (Xue et al. 2021). Furthermore, the land, water, carbon, nitrogen, and phosphorus footprints associated with these volumes of FLW are like those of a medium-sized country (such as the United Kingdom’s in the case of carbon footprint). 49 Having already recognized the opportunity, the government of China is highly mobilized around cutting FLW. In prioritizing interventions, however, it is important to realize that cutting FLW is only beneficial to the environment if the reduction involves a contraction in supply. It is not a foregone conclusion that increases in supply chain efficiency will lead to that outcome. In instances where reductions in FLW come from a higher share of supplied food reaching their endpoint and being consumed —and only minimally lowering the quantity produced in the first place—the associated benefits will be of a different nature than an environmental one. Further analysis is needed to shed light on the products and drivers of waste that, if targeted, will be most likely to deliver environmental benefits. 2.7.2 Circular Economy The promise of the circular economy lies in the perspective that agricultural waste streams constitute a rich resource whose continued underutilization has turned them into a pollution liability. China has the largest straw resource in the world and has already made tremendous progress in raising the rates of straw utilization over the past two decades. But it could go even further in repurposing its biomass waste. In that respect, the agricultural and food system’s present-day reliance on plastics, together with concerns about its sustainability, could open new prospects for straw repurposing, provided that ecologically, functionally, and economically sound bioplastics (designate polymers that are either made from biomass, or biodegradable, or both) can be developed. While biomaterials are rapidly developing, their development and commercial deployment remain in the early stages. Bioplastics that are both biodegradable and biomass-derived seem particularly promising in plastic mulch film applications in farming. Another promising avenue for using agricultural residues is manufacturing compostable food packaging, takeout containers, and paraphernalia made from bioplastics or molded fiber. Meanwhile, the circular economy need not be synonymous with the bioeconomy. The potential of conventional or non-biomass recycling is far from realized. For example, when it comes to conventional plastic waste, recycling consistently comes out as the greenest option available on a life cycle basis. However, recycling rates for the flexible plastics that dominate agricultural uses —and those of the food system more generally—are low. Far greater investments are needed in next-generation recycling systems that can restore low-value plastics into reusable material. Realizing the circular economy may be a matter of durably devoting sufficient public resources to it and treating it like the clean energy transition. From an economic stance, scaling up bioplastics, recycling, and other circular uses of the agricultural waste stream will likely depend on the willingness of authorities to mandate or subsidize them. 2.7.3 Food Trade Optimization One major opportunity for greening the food supply likely lies in optimizing global trade patterns from an environmental perspective. The basic idea is that some parts of the world have an environmental comparative advantage in producing given food items—although tradeoffs among different environmental objectives are certainly at play. Where China sources its imports —separately from what and how much it buys from other countries—carries potentially significant environmental ramifications. China’s agricultural trade with the rest of the world has grown rapidly over the past decades , and China is increasingly driving land-use change and environmental outcomes in many exporting countries. For example, Chinese demand for dairy products has reportedly transformed land use in New Zealand (Bai et al. 2018 in Mosnier et al. 2019), and Chinese timber imports are a major driver of deforestation in Southeast Asia (Mosnier et al. 2019). China’s beef and feed imports are also linked to land -use changes in the Brazilian Amazon and Cerrado. In 2020, Brazil supplied 43 percent of China’s meat imports, according to the consultancy SAFRAS & Mercado (Phillips and Standaert 2021). Of those, roughly 70 percent came from the Cerrado and 20 percent from the Amazon, half and one-fifth of which have been cleared (primarily for agriculture) (Phillips and Standaert 2021). China’s imports have, in fact, been recognized as a threat to needed global GHG mitigation efforts. However, environmental protection considerations have not exerted a major influence over trade patterns to date. 50 Going forward, optimizing trade with respect to environmental considerations could be game-changing. Highlighting the environmental significance of countries of origin, one study found that a 50 percent reduction in animal products targeting the highest-impact producers would achieve a 20 percent reduction in global GHGs (Poore and Nemecek 2018). Recognizing the breadth of global food system impacts and global food trade, the EU recently made commitments to apply more stringent environmental standards — relating especially to deforestation—to food crossing its borders. In parallel, shifting the domestic geography of food production has been proposed as one of the strategies that could help bring food production within environmental boundaries at the national and provincial levels in China. In parallel, China may be able to work with authorities and private sector actors in supplier countries to help raise their environmental performance. It could, for example, help incentivize and support improvements in production practices by becoming involved in sustainable supply chain initiatives (like commodity “roundtablesâ€?) and jurisdiction-level approaches to mitigating agriculture-driven forest loss and degradation. And in countries where Chinese companies have invested in farming and agro-processing ventures, it could initiate public-private partnerships and technical assistance programs. Through such initiatives, China could help establish environmental standards and timetables for compliance while also bringing Chinese experience in sustainable agricultural practices to bear. 2.8 Deepening Agricultural Pollution and Control by Shifting the Food Mix Deeper agricultural pollution prevention also calls for shifting the food mix. Agricultural pollution is often framed as a “howâ€? challenge rather than a “whatâ€? challenge. It is almost always assumed that the answer to pollution lies in improving how food is produced and using greener production practices and technologies. And in large part, the latter is true. But rarely is the mix of products —or “whatâ€? gets produced, imported, and consumed—called into question or looked upon as a variable, let alone a critical one that can be acted upon. Yet, shifting the mix of food products supplied and consumed —or achieving a “food shiftâ€?—could have large benefits for the environment, even before production practices are made greener. In fact, recent research supports that changes in what food is produced can deliver significant and, at times, greater environmental benefits than changes in how or how much food is produced (Tilman and Clark 2014; Springmann et al. 2016; Popp, Lotze-Campen, and Bodirsky 2010; Hedenus, Wirsenius, and Johansson 2014 in Shepon et al. 2018; Springmann et al. 2018; Kim et al. 2020; WWF 2020; Poore and Nemecek 2018). An extensive body of global research specifically supports that a shift in diets is among the leading opportunities to sustainably green the food system and prevent disease. The expression “food shiftâ€? is preferred here in recognition that greening the product mix and uses of land on the one hand and greening diets on the other can and should be thought of as two sides of the same coin. Both are a response to the question, “What food?â€? Pursuing such a shift would in no way obviate the need for greening production using every possible means. It would not make problems like fertilizer losses, pesticide toxicity, plastics pollution, and straw burning disappear. But it would, if it scaled back and substituted the production of animal-source foods, reduce manure-, enteric fermentation-, and feed-related pollution. It would mitigate biosecurity hazards relating to food pathogens, zoonosis, and AMR. And it would allow vast swathes of pastureland to regenerate and sequester more carbon. In Eastern Asia, the rewilding of land currently used to graze livestock or grow feed could stock an additional 14 gigatons of carbon—equivalent to 51 gigatons of CO 2e—just in potential vegetation alone (Hayek et al. 2021). That is equivalent to about one year of global GHGs from all sources. Studies consistently show that of the different possible dietary patterns, entirely plant-based diets offer the greatest GHG mitigation potential. Looking at the potential from the consumption side, in China, entirely plant-based yet nutritionally-optimized diets would be associated with less than half the footprint of current diets by 2050 and a fully 96 percent smaller one if land-based carbon sequestration opportunities are factored in (WWF 2020). 37 Conversely, just about any departure from plant-based dietary patterns 37 The estimate was generated using the WWF 2020 footprint calculator drawing from the work of Springmann et al. (2020), Poore and Nemecek (2018), and Schmidinger and Stehfest (2012), among others. 51 increases the onus on production technologies to meet the food system's GHG target. Some dietary patterns do so much less than others, however. In particular, the carbon footprint of low-food-chain diets closely matches that of strictly plant-based ones, both in China and globally. Meanwhile, it is important to note that even a partial shift to a more plant-centered and low-food-chain food basket could greatly facilitate the greening of China’s agricultural sector. Furthermore, from a technical perspective, the food shift offers the largest opportunity to shrink the global food system’s carbon footprint; global climate stabilization is potentially unachievable without it. From a climate perspective, changes in the food mix likely offer more abatement potential than sustainable intensification or increases in the efficiency of supply that, in many ways, have been the targets of “green modernization.â€? Figure 2.5 offers a schematic translation of modeling results that support this finding at the global level (notably based on Springmann et al. 2018 in Cassou 2021). Its message is that the food shift is at least as important as greening agricultural production and food supply chains to ensure that the food system remains within planetary boundaries. In China, a food shift would make achievable greening objectives that currently are not. Figure 2.5: Options for Keeping Global Food Production Within Environmental Limits (Schematic) 38 Note: N = nitrogen P = phosphorus While particularly critical to achieving climate stabilization, changes in the food mix can also make critical contributions to protecting biodiversity and water resources and mitigating water and air pollution. Research supports that changes in the food mix have great potential to reduce eutrophication in China, where nitrogen and phosphorus flows currently exceed the planetary boundary. With respect to biodiversity, adhering to the current nationally recommended or planetary diet patterns would substantially increase biodiversity losses, whereas a plant-based pattern would not. Some of these potential risks and opportunities are captured in Figure 2.6, which shows whether and to what extent different dietary patterns, hypothetically adopted in China, would breach five different planetary 38 Although this chart is inspired by detailed modeling work in Springmann et al. (2018), it is a simplified representation of results. It is meant to indicate what rough proportion of the needed mitigation effort each broad approach can carry. It does accurately represent the total mitigation potential and how far above or below target it is, in part because of target-combining (under environment), and in part because of the potential for the approaches to interact. The latter means that the overall mitigati on is less than the sum of each approach’s contribution. Also note that the proportions shown do not reflect potential GHG withd rawals from land-use change, or mitigation potential related to trade optimization or circular economy. 52 boundaries by 2050. Those boundaries relate to phosphorus, nitrogen, freshwater use, cropland use, and GHGs. Figure 2.6: Environmental Impacts Associated with the Universal Adoption of China’s Current and Recommended Dietary Patterns (2050), Expressed in terms of Relevant Food System Targets or “Boundariesâ€? Phosphorus Plant-based Nitrogen Freshwater Flexitarian Cropland GHG Nationally-recommended Baseline 0% 50% 100% 150% 200% Source: Springmann et al. (2020) (unpublished chart made by authors upon request) Note: GHG=greenhouse gas. The plant-based dietary pattern contains no animal-source foods of any kind. The flexitarian diet is modeled on the EAT-Lancet’s Planetary Diet and includes lower amounts of animal-source foods (Willett et al. 2019). The nationally recommended one is based on China’s national dietary guidelines. The baseline diet reflects the current national diet. The impacts of dietary patterns are adapted to national realities. For example, they reflect the actual mix of animal-source foods consumed in the country (for instance, a preference for pork), import patterns, and food emission factors. The boundaries refer to adapting or downscaling five planetary boundaries to the food system. Meanwhile, a large body of literature underscores how the plant-forward dietary shifts needed to curb climate change and pollution can also help improve dietary health by reducing the burden of chronic disease. Dietary patterns are linked to health and mortality outcomes via the many indirect impacts of climate change and pollution on health and their more direct contributions to noncommunicable and infectious diseases. Overall, animal-source foods contribute disproportionately to these risks. 39 Diet- related noncommunicable diseases are the largest causes of death in China. An estimated 1.15 million deaths could be avoided by 2030 if the population adhered to the Chinese Dietary Guidelines (Sheng et al. 2021). But the adoption of the omnivorous planetary diet—a flexitarian diet with lower levels of animal- source foods—would prevent at least 1.8 million people from dying prematurely each year relative to baseline by 2050 (Sheng et al. 2021), and fully plant-based diets could prevent at least 2.2 million deaths (Springmann et al. 2020). These estimates can be considered conservative to the extent that they only reflect the subset of diet-preventable chronic disease risks for which the most and strongest evidence exists. China’s national dietary guidelines already support a decrease in average meat consumption, putting them ahead of similar guidelines in many higher-income countries in terms of reflecting current evidence. Yet China’s national guidelines are still failing to inform health professional s, food companies, and members of the public about what is known to be best for both human health and pollution control. Despite its risks, animal-source protein is still regarded as having higher “qualityâ€? than plant-based sources (Sheng et al. 39 Though diet-related, malnutrition is not included because all of the dietary scenarios considered as alternatives assume that they meet basic nutritional requirements, although finer-tuned modeling would be needed to more fully factor in and optimize the micronutrient profiles of diets. 53 2021) because of its balanced amino-acid makeup and digestibility. This notion of protein quality, however, is “antiquatedâ€? and “at odds with imperatives of public and planetary health alikeâ€? (Katz et al. 2019, 755). A significant “leg upâ€? for China compared to many other countries is that a shift to more sustainable dietary patterns could have the added benefit of helping to make healthy choices more affordable to consumers. In many countries, more sustainable and healthier eating patterns would cost consumers more than their current food choices. But in China, more sustainable and healthy dietary choices would have cost Chinese consumers less than their actual dietary choices in 2017, according to Springmann et al. (2021). Taking what food is produced for granted has diverted attention away from win-win opportunities to shift the food mix in ways needed to protect the environment and public health. The rest of this section highlights some of them. They lie in producing less and better meat, controlling the expansion of aquaculture, developing the supply and consumption of whole food plant-based foods, and commercializing widely accepted animal-source foods that do not involve raising animals. 2.8.1 Less and Better Meat: Realigning Livestock Production with Environmental Carrying Capacity and Landscape Restoration or “Agricultural Rewildingâ€? Recognizing its multiple benefits, many environmental and public health advocates in high-income countries are rallying around producing and consuming “less and better meat.â€? Overall, animal-source foods are the most polluting category yet are medically recognized as nutritionally unnecessary (AMA 2021). While they efficiently deliver important nutrients, they are double-edged vehicles in ways that many lower-impact, plant-based substitutes (especially whole-food ones) are not. Going forward, shocks endured by the sector can be reframed as opportunities to be seized. In China, such an opportunity just passed by. In 2019 and subsequent years, African swine fever plummeted pork production levels (Reuters 2020). From the “less and better meatâ€? vantage point, the industry could have been steered and compensated to invest in pollution control and even new productive activities rather than scale back up. But, understandably, this has been difficult because of the political economy and the fact that pork is the main staple meat. China has shown a greater willingness to resize its aquaculture industry on environmental grounds. The recent downscaling of the area under aquaculture in China could set the stage for a shift toward less and better seafood. The area devoted to aquaculture in China recently reached a 10-year low as several traditional facilities have been shut down due to environmental concerns. Bodies of water like Lake Changhu in Yunnan, from which pen cultures were removed, are still eutrophic but have begun to recover (Li et al. 2022). While this reduction in the aquaculture area is at odds with China’s plans to expand the industry to keep up with domestic (and global) seafood consumption, it could instead be viewed as the beginning of a new phase of aquaculture development, in which quality is privileged over quantity. Moving in this direction would be consistent with regulators’ increasing focus on the ecological footprint of fish farming. 2.8.2 Supply Chain Development for Pulses and Other Meat Substitutes The success of scaling back animal-source food production is likely to rest on the availability, affordability, and appeal of alternatives, both at the production and consumption levels—and hence on their active promotion. Animal-source foods deliver a range of essential nutrients, and their substitution calls for alternative sources of those nutrients to be supplied —preferably without the unwanted elements that make them imperfect vehicles of those nutrients. Thus, a range of essential solutions involves developing the supply—and demand—for food groups that, to date, have been relatively neglected by public programs. These include foods like pulses, nuts, seeds, and whole grains for human consumption. In China, since meat and milk are considered strategic, it could become a priority of the government to accelerate the supply of 54 animal-free versions of these. In Denmark, the production of plant-based food and “green proteinâ€? is part of how the government intends to bring about the “green conversion of agriculture.â€? Given their potential to become a centerpiece of healthy and sustainable diets, developing the supply of pulses for human consumption is an opportunity that is being grossly overlooked and underfunded. In addition to being among the most environmentally-benign foods, pulses are versatile nutritional powerhouses relevant to traditional and emerging eating preferences. Nutritionally, pulses are 2 –3 times richer in protein than cereals, high in fiber, non-haeme iron (the less inflammatory kind), folate, antioxidants (polyphenols), and low in fat (Li et al. 2017). They are also a diverse and versatile food group that has been used in many cuisines for millennia and, increasingly, in a range of processed foods —some healthier than others—valued for their taste, convenience, and at times, their ethical advantages. For example, they are widely used to make pastas and ingredients used in meat substitutes. Demand for pulses could be particularly driven by the acceleration of next-generation plant-based meat markets and convenience products. In Brazil, agricultural authorities have started taking steps to position the country to become a supplier of ingredients to emerging domestic and international markets for plant-based meat ingredients. Embrapa, the Brazilian Agricultural Research Corporation, has started to engage in research on alternative, plant-derived protein and other ingredients for the growing plant-based food market. To take a second illustration, the overwhelming national preference for white rice over brown raises the question of why part of China’s leading source of protein is systematically discarded and what could be done about it. Rice is already the leading source of protein in Chinese diets, but it is seldom seen as the future of protein. Looking forward, however, whether it is used as an ingredient or consumed as a whole food, making greater use of grain-derived protein, at scale, could be part of the package of measures that orients dietary patterns and norms in a more sustainable and healthy direction. In a similar vein, the reassessment of supplement foodstuff strategies considering dietary changes, both realized and aspired to, may also support a food shift. 2.8.3 Animal Food Without the Animal As China’s latest agricultural FYP recognizes, another major opportunity lies in accelerating cellular agriculture and “alternative protein.â€? 40 Driven by pragmatic thinking about the difficulty yet need for diet change, global interest in taking animals out of animal foods is taking off. Achieving this is seen as a way of making a transition to sustainable diets easier for consumers and policymakers alike and, hence, more realistic. A common aspiration among the multiplicity of efforts that are taking off is to reduce the need for behavior change—or at least the perception thereof—on the part of consumers and make the transition as unnoticeable or seamless to the public as possible. The march to subtract animals from the animal-source food equation is proceeding along two major avenues. One involves the development of plant-based substitutes, and the other involves cellular production methods. Plant-based meat production is the longer-standing technology but has come a long way. Long part of Buddhist traditions, it is no secret to China that plant-based meat substitutes have been around for a long time. It is only in recent decades, however, that interest in plant-based substitutes has widened, and that branded products have come to be commercialized in mainstream retail outlets, including in countries like China and the United States. Today, not only are these products multiplying and gaining distribution, but they are also rapidly evolving in a technical sense. This technical progress is ushering in a next generation of plant-based meat substitutes that aspire to mimic meat to a far higher degree than ever before, informed by advances in a molecular-level understanding of plant-based ingredients. In earlier stages of development and commercialization, meat cultivation produces animal-source foods using cell cultures instead of a live animal. Cultivated meat is qualitatively distinct from plant-based meat in that its primary building block consists of the actual cells of animals. In other words, cultured meat is 40 While commonly used, the expression “alternative proteinâ€? is not ideal in that it builds on and possibly reinforce s what is often an exaggerated focus on protein deficiencies in contexts where protein-energy malnutrition is a minor food security problem at best, and protein may even be overconsumed by a large share of the population. 55 just like meat on a cellular level, except that it is grown in controlled conditions. Although it is sometimes referred to as lab-grown meat by its detractors, at scale, the production of cell-cultured products will resemble a brewing operation. The potential for commercializing sustainably-produced cultured meat at scale still rests on realizing multiple breakthroughs in fundamental and applied sciences. In addition, while emerging approaches hold great environmental promise, they still need to mature in ways that ensure a sustainability advantage, as well as to scale and achieve competitive pricing. 2.9 Policy Implications: Broadening and Strengthening Policy Approaches to Realize “Ecocivilizationâ€? To solidify its global leadership of the sustainability agenda and become a model “ ecocivilization,â€? China will need to make the transformation of its agricultural sector and wider food system one of its major national priorities—more on par with cleaning up energy and industry. Achieving the “harmonious coexistence of people and natureâ€? will require concerted action around agricultural and food system sustainability. Indeed, this objective cannot be achieved without reducing the significant contributions of agriculture to climate change, nitrogen pollution, freshwater scarcity, land systems change, biodiversity loss, and resource and ecosystem stress. In an ambitious scenario in which all of China’s electricity, transportation, manufacturing, and waste emissions of GHGs were brought to net zero, the country’s food sector emissions, left unabated, would likely compromise the world’s chance of stabilizing the climate. And this paper argues that to put its food system on a sustainable track, and particularly to limit climate change to +2°C degrees of warming, China will need to not only green agricultural production and food supply — with consideration for trade patterns and food loss and waste—but also change its food mix by shifting the trajectories of its food basket. Taking agricultural pollution control beyond containment and to the next level will involve devoting more attention and resources to greening how food is produced. Many mature pollution control technologies have yet to be adopted. Some have already been encouraged and supported to various extents by authorities. But higher levels of adoption hinge not only on what is technically possible but also on economic and behavioral realities. Overcoming existing barriers will mean prioritizing agricultural pollution problems further and increasing resource levels accordingly. In many cases, rolling out greener technologies and practices more widely may require a commitment to their long-term subsidization. In that respect, China could continue to deepen the environmental conditionality that it has already been working into its farm subsidy system since 2015–16. And to leverage private resources in the process, the state could strengthen extended producer responsibility schemes;41 hold professional farming services to higher standards; enhance consumers’ choice of accessible, appealing, and trusted green food labels; and support the stable supply of early-stage green venture funding. Backed by a well-developed and mission-oriented professional farming services industry, small farms could potentially reclaim a central role in the national vision for a green and modern agricultural sector. It is important to realize, however, that even if China’s agriculture were to adopt the modern state -of-the-art, perfecting how food is produced in every domain would only go so far toward addressing the country’s extensive and wide-ranging agricultural pollution problem. Deepening agricultural pollution control will also depend on pursuing a wider set of policies, focused not only on greening how food is produced but also on greening how much, where, and what food is produced— approaches that have been largely overlooked to date. In other words, bringing the agricultural sector up to the standards of “ecocivilizationâ€? will depend on China broadening as much as strengthening existing policy approaches. Further analysis that is more China-specific is no doubt warranted to determine how much weight should be given to each approach—how, how much, where, and what food—in relation to major food system 41 China already has in place a number of laws and regulations that designate producers as responsible for managing the afterlife of inputs and other waste streams. 56 objectives defined at the national level. 42 The weighting of different approaches would likely vary somewhat from global averages. But this report argues that the active and well-funded support of all these approaches will be needed to meaningfully turn agricultural pollution around, moving beyond its containment. And, to continue underemphasizing the food mix as a policy variable in tackling agricultural pollution would be self-limiting, shrinking the green horizons China can set its sights on. From that perspective, China’s policy tradition of singling out strategic agricultural products constitutes an important lever for mitigating agricultural pollution. Indeed, the choice of those commodities could be better aligned with steering the country’s food basket in a more sustainable (and healthier) direction. Specifically, including pulses for human consumption in the mix could pave the way for these environmentally-friendly nutrition powerhouses to be grown on strategic cropland reserved for growing grains. Doing so, moreover, could help cement that land’s protection by bolstering both its market value and contributions to food security. More attention could be paid to the multidimensional costs and benefits of relying heavily on animal-source foods to supply nutrients like protein, calcium, iron, and others — including its opportunity costs and the costs and benefits of alternative sources of nutrition. Doing so would highlight how redirections of public spending could upend many of the food system’s current challenges and help move the greening of agriculture to the cutting edge. Developing national and subnational strategies dedicated to a “food shiftâ€? will help expand the green horizons on which China can realistically set its sights and, therefore, ought to be a top national priority. If the potential benefits of a food shift are gaining recognition, more explicit, cross-sectoral, science-based, and ambitious strategies are still needed at the national and subnational (provincial and autonomous region) levels to bring the food mix to the forefront of agricultural greening policy and efforts. Developing new strategies would also allow China to mobilize a broader set of stakeholders, resources, approaches, and policy tools not conventionally associated with agricultural policy to achieve deeper shades of green. Dietary guidelines, culinary arts and training, institutional food procurement, pulse supply chain development, and “alternative proteinâ€? research and development (R&D) are examples of the many unconventional entry points through which China could seek to indirectly prevent and control agricultural pollution. The potential for cross-sectoral mobilization is more broadly illustrated by the examples of “ push and pullâ€? strategies that could be pursued toward food shift as a pollution mitigation strategy (Table 2.1). Potential no doubt exists to leverage (dietary) health policy and spending to green the agricultural sector. The strong overlap between dietary patterns that maximize nutritional health and those that benefit the environment implies that efforts around health-promoting dietary patterns can also facilitate sector greening if they are well-informed. Table 2.1: Push and Pull Strategies for a Food Shift Supply-side or “market pushâ€? strategies Demand-side or “market pullâ€? strategies Supply chain development, especially focused Food-based dietary guidelines and guidance on pulses, nuts, and seeds; whole grains; Nutritional education and training ingredients and substrates for cell-cultured meat; Social norm change and targeted supplementation Culinary training Research and commercialization of cultured Social marketing and plant-based meat Food procurement Relative food pricing strategies using taxation Food labels and certification and subsidies Food reformulation Less and better animal-source foods Dedicated food shift strategies Strategic commodities Strategizing anew would also provide China with opportunities to better align levels of investment and policy priorities with existing evidence. For instance, even if more emphasis is placed on demand-side 42 The weighting of different approaches would likely vary somewhat from global averages. For example, dietary shifts may play a larger role in meeting freshwater and nitrogen targets in China. China may also have relatively large opportunities to reduce its carbon and land-use footprints through a focus on trade optimization, particularly in relation to its imports of animal source foods and feed from Latin America. 57 approaches to greening, climate and other targets will not be reached by embracing any number of things typically associated with sustainable consumption, like organics, local and seasonal eating, or streamlined packaging. While these advances can be of significant benefit and have their place, the larger and more indispensable gains lie in the downscaling and substituting of animal production, paired with efforts to optimize all remaining food production and supply systems. Strategizing anew would allow China to reassess public spending on growing the output of animal-source foods against a diversity of policy objectives, from climate stabilization and conventional pollution control to biosecurity and chronic and infectious disease prevention. Given what it will take to keep China’s agrifood system within environmental bounds, political economy and social norm considerations will likely need to be at the forefront of policy efforts going forward. Food shift is probably among the low-hanging fruit abatement opportunities available from both technical and cost perspectives, but it is also among the most challenging opportunities with respect to the political economy hurdles and social norm change it implies. The political economy of food, social norms, and other factors that anchor eating habits and aspirations have almost certainly contributed to making food shift opportunities seem intractable. As a result, the question of the food mix has largely been sidelined in policy discussions on food security, climate, the environment, food safety, biosecurity, and public health. Yet, the absence of change in healthier and more sustainable directions is not a desirable option for China or any country—even if climate change, which alone justifies action, is momentarily put to the side. Thus, addressing the hurdles posed by the political economy and social expectations—in the most inclusive way possible—is a question of national self-interest. Looking ahead, China faces several opportunities to redefine and demonstrate more transformative approaches to pursuing agrifood system sustainability. One of the biggest opportunities for China to differentiate itself internationally is by leading the charge on accelerating animal-source food alternatives while updating public narratives on food and nutritional security. China’s cur rent support for food baskets rich in animal products is at odds with the evidence in a range of scientific domains, from climate science to nutrition and epidemiology, and paradoxical, considering its aspirations to “ecocivilization.â€? Other major opportunities lie in demonstrating to the world how to halve FLW, develop a circular food economy, and bring environmental considerations to the forefront of trade. Much depends on China becoming a leader in green farming, low-loss supply chains, environmentally-informed trade, animal-free eating (“alternative proteinâ€?), and agricultural landscape restoration. The latter is needed to withdraw the greenhouse gases (GHGs) that crop farming will continue to emit even after they are abated to the fullest extent allowed by technology. China’s “green agricultural modernizationâ€? efforts have helped it contain agricultural pollution in recent years. 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Atmospheric Environment 153: 32–40. https://doi.org/10.1016/j.atmosenv.2017.01.018. 63 PAPER 3 Greening China’s Agriculture: Investing in Technology, Innovation, and Institutions Donald F. Larson, Lei Bo, Minli Yang, Shangchuan Jiang, Wenbin Wu, Kevin Chen, Yumei Zhang, and Binlei Gong Synopsis China’s agricultural sector has grown rapidly for more than four decades, driven by productivity gains and intensification. Other parts of the economy grew rapidly as well. With economic growth, average incomes in China rose, and poverty rates fell dramatically. Labor markets restructured as rural agricultural workers moved to take higher-paying manufacturing and service jobs in larger towns and cities. The widespread adoption of Green Revolution technologies, market reforms, and public investment triggered the initial decades of agricultural productivity gains. Because the innovations were primarily biological and embodied in cultivars, the technologies worked well on China’s small farms. Nevertheless, while land -saving, the technologies placed a heavy burden on China’s natural resources. A growing manufacturing sector and a growing urban population added to the burden, and pollution from mul tiple sectors degraded China’s land, water, and air. This paper describes the recent evolution of China’s agricultural policy to better balance production and productivity goals with natural resource protection and remediation. The architecture of this policy relies on adopting a new set of technologies. Some of the new technologies draw on traditional agricultural sciences, including plant breeding and agronomy, but others rely on a new generation of digital platforms, telecommunication and navigation systems, satellite and surface remote sensing systems, and a new breed of smart machines that use resources more efficiently. This paper examines efforts to promote these technologies and highlights lessons from key ongoing pilots. Unlike earlier innovations that worked on farms of all sizes, many of the new technologies exhibit economies of scale. China’s agricultural labor force is aging, which will speed up the consolidation of farms. And the technologies described in this paper are well-suited to a future Chinese agricultural sector made up of larger and more capital-intensive farms. Recent market innovations in pricing water and speeding up the consolidation of use rights to mimic large farms will help. However, made urgent by growing demand and hampered by a shifting natural resource base due to climate change, the rollout of key resource- and labor- saving technologies face challenges in the near term since China’s agriculture and the institutions that support it remain structured around small farms. Still, these innovations in markets and the adoption of greener technologies can have cascading consequences for the management of agricultural policy for China’s large research and extension institutions, private and public service providers, and farmers. 3.1 The Transformation of China’s Agricultural Sector and Its Impact Two distinct periods characterize twentieth-century agricultural policies in modern China, separated by a set of reforms begun in 1978. In the earlier period, agricultural policies promoted collective farming and communal production teams. Production and cereal yields grew during the period, but total factor productivity did not. During that time, over 80 percent of China’s farmland was devoted to producing basic grains (Huang and Rozelle 2018). Rural incomes stagnated, and food availability remained low (Huang, 64 Otsuka, and Rozelle 2008). Reforms began with a grassroots innovation in Anhui Province, where a small group of farmers took on household responsibility for production obligations in exchange for greater decision-making autonomy. Over the next few years, the approach, which became known as the household responsibility system (HRS), was piloted in poor agricultural regions and expanded quickly. The HRS was fully sanctioned in late 1981, and by 1983, more than 94 percent of agricultural households had adopted the HRS approach (Lin 1987). The HRS also had profound effects on groundwater irrigation. After the HRS, ownership of tube wells on contracted land shifted from villages to households (Jaffee et al. 2022). To raise productivity, farmers began to invest in tube wells in their own fields, and the share of private tube wells increased from 7 percent to 83 percent between 1983 and 2004 (Wang et al. 2019; Jaffee et al. 2022). This gave farmers control over water resources, boosting productivity, but creating eventual overuse problems as well. Private ownership also fueled a growing groundwater market, giving non-owners access to irrigation but further straining water resources. For example, the percentage of villages on the North China Plain with active groundwater markets increased from 5 percent in 1990 to 80 percent in 2016 (Zhang et al. 2008; Jaffee et al. 2022). The shift to a greater reliance on household decision-making initiated a steady evolution toward market- based policies, including additional reforms to land-lease markets (Jin and Deininger 2009; Gao, Huang, and Rozelle 2012; Jaffee et al. 2022), and a phased liberalization of agricultural markets, beginning with nonstrategic products in the 1980s and eventually moving to strategic crops, including grains, by the late 1990s (Rozelle and Swinnen 2004; Huang and Rozelle 2006, 2018). Agricultural policies were backed by large investments in public infrastructure. Road networks grew from about 900,000 km in 1978 to 4.4 million kilometers (km) by 2013, improving rural market access. Irrigated cropland grew from 45 million hectares in 1978 to 67 million hectares by 2016 (Zhang et al. 2004; Huang and Rozelle 2018). China also created the world’s largest research and extension network, which generated outsized productivity impacts (Deng et al. 2021). 3.1.1 Gains from Growth The combination of policy reforms, Green Revolution technology adoption, and public investment led to productivity gains in agriculture that facilitated structural shifts in China’s labor markets and growth in the manufacturing sector. Figure 3.1 shows how China’s land, community, and labor productivity improved from 1970 to 2019. Grain yields grew steadily through the early 1970s and more rapidly following reforms. For example, yields increased by 17 percent in the seven years before 1978 and 57 percent over the next seven years. Growth in labor productivity came later. Data on labor productivity, measured as constant value-added in agriculture per worker, is unavailable before 1991; however, as the figure shows, labor productivity rose steadily through the 1990s and accelerated from the early 2000s. The figure also reports community productivity, measured as constant agricultural value-added divided by the rural population. This indicator suggests that the gains in rural incomes lagged compared to other indicators, remaining steady from 1970 to the early 1990s, then growing more quickly with increased urbanization. Studies also report rapid productivity growth during this period when a more comprehensive indicator, such as total factor productivity, is used rather than partial measures, like those given in Figure 3.1. Huang et al. (2020) provide a useful review. Broadly, the studies conclude that agricultural productivity gains in China can be explained by a combination of land reforms, market reforms, technology adoption, and greater input use. Still, with time, the more intensive use of water and chemical inputs gave rise to a new set of constraints, which motivated a new set of policies. 65 Figure 3.1: Land and Labor Productivity in Agriculture, 1970–2019 6,000 7.00 Value added per person (USD in 2015) 5,000 6.00 5.00 yields (mt/ha) 4,000 4.00 3,000 3.00 2,000 2.00 1,000 1.00 0 0.00 1972 1982 1970 1974 1976 1978 1980 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 rural community agricultural workers grains (right) Sources: FAO (2022) and World Bank (2022) Changes in agricultural policies were followed by further reforms and public investment in other sectors, and changes in trade policy led to China’s accession to the World Trade Organiz ation (WTO) in 2001. Spurred by productivity gains, agriculture continued to grow, but by the late 1980s, growth in other sectors outpaced growth in agriculture, and China’s economy restructured ( Figure 3.2). Agriculture’s share of GDP fell from more than 30 percent through the 1980s to 8 percent by 2015. Importantly, agriculture’s share of China’s labor force fell from 60 percent in 1991, when data was first available, to 24 percent in 2020. Figure 3.2: Economic Growth and Sectoral Transformation, 1970 –2020 1,200 0.70 1,000 0.60 Billions (USD in 2015) 0.50 800 Share of total 0.40 600 0.30 400 0.20 200 0.10 0 0.00 1976 2002 1970 1972 1974 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2004 2006 2008 2010 2012 2014 2016 2018 2020 Agricultural GDP (left) Share of GDP Share of employment Source: World Bank (2022) The shifting composition of the economy and the sectoral labor migration was associated with an accelerated rate of urbanization. Prior to reforms, policy aimed to limit migration from rural areas, a policy implemented through the HRS. Later in the reform period, registration restrictions were eased, first by allowing households to temporarily relocate for employment and later through managed urbanization (Cai 1999; Fan 2007; Shen 2013). Consequently, a reallocation of labor from agriculture to other sectors was matched with a movement of households from rural to urban communities (Figure 3.3). In 1970, 82 percent of China’s population lived in rural areas, and, despite high internal migration rates, about 50 percent 66 remained in rural areas through 2010. However, with an aging rural population, the share of China’s population living in rural areas fell rapidly, reaching around 38 percent in 2020, and further declines are expected. China’s population living in rural areas is projected to decrease to about 19 percent by 2050. Moreover, while China’s population is still growing and is expected to grow through 2030, China’s rural population may have already peaked, according to projections reported by the Food and Agriculture Organization of the United Nations (FAO 2021b). Consequently, the agricultural labor force is both shrinking and aging. In 2021, the average age of the agricultural labor force was 46 years old; two-thirds were between 40 and 60 years old, and less than 5 percent were in their thirties (Yang and Jiang 2021). Figure 3.3: Rural and Urban Populations in China, Historical and Projected, 1970–2050 1.6 0.90 1.4 0.80 1.2 0.70 0.60 billion people share of total 1.0 0.50 0.8 0.40 0.6 0.30 0.4 0.20 0.2 0.10 0.0 0.00 2006 2024 1970 1973 1976 1979 1982 1985 1988 1991 1994 1997 2000 2003 2009 2012 2015 2018 2021 2027 2030 2033 2036 2039 2042 2045 2048 Urban Rural Rural share (right) Source: FAO (2022) Figure 3.4 illustrates the growing importance of trade for China’s agricultural sector. Agricultural imports and exports, measured in constant value, grew slowly from the mid-1970s through the 1990s as part of the gradual opening of the Chinese economy to trade (Huang, Rozelle, and Zhang 2000; Martin 2001; Huang, Rozelle, and Chang 2004). WTO membership led to dramatic growth in both agricultural imports and exports. Moreover, trade became a more important component of the agricultural sector, as the ratio of trade relative to production rose from about 10 percent to 25 percent following WTO accession. Still, agricultural trade rose less quickly than in other sectors. In 2000, agriculture’s share of merchandise trade had fallen from an average of 15 percent of total merchandise imports and 22 percent of total merchandise exports in the 1970s to 5 percent and 6 percent in the 1990s. From 2011 to 2019, the shares remained at 2 percent and 5 percent, respectively. 67 Figure 3.4: Agricultural Trade, 1970–2019 180 0.30 Trade as share of agricultural GDP 160 0.25 140 billion USD (2015) 120 0.20 100 0.15 80 60 0.10 40 0.05 20 0 0.00 1984 2016 1970 1972 1974 1976 1978 1980 1982 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2018 Trade relative to production (right) Agricultural imports (left) Agricultural exports (left) Sources: FAO (2022); World Bank (2022) Note: The trade relative to production ratio is calculated as the sum of agricultural imports and exports divided by agricultural GDP. The rapid growth in agricultural productivity boosted domestic production, and the changing trade policy allowed for greater food imports. Together, the result was a significant gain in food availability per capita, despite substantial population growth. Error! Reference source not found. shows two indicators of food supply, FAO’s estimates of available calories per capita per day and available grams of protein per capita per day. Between 1970 and 2018, China’s population grew by 72 percent; however, protein supplies nearly tripled, and calorie supplies more than doubled, boosting per capita supplies of protein by 119 percent and per capita calorie supplies by 72 percent. Increased agricultural productivity boosted food supplies and rural incomes, and the shift of agricultural labor to other sectors where wages were higher led to a virtuous cycle of improved incomes, especially in rural communities where poverty rates were highest. By 2002, the number of extremely poor people, those living at USD 1.90 a day or less, had fallen by half. By 2018, the number of extremely poor people had fallen by more than 790 million (Figure 3.6). Access to clean drinking water and managed sanitation services are important for public health and household welfare, and in the last 20 years, the percentage of rural households with access to clean drinking water increased from 70 percent to 90 percent. Further, public access to managed sanitation systems has increased significantly, from 28 percent to 86 percent of people living in urban areas and from 5 percent to 44 percent of the rural population (Figure 3.7). 68 Figure 3.5: Food Supply in China, 1970–2018 3,500 120 grams of protein per capita per day 3,000 100 calories per capita per day 2,500 80 2,000 60 1,500 40 1,000 500 20 0 0 1970 1972 1974 1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 Calories Protein Source: FAO (2022) Figure 3.6: Poverty in China, 1990–2016 120 100 Percent of population 80 60 40 20 0 1985 1990 1995 2000 2005 2010 2015 2020 USD 1.90 a day USD 3.20 a day USD 5.50 a day Source: World Bank (2022) Note: Poverty headcount ratio is the percentage of the population living on less than USD 1.90, USD 3.20, and USD 5.50 a day at 2011 69 international prices. Figure 3.7: Access to Water and Sanitation Services, 2000–20 120 Percent of population 100 80 60 40 20 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Sanitation services, rural Sanitation services, urban Drinking water, rural Drinking water, urban Source: World Bank (2022) 3.1.2 Emerging Resource Constraints At the heart of China’s initial productivity gains were a series of biological innovations in cultivars. China pioneered the first fertilizer-responsive, semi-dwarf rice varieties in the early 1960s (Jaffee et al. 2022). Similar innovations from other research centers worldwide quickly followed and were widely adopted, launching what would become known as the Green Revolution (Evenson and Gollin 2003; Evenson 2005; Hazell 2009; Pingali 2012; Estudillo and Otsuka 2013; Otsuka and Larson 2013). Farms in China have always been small; in 2000, the average farm size in China was less than 0.7 hectares (Lowder, Skoet, and Raney 2016). Because the innovations were embodied in seeds, the technologies were scalable and well- suited for China’s small farms. Following the introduction of the HRS, production choices devolved to the household, albeit with considerable direction at the village level and guidance from the center. The new seeds improved productivity on smallholders’ land-constrained farms, and the seeds were promoted by public policy. Because the new seeds boosted yields, the technology was land-conserving (Stevenson et al. 2013); however, the technologies relied on the intensive use of chemical inputs, especially fertilizer. Soon environmental problems emerged, especially in places where multiple crops were harvested each year (Pinstrup-Andersen and Hazell 1985; Pingali and Rosegrant 1994; Rosegrant and Livernash 1996). In China, the excessive use of fertilizers and pesticides associated with this class of technology would eventually lead to land degradation, water pollution, and other environmental damage (Cassou et al. 2022). The technologies also exerted immense pressure on China’s land and water res ources over time. Figure 3.8 shows that arable land area expanded by about 25 percent during a short period in the 1980s, grew slowly through 1993, and has since fallen by about 5 percent under pressure from urbanization and, increasingly, land degradation. Beginning in the late 1990s, government investments in irrigation picked up, and the area under irrigation continued to increase; by 2018, the irrigated area had increased by 60 percent compared to 1970. Fertilizer application rates grew sharply beginning in the late 1980s until 2015, at which point fertilizer application rates had increased by more than 10-fold. The combination of excessive irrigation and chemical 70 fertilizer use has degraded lands, and fertilizer runoff is a major source of water pollution in China (Yu et al. 2019; Cassou et al. 2022). Sustainable land management is crucial for China because farmland is relatively scarce: China’s food systems need to support 19 percent of the world’s population, with 9 percent of the world’s arable land and less than 7 percent of the world’s freshwater (FAO 2022; World Bank 2022). However, satellite data reveals that significant land degradation occurred between 1981 and 2003. During that period, nearly 23 percent of the land area showed productivity declines, including 24 percent of China’s arable land and 44 percent of its forests (Bai and Dent 2009). A later study found that China had lost nearly 5.4 million square kilometers (km2) of land from urbanization and poor land management practices, primarily through pasture degradation (37 percent), soil erosion and water loss (33 percent), and soil salinization (18 percent). The authors estimated that nearly half of agricultural land was affected (Long 2013, reported in Deng and Li 2016). Figure 3.8: Water and Fertilizer Intensification in Agriculture, 1970–2018 140 500 kg per hectare of arable land 450 120 400 100 Million hectares 350 80 300 250 60 200 40 150 100 20 50 0 0 1998 1970 1972 1974 1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 Irrigated land (left) Arable land (left) Fertilizer use (right) Source: FAO (2022) The same factors pressuring land resources strained water resources. Like most places, China’s total annual freshwater resources are fixed, so the amount available per person has decreased with population growth. Between 1970 and 2017, China’s available water resources had declined by about 27 percent, from 2,789 to 2,209 cubic meters (m3) per person. Figure 3.9 shows how the demand for freshwater has grown in recent decades. The solid line in the figure is a national indicator of water stress, calculated by taking annual freshwater withdrawal as a proportion of available freshwater resources. Water stress levels in the country have increased from 34 percent to 44 percent since 1982. Moreover, the national indicator masks large inter-regional differences, as discussed in Bo (2021). Surface water and groundwater resources are highly stressed in the north of the country (excluding the Song Hua River Basin), with average basin water extraction exceeding 40 percent, an internationally recognized limit for sustainable water use. The highest levels of extraction per basin in Northern China have reached 119 percent due to the overextraction of groundwater, with a cumulative regional overdraft of 100 billion m3. The average use rate of groundwater in Northern China has reached 105 percent, affecting 90 percent of the North China Plain, with an annual overdraft of 6.8 billion m3 in the Beijing-Tianjin-Hebei region. Agriculture places the greatest demand on water resources; however, agricultural water use has declined as a share of total water use, from 88 percent to 64 percent from 1982 to 2017. In absolute terms, it has fallen from 403 billion m3 to 381 billion m3 of withdrawals yearly. By contrast, overall use increased by 29 71 percent over the same period, driven by a tripling of use by industry and a quadrupling of demand by sectors other than agriculture and industry. Figure 3.9: Annual Freshwater Withdrawals, 1982–2017 700 46 600 44 Billion cubic meters 42 500 40 400 38 300 36 200 34 100 32 0 30 1982 1987 1992 1997 2002 2007 2012 2017 Agriculture use Industry use Other use Water stress Source: FAO (2022) China’s economic growth also placed additional burdens on the atmosphere. Figure 3.10 shows the rapid growth in per capita carbon emissions and the rise and recent decline in fine particulate air pollution, the type of pollution associated with hazy skies and breathing disorders. In relative terms, emissions originating on-farm are low, comprising about 6 percent of total emissions in 2018. However, on-farm emissions per capita have grown by about 27 percent between 1970 and 2018 (FAO 2021a). Still, recent policy changes in China designed to reduce air pollution and carbon emissions will significantly impact the agricultural sector, as discussed in the next section. Figure 3.10: Carbon Emissions and Fine Particulate Air Pollution, 1970 –2018 80 8.0 70 7.0 Micrograms per cubic meter 60 6.0 50 5.0 40 4.0 30 3.0 20 2.0 10 1.0 0 0.0 1996 2002 2008 2014 1970 1972 1974 1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1998 2000 2004 2006 2010 2012 2016 2018 Fine particulant air pollution CO2eq emissions per capita (right) Source: World Bank (2022) 72 3.2 A Shift in Natural Resource Policies and Goals The accumulating effects of pollution and the overuse of China’s natural resources from agriculture, manufacturing, and other sectors brought about policy changes. In the case of agriculture, policies took on a new set of environmentally focused goals as part of a national strategy to limit pollution and better manage water resources. To be sure, the new objectives were not intended to supplant the objective of meeting an ever-growing demand for food and other agricultural products but were instead meant to modulate the means of production to limit pollution and repair air, land, and water resources. The reforms came in two parts. The first included a broad set of laws and proclamations that set out new goals and standards to safeguard natural resources at the national level, with specific provisions for agriculture. The second included mechanisms for achieving national and sectoral goals, including support for a series of experimental pilots, often designed around implementing alternative production technologies. While the changes to agricultural policy were foreshadowed through broad policy proclamations, the practical policy goals and implementing instruments were developed in a relatively short period, from 2014 to 2019, beginning with the strategic policy document, Several Opinions on Comprehensively Deepening Rural Reform and Accelerating the Promotion of High-Efficiency and Low-Carbon Agriculture, issued by the State Council in 2014. This document signaled a shift from production and productivity objectives intended to supply rapidly expanding food demand to objectives that included sustainability goals and environmental remediation. The vision emphasized the expanded use of new, greener technologies. In 2021, China’s Number One Document reaffirmed the approach, supporting the green development of agriculture and accelerating the transition to high-efficiency and low-carbon agriculture. Between 2015 and 2019, China’s State Council took significant steps to reset natural resources management (NRM) policies and laws, issuing the Water Pollution Prevention and Control Action Plan (2015); the Action Plan for Zero Growth in Pesticide Use by 2020 (2015); a revision of the Environmental Protection Law (1980, 2015); the Pollution Prevention and Control Action Plan (2016); a revision of the Water Law (2002, 2016); a revision of Air Pollution and Control Law (2000, 2016); the Soil Pollution Prevention and Control Action Plan (2016); a revision of Pesticide Management Regulations (1997, 2017); and a revision of the Law on the Prevention and Control of Soil Contamination (2019). The scope of China’s Green Policies expanded significantly again in 2021 when the St ate Council released its Guiding Opinions on Accelerating the Establishment and Improvement of a Green and Low-Carbon Circular Development Economic System, which set the goal of decelerating the growth of carbon emission so that annual emissions reach a “peakâ€? target by 2030 and thereafter fall to a “carbon neutralâ€? path by 2060. That same year, the Ministry of Ecology and Environment (MEE) and the Ministry of Agriculture and Rural Affairs (MARA) jointly formulated the Agricultural Nonpoint Source Pollution Control and Supervision and Guidance Implementation Plan to further prevent and control agricultural nonpoint source (NPS) pollution, reaffirming China’s natural resource remediation goals. The goals were emphasized again when the government unveiled its National Agriculture Green Development Plan in late 2021. The plan, jointly issued by MARA, the National Development and Reform Commission (NDRC), the Ministry of Science and Technology (MOST), the Ministry of Natural Resources (MNR), MEE, and the State Forestry and Grassland Administration (SFGA), identified resource protection, pollution control, restoration of agricultural ecology, and the development of low-carbon agricultural industrial chains as key goals to be achieved between 2021 and 2025. The new policies and implementation rules collectively influenced how water, soil, and air resources were managed and how related markets operated. However, the most crucial and direct elements affecting natural resource sustainability were the hard constraints placed on agricultural inputs. 73 3.2.1 Implications for Agricultural Policies The new agricultural policies were meant to limit agriculture’s natural resource footprint by reducing water use, improving soils, and limiting agricultural pollution. To support those goals, policies were implemented to develop and promote alternative production technologies to maintain current production levels and sustain future productivity growth. In the short term, this meant a shift to alternative technologies based on agronomy that substituted processed natural inputs, like manure and straw, for polluting chemical inputs, like fertilizers and plastic film. Longer-term, it meant promoting another set of technologies based on digital information technologies, like sensors and location trackers, and machinery, like tractors and irrigation systems, capable of utilizing digital technologies. Because these technologies work best at scale, concurrent programs were put in place to speed up the transformation of China’s farming system, a process already underway due to the decades-long sectoral transformation of the Chinese economy and Chinese labor markets. And finally, a matching set of programs was put in place to transform China’s massive research and extension system away from its historical role of supporting resource-intensive technologies based primarily on traditional branches of agricultural sciences to a mission supporting newer, greener technologies based on a multidisciplinary set of innovations. 3.3 Limiting Agriculture’s Natural Resource Footprint The practical implications of the new national policies for agricultural resource use are broadly outlined in the 2015 MARA document, Implementation Opinions of the Ministry of Agriculture on Preventing and Controlling Agricultural Nonpoint Source Pollution, which introduced the notion of “one control, two reductions, and three basics,â€? general requirements to promote the green transformation of China’s agriculture. “One controlâ€? refers to strict controls on the total amount of water used in agriculture; “two reductionsâ€? refers to targeted reduction in fertilizer and pesticide use; and the “three basicsâ€? refers to recycling goals for livestock manure, crop straw, and agricultural plastic film. A related set of ideas appeared at the national level in 2017 when the State Council issued its Opinions on Innovating Institutions and Mechanisms to Promote Agricultural Green Development , which stated the objective of maintaining the size and quality of existing arable land, preventing the overextraction of groundwater, pursuing net zero growth in the use of chemical fertilizer and pesticide, and enhancing the circular use of agricultural wastes, such as straw, farm animal manure, and agricultural plastic film. 3.3.1 Water Water scarcity emerged as one of the earliest indicators of resource constraints. In China, water availability per capita is low by international standards, roughly a quarter of the global average. Moreover, water scarcity is most acute in provinces north of the Yangtze River, which accounted for 60 percent of agricultural production in 2015. Further, about 70 percent of China’s irrigated land is in 13 major northern grain-producing provinces (Bo 2021). An overextraction of groundwater has been especially problematic in this part of the country, with average extraction rates at 105 percent of sustainable levels. Although agriculture accounts for most of China’s water consumption, a revision to the Water Pollution Prevention and Control Law in 2008 put national water plans under coordinated management by 12 ministries, including the Ministry of Environmental Protection (now MEE), NDRC, MOST, Ministry of Industry and Information Technology, Ministry of Finance (MOF), Ministry of Land and Resources, Ministry of Housing and Urban-Rural Development, Ministry of Transport, Ministry of Water Resources, Ministry of Agriculture (now MARA), National Health and Family Planning Commission, and the State Oceanic Administration. A significant change, discussed in greater detail in Bo (2021), occurred in the 2011 national plan, which tightened controls on water pollution and water use, introduced improved monitoring systems, and set goals for water efficiency improvements. The plan capped annual water use at 670 billion m 3 by 2020 and set a maximum extraction rate of 700 billion m3 by 2030. 74 In 2016, the State Council issued the Opinions on Promoting the Comprehensive Reform of Agricultural Water Prices, laying the foundations for water pricing and markets. The policy contains three core elements. The first requires localities to clarify major crop irrigation quotas and improve their basic irrigation systems to adequately control and measure water use. The second is to construct reasonable water pricing and water- fee collection mechanisms based on delivery costs and farmers’ capacity to pay. Th e third is to establish a water-saving establishment and subsidy mechanism and use economic means to reward and compensate farmers for water-saving behavior. The implementation period is ten years, which means the water-pricing system should be in place by 2025. In 2019, the National Water Conservation Action Plan aligned national goals to specific irrigation goals for agriculture. In addition to meeting flatline extraction goals for the sector overall, the plan aims to increase the effective use coefficient, a technical term for the ratio of water used on the farm relative to the source water extracted, to 0.56 by 2022. 3.3.2 Fertilizers, Pesticides, Straw, and Plastic Film Policies affecting this set of agricultural inputs derive from economy-wide laws to remediate water, air, and soil resources. For example, Article 8 of the 2015 Water Pollution Prevention and Control Action Plan sets out to avoid soil deterioration from farming methods and excessive chemical inputs. Article 19 calls for zero growth in fertilizer and pesticide use by 2020. The 2016 Soil Pollution Prevention and Control Action Plan contains provisions to subsidize less toxic and low-residue pesticides and calls for waste agricultural plastic film recycling. The 2016 Air Pollution and Control Law placed restrictions on straw burning. Because of its large geographic footprint, agriculture is a leading source of NPS pollution in China (Cassou et al. 2022). For example, according to the Bulletin of the First National Survey of Pollution Sources issued in 2010, most water pollution in China originates in agriculture. Runoff containing chemical fertilizers and pesticides is a primary source of water pollution, as is runoff from untreated animal waste (Zhang et al. 2004; Chen, Zhang, and Gong 2021). The health costs caused by water pollution were estimated to be equivalent to 1.9 percent of China’s rural GDP (World Bank 2007). The excessive use of fertilizers and pesticides also causes land degradation, accelerates soil acidification, and contaminates crops. Without proper treatment, sewage irrigation, farm animal manure, and straw can introduce antibiotics, drug-resistant bacteria, and poisonous heavy metals to soils and cause irreversible damage to the land ecosystem. Plastic film, used as an artificial mulch, often goes uncollected, remaining to mix with soils and water runoff. Pollution from manufacturing and other sectors adds to the problem. Nationally, 16 percent of soils were polluted, and 19 percent of the arable land was contaminated by heavy metals, including chromium, nickel, and arsenic (Chen, Zhang, and Gong 2021). Straw burning on farmland occasionally occurs in rural areas (Chen, Zhang, and Gong 2021), leading to seasonal air pollution (Lemieux, Lutes, and Santoianni 2004; Estrellan and Iino 2010; Sun et al. 2016), which significantly raises the urban PM10 concentration and undermines air quality (Liu, He, and Lau 2020). 3.3.3 MARA’s Five Major Actions One of the most comprehensive statements on the practical implications of the policy shift for agricultural policy is given in MARA’s Notice on the Implementation of the Five Major Actions for Green Agricultural Development (2017), which mandated the following: 1. Animal waste management. Local governments are charged with monitoring and managing manure from large livestock and poultry operations. The program also supports pilot projects to build facilities to better manage waste and convert it into safe organic fertilizer. 2. Straw waste management. This program component is meant to eliminate open straw burning and utilize field wastes for feed and fertilizer. Pilots promote the use of straw-collecting machinery. 75 3. Replacing chemical fertilizer with organic fertilizer to produce fruits, vegetables, and tea. This component promotes the replacement of chemical fertilizer with organic fertilizer and accelerates the promotion of using livestock and poultry farming wastes and crop straw as a resource for targeted crops. 4. Agricultural film recycling. This component pilots ways of controlling “white pollutionâ€? on farms, that is, problems associated with discarded plastic ground covering. 5. Protecting aquaculture resources. These actions are meant to establish aquatic biological reserves and restore the fishery ecological environment along the river by better managing fish stocks and fishing fleets. As with the rollout of the HRS reforms decades earlier, MARA’s Five Actions Plan relies on pilots to inform a national shift in policy. For example, initially, new standards for animal waste management will only apply to large livestock and poultry operations, and the new straw treatment rules would apply, initially, only to counties in Northeast China. The use of organic fertilizers for fruit, vegetables, and tea is being piloted in 100 key counties; the aquatic measures will be piloted on the Yangtze River; and pilots to limit plastic film waste through recycling programs in combination with the increase in the use of natural mulches involve constructing 100 demonstration centers focused on cotton, maize, and potatoes in the northwest. 3.3.4 Transforming Research and Dissemination Institutions China’s public support of science, research, and extension institutions is a key element of a policy framework that sustained agricultural productivity growth over decades. China’s new policy framework relies on these same institutions to deliver an equally productive set of greener technologies to China’s farmers. China has the world’s largest agricultural research and development (R&D) system, which is dominated by the public sector. China has 96 agricultural universities and 1,014 agricultural research institutes that are institutionally separate from the education system. In 2018, the number of full-time agricultural R&D researchers reached 63,184, of which 78 percent worked in agricultural research institutes and the remainder in universities. China’s public agricultural research institutes are decentralized, with most research institutes at the prefectural level. In 2018, national, provincial, and prefectural research institutes accounted for 6.9 percent, 40.4 percent, and 52.7 percent, respectively, of the total number of research institutes. MARA, the National Key R&D Program (NKP), the National Science Foundation of China (NSFC), the China Academy of Agricultural Sciences (CAAS), and the China Agricultural University (CAU) are key public stakeholders (Chen, Zhang, and Gong 2021). Over the years, there have been gradual shifts in how research budgets are spent. Still, most expenditures are for crops, although the share of R&D expenditures on crops has dipped from 61.8 percent in 2002 to 57.4 percent in 2018. By comparison, R&D expenditures on basic research have been small but growing; their share in total agricultural R&D expenditures doubled from 2002, reaching 19.7 percent in 2018 (Chen, Zhang, and Gong 2021). Several key policy documents signaled the intent to redirect technology development and farmer support to green technologies. In 2016, the State Council issued the 13th Five-Year National Science and Technology Innovation Plan, which outlined the goal of advancing modern agricultural technology with high-efficiency, safety, and ecological benefits and establishing a modern agricultural technology system characterized by informatization, biotechnology, intelligent production, and sustainable development. In 2017, the State Council issued its Opinions on Innovating Systems and Mechanisms to Promote Agricultural Green Development. It specifically addressed the structure of R&D institutions, stating the goals of building a scientific and technological innovation system to support green agricultural development; improving the mechanism of collaborative research among research institutions, universities, enterprises, and other innovative entities; and carrying out joint research on science and technology relevant to green agricultural production (Chen, Zhang, and Gong 2021). 76 Both MARA and MOST issued plans supporting the national directives at the ministry level. In 2017, MARA issued its own 13th Five-Year Agricultural Technology Development Plan, outlining how the ministry would promote the wide application of biotechnology, information technology, and material technology in the fields of improved seed cultivation, efficient production, food safety, resource use, and equipment manufacturing; and gradually realize the transformation of agricultural development from relying on resource inputs to one that leverages a broader set of newer technologies. In 2018 the Technical Guidelines for Green Agricultural Development (2018‒2030) were issued, including support for constructing the agricultural green technology innovation system and improving agricultural resource use. In 2019, MOST issued its Special Plan for Innovation-Driven Rural Revitalization and Development (2018‒2022), which included programs to support agricultural science and technology innovation. 3.4 Strategic Technologies Researchers and policymakers have identified a set of available technologies that could help China meet its policy goals. Some technologies are culled from academic studies; however, several are important components of pilots backed by MARA and MOST. This section highlights several promising technologies gleaned from four detailed background papers: Yang and Jiang (2021); Chen, Zhang, and Gong (2021); Bo (2021); and Wu (2021). Bo (2021) examines available technologies that would improve the delivery of water from the source to the field, technologies implemented to increase irrigation productivity, and data-driven management systems that provide a way to control water allocations among fields and farms. 3.4.1 Technologies to Improve Water Efficiency Source to the field. Pipeline technology can limit transmission losses to 5 percent or less. Cost-effective methods include lining channels with concrete, plastic, or clay, either completely or in areas where the channels pass over more porous soils. The benefits vary considerably, depending on local conditions. For example, for some irrigation areas supplied by groundwater, canal seepage is recovered as the water recollects in aquifers. In other locations, canal seepage can raise soil salinity and greatly diminish soil fertility (Bo 2021). Adding sprinkler systems, including drip irrigation systems, allows water to be delivered more frequently and in smaller quantities. Field operations. There are additional ways to improve water management once it arrives on the field. Some effective approaches are simple, like field leveling and burrow design. Irrigation systems can also be operated at less than full capacity to minimize leakage and optimize irrigation timing. Newer technologies, like laser-based leveling systems, allow for more precise modifications. Agronomy-based improvements include mulch application and deficit irrigation methods. Biology-based improvements include the use of drought-tolerant and water-saving cultivars. More sophisticated systems use drip irrigation and advanced digital systems where water use is monitored and controlled at the nozzle head. Integrated controls and data. Some of the most promising technologies integrate engineering components that efficiently deliver water, sensors and data collection systems that describe water use, and digital platforms that better inform water use decisions. Once in place, the systems can be combined with economic innovations, like water pricing and water quota trading systems. An example from a pilot project in the Hai River Basin is described in Bo (2021). The pilot provided funds to local water user associations (WUAs) to create and operate computer-based platforms to manage irrigation quotas. Sensors linked to the database track individual farmers’ pumping times and water use against quota allocations. Farmers book irrigation time slots and perform other tasks using mobile phones. Irrigation schedules, water use, and other information are accessible to all farmers, and historical data can be used to improve the performance of the overall irrigation system. 77 3.4.2 Technologies to Reduce Chemical Input Pollution To a degree, any technology that improves land productivity reduces agriculture’s natural resource footprint since it means less land is needed for agriculture, freeing up land for other purposes, including resource conservation. That said, the technologies featured here do more, improving efficiency by limiting the use of polluting inputs. Some innovations rely on sophisticated machines, while other technologies originate in more traditional agricultural sciences like agronomy and plant breeding. Other technologies rely on data systems that collect and distribute better location-specific data to improve decision-making. Precision applications. These technologies target inputs to reduce overuse. One approach, based on agronomy, is to use “side-deepâ€? fertilization in rice fields, a practice that places fertilizer at the base of the plant as an alternative to less efficient surface fertilization (Wu 2021). Another example that limits fertilizer use leverages sophisticated irrigation systems. For example, a pilot program in Huang-Huai-Hai Plain combines real-time monitoring, drip irrigation, and fertigation (fertilizers delivered through irrigation systems) to increase fertilizer-use efficiency by 7–9 percent (Wu 2021). Data collection, management, and dissemination. Some innovations involve making better use of information to inform decisions and analyze outcomes. A good example is a program that uses soil testing to build customized advice on fertilizer use (Wu 2021). In the program, agriculture departments use soil tests to distribute customized recommendation cards to farmers. National experimental results reported by CAAS showed that fertilizer application through soil testing increased yield by an average of 15.0 percent for rice, 12.6 percent for wheat, 11.4 percent for maize, 11.2 percent for soybeans, 15.3 percent for vegetables, and 16.2 percent for fruits. The current pilot encompasses almost 128 million ha. Another example of a piloted information-based technology involves the placement of self-contained wireless field monitors that sample for pest infestations and provide early warnings to farmers when pests are detected (Wu 2021). The system reduces pesticide use by eliminating unwarranted applications and, when warranted, increases pesticide use efficiency by coordinating the applications among neighboring farms. Machines and data generation. China’s agricultural policies are meant to address two seemingly separate goals, remediating the natural resources that sustain agriculture and addressing production constraints related to an aging and shrinking agricultural labor force. Capital-intensive machines and systems can be important for addressing both goals. In addition, labor-saving investments in machines can be leveraged to collect data that inform decisions and data that other machines use. Two examples include the precision planting machines and combine harvesters discussed in Wu (2021). In both cases, the technologies are labor-saving. And although they have little impact on water use or chemical input use directly, when equipped with geo-location and soil moisture sensors linked to data platforms, the machines help create field maps that are subsequently used to improve the precision of fertilizer applications and targeted irrigation systems. Backbone technologies. Data generation and utilization applications rely on China’s rapidly expandin g communications network. In 2000, less than 7 percent of the population had mobile phone service, and less than 2 percent used the internet. Moreover, mobile phones and internet access were rare in rural areas. As telecommunications infrastructure and incomes grew, and as handset and computer prices fell, mobile phone and internet use became common in China. By 2020, there were more mobile service plans than people in China, and more than 70 percent of people accessed the internet (World Bank 2022). Increasingly, private platforms, like Alibaba’s Taobao, complement public platforms to provide better internet access in rural areas. These technologies link farmers and machines to platforms that gather and combine data from remote sensors on land, air, and space and location data from global positioning systems (GPS) and BeiDou (a satellite-based radio navigation system developed by the China Space Science and Technology Group), which then link farmers to markets. Improvements to communication systems, like fiber optics and 5G, increase the speed of these connections. 78 3.4.5 Mechanization Policies In the past, China’s mechanization policies were separate from China’s resource management policies. Starting with the Agricultural Mechanization Promotion Law of 2004 , the goal of the mechanization policy was to promote productivity gains by replacing manual field operations with more powerful and sophisticated machines. As discussed more fully by Yang and Jiang (2021), the policies emphasized grains and oilseeds and were broadly successful; between 2004 and 2015, mechanized crop cultivation and harvesting increased from 36 percent to 62 percent of cropland. More recently, mechanization policies have become linked to agricultural natural resource goals. Emission standards were the earliest examples. In 2014, rules implementing the Prevention and Control of Atmospheric Pollution and the Air Pollution Prevention and Control Action Plan tightened emission standards for exhaust pollutants from farm machinery diesel engines. Emission standards were tightened again in 2020 when the MEE issued the National Environmental Protection Standard , or the Technical Policy for the Emission Control of Pollutants from Non-Road Diesel Mobile Machinery. Under the new rules, most farm equipment would meet the same emission standards as those set by the European Union in December 2022. China’s new agricultural resource remediation policies were evolving as mechanized field operations became more common in rural China and agricultural machines became more sophisticated. One important consequence was that natural resource goals were interwoven into what had been a separate set of mechanization policies. An early example was using tractors and plowing equipment to implement better soil management practices. For example, in March 2020, MARA and the MOF jointly issued the Action Plan of Conservation Agriculture for Black Soil in Northeast China (2020–25), which deployed the comprehensive promotion and adoption of conservation agriculture (CA). The project set a goal of implementing CA on over 9.3 million hectares by 2025, accounting for about 70 percent of the total arable land. (See Anderson et al. 2022 for a more complete discussion of the bundle of technologies that comprise CA). In broad terms, current mechanization policies continue efforts to expand the use of machinery on China’s farms, but with an added emphasis on replacing older machines with newer, smarter machines. Key policy documents include the Three-Year Action Plan to Enhance the Core Competitiveness of the Manufacturing Industry (2018‒2020) issued by the NDRC and Document No. 1 of 2018 of the CPC (Opinions of the Central Committee and State Council on Implementing the Strategy for Rural Revitalization ). The aims of the new smart technologies are laid out in Article 18 of Chapter II of the 2021 Law of the People’s Republic of China on Promotion of Rural Revitalization to achieve two integrations—the integration of mechanization and agronomy and the integration of mechanization and digitization. The policy has several key implementing components. The first are incentives for farmers to scrap old machines and purchase new ones. For example, in 2012, a pilot program that started in 12 provinces and expanded to 16 provinces in 2016 and 19 provinces in 2017 provided more than CNY 410 million to scrap 129,000 older machines. It also provided CNY 1.81 billion to purchase newer, smarter equipment. Figure 3.11 reports annual subsidies provided by the Central Government Fund to purchase new machinery from 2000 to 2019. As Yang and Jiang (2021) discuss, several provinces provide additional related subsidies for hire mechanization services, including planting, harvesting, and pesticide applications. 79 Figure 3.11: Annual Subsidies for the Purchase of New Farm Machinery, 2000–19 25,000 20,000 15,000 Million CNY 10,000 5,000 0 Source: Yang and Jiang (2021) A second element is strong public investment in machine-focused research and extension. In 2017, the national and provincial governments supported 67 agricultural machinery research institutions, including 24 national and provincial research institutions. There were 62 national agricultural machinery testing and appraisal institutions and 2,519 agricultural mechanization technology extension institutions. Nearly 60 colleges and universities in China offer undergraduate agricultural engineering and agricultural mechanization programs. The discipline of agricultural engineering has more than 40 master’s degree - granting centers and 15 doctoral degree-granting centers. Nine universities are authorized to confer doctorate degrees in agricultural engineering, and 11 are authorized to confer doctorate degrees in agricultural mechanization engineering. The total number of undergraduate students, master’s candidates, and doctoral candidates who majored in agricultural engineering in China were more than 16,000, 1,500, and 300, respectively. Every year, about 4,500 agricultural machinery professionals are trained for the industry. From 2016 to 2020, the central government allocated about CNY 980 million to support research related to mechanization. While the central objective of mechanization research is devoted to adapting machine technologies to a variety of landscapes, special attention is given to the hilly and mountainous areas of China, which remain poorly suited to the current set of machine technologies. This creates a significant challenge to the government’s strategy of increasing mechanization since China’s hilly and mountainous counties cover about 47 million hectares of arable land, accounting for more than 34 percent of the country’s to tal. This motivates the third element of mechanization policy, pilot studies that convert lands ill-suited to mechanization to “suitable for mechanizationâ€? landscapes , using engineering methods to aggregate and level existing farm plots. For example, between 2019 and 2020, pilot programs in Chongqing, Shanxi, Hubei, Hunan, Guangxi, Gansu, and other provinces invested CNY 7.6 billion to transform over 233,000 hectares of hilly and mountainous farmland. Yang and Jiang (2021) provide descriptions of pilots in the Shanxi, Hunan, and Chongqing Provinces. Since 2004, the Chinese government has regularly reaffirmed the importance of maintaining a minimum of 120 million hectares of arable land in China, and the intent of the “suitable for mechanizationâ€? program is to retain some marginal lands and convert them, through engineering, to cropland that can be better managed (Anderson et al. 2022). Still, as Chen et al. (2021) note, there has been little evaluation of the environmental impacts of “suitable for mechanizationâ€? projects. Potentially, the programs could produce environmental benefits by leveling fields and shoring up areas prone to erosion. At the same time, the leveling exercise could recreate problems associated with poor decisions made in the 1980s that carved new farms out of hilly landscapes prone to erosion, actions that were later remediated at substantial costs. Notable examples discussed in Jaffee et al. (2022) include the Grain for Green programs and the Natural Forest Conservation Project, which reconverted farmland into grasslands and forests. In the end, the larger 80 impacts of the program on landscape resources are likely very much location-specific, and it is unclear how the level of consideration of environmental impacts is used in choosing project sites. 3.5 Achievements, Challenges, and Market Innovations As discussed, China’s current agricultural policies set out to maintain production and productivity gains in the sector while protecting and remediating the natural resources that sustain agriculture. This section reviews some early achievements resulting from the policies, ongoing challenges, and market innovations that are integral to the ultimate success of current policies. 3.5.1 Achievements Zero Growth in the Use of Chemical Fertilizers and Pesticides. Nitrogen fertilizer use decreased from 23.8 million tons in 2012 to 19.3 million tons in 2019, a compound annual decrease of 2.31 percent and a cumulative decrease of 18.95 percent. Potash and phosphate fertilizer used dropped from 6.40 million tons and 8.43 million tons in 2015 to 5.61 million tons and 6.82 million tons, respectively, in 2019, with a compound annual decrease of 0.84 percent and 2.02 percent and a cumulative decrease of 7.3 percent and 16.8 percent, respectively. In 2019, pesticide use returned to around its 2004 level after falling for six consecutive years. Promoting the Use of Livestock and Poultry Manure Resources. Pilots were successfully launched that focused on large livestock and poultry operations to construct manure treatment and resource use facilities. The pilots also explored livestock and poultry manure resources as an alternative to chemical fertilizers. In 2020, the national comprehensive use rate of livestock and poultry manure surpassed 75 percent, and the supporting rate of manure treatment facilities for large-scale farms surpassed 95 percent (Wu 2021). Comprehensive Use of Crop Straw. The government launched several pilot programs to explore technologies that recover straw during harvesting and systems to store and distribute straw resources to farms. Since 2015, the central government has allocated CNY 800 million each year to implement a soil- organic-matter-improvement subsidy program to encourage and support farmers to return straw to the field. At the same time, 17 types of machines related to the comprehensive use of straw were added to the agricultural machinery purchase subsidy program. As of 2020, the comprehensive use rate of straw exceeded 85 percent (Yang and Jiang 2021). Recycling of Agricultural Film. In 2019, the use of agricultural film nationwide was 2.408 million tons, a decrease of 2.38 percent from the previous year. Furthermore, the coverage and use of mulch film across China have achieved negative growth, the recycling rate of agricultural film has reached 80 percent, and “white pollutionâ€? in key areas has diminished. Expanding the Backbone for Digital Agriculture. The Information into Villages and Households Project has been implemented in 18 provinces with more than 70,000 business sites. As of 2021, more than 30,000 drones have been used during the spring plowing period in China. More than 20,000 tractors are now equipped with the BeiDou navigation satellite system, and more than 20,000 machines are equipped with precision systems. Moreover, the precision operation of agricultural machinery has exceeded 20,000. In 2020, Guangzhou Amy Farm’s rice fields achieved 5G signal coverage (Wu 2021). Mechanization. In the first three-quarters of 2020, large-tractor production reached 47,500 units, an increase over 2019. At the same time, the total power of agricultural machinery mainly used for various activities for agriculture, forestry, animal husbandry, and fishery reached 1.027 billion kilowatt-hours, an annualized increase of 2.3 percent. Moreover, the national comprehensive mechanization rate of crop cultivation and harvesting increased from 64 percent in 2015 to 70 percent in 2019. New intelligent machines and systems have facilitated production technologies that lessen agriculture’s natural resource footprint, including low-fragmentation maize grain harvesting, CA soil management, 81 straw returning, cotton picking with residual film recovery, mechanized transplanting of rice, synchronous side-deep fertilization, and waste disposal for livestock and poultry. In 2019, CA adoption areas reached 8.2 million ha, mechanized no-tillage seeding areas reached 14.6 million ha, precision seeding areas reached 43 million ha, mechanized deep fertilization areas reached 35.8 million ha, and mechanized straw-returning areas reached 54.3 million ha, and straw picking and baling areas reached 8.8 million ha. Figure 3.12 shows mechanization and pesticide use trends from 2010 to 2019 (Yang and Jiang 2021). The figure depicts a decrease in pesticide use due in part to increased mechanized application. Figure 3.12: Trends in Mechanization and Pesticide Use 200 50 180 45 160 40 140 35 percentage 10,000 tons 120 30 100 25 80 20 60 15 40 10 20 5 0 0 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Pesticide use Mechanization level Source: Yang and Jiang (2021). Note: Pesticide use is expressed in tons of product. Building Economies of Scale Most farms in China are small, and for decades, China’s agricultural policies have relied on technologies well-suited to small household farms. As discussed, the technologies rooted in Green Revolution breeding innovations are land-saving but otherwise resource-intensive. Moreover, while the Green Revolution planting materials are scalable, the traditional farming methods used in China are both labor- and resource- intensive. For both reasons, current agricultural policies promote a switch to alternative technologies. Still, the labor-saving mechanized technologies needed to address the ongoing shift of labor from agriculture to other sectors are capital-intensive and subject to economies of scale. The portfolio of technologies needed to address natural resource constraints is mixed and includes important scalable agronomic innovations and scalable improvements in genetic material from animal- and plant-breeding research. Still, many of the precision technologies that rely on smart machines, irrigation systems, and data platforms needed to reduce agriculture’s resource footprint are best suited for larger farms. Consequently, achieving economies of scale is central to China’s policy goals. Moreover, there is emerging empirical evidence that increased farm scale addresses both problems. Using a nationally-representative rural household survey, Wu et al. (2018) found that a 1 percent increase in farm size was associated with a 0.3 percent decrease in per-hectare fertilizer use and a 0.5 percent decrease in pesticide use. 82 In the early decades, there were mixed estimates about the distribution of farm sizes in China; however, it is likely that, on average, China’s farms grew smaller between the 1980s and 2000 and have grown only slightly larger since (Lowder, Skoet, and Raney 2016; Wu et al. 2018). Regardless, all evidence shows that most farms in China are small. For example, Table 3.1 reports the estimates from a representative survey of 4,678 farms taken by MOST in 2019 and 2020. The data suggests that most farmers managed small plots, with an average size of about half a hectare; the area cultivated by large growers averaged 6.8 hectares, and the area cultivated on large family farms averaged 11.8 hectares. If the sample results hold for the country, this would suggest an average farm size of 1.25 hectares on nearly 160 million farms. Table 3.1: The Distribution of Farms by Size in China, 2019 –20 Smallholders Large Growers Family Farms All Farms Average cultivated area (ha) 0.50 6.80 11.80 1.25 Share of farms (%) 60.00 24.00 16.00 100.00 Area farmed (million ha) 76.81 30.73 20.47 128.00 Number of farmers (million) 153.61 4.52 1.73 159.86 Sources: Yang and Jiang (2021) International experience suggests that land consolidation occurs slowly in places where most farms are initially small; however, features of China’s land and internal migration institutions have likely placed additional constraints on the pace of land consolidation. Rural land law (known as “three rights separationâ€?) separates ownership, contract, and use rights to promote land transfer and large-scale farming. However, households in China must register as rural hukou or urban hukou. Under the HRS, rural communities allocate land among village households (rural hukou). Households can work the allocated land, transfer the land to family members, transfer the use rights to others, or return the land to the village collective. At the same time, because urban incomes are higher than rural incomes, many younger members of rural households move from rural communities to take jobs in other sectors, often as temporary workers (Zou, Mishra, Luo 2018). Even though surveys show that less than 9 percent of rural migrant workers showed a willingness to return to their rural communities to farm, rural workers who have not been formally reclassified under hukou are usually unwilling to relinquish their land-use rights, in part because they do not yet receive urban hukou benefits (Meng 2012; Yang 2013). This keeps the effective control of land fragmented. The ongoing restructuring of rural labor markets has an additional impact on agricultural land. Research shows that local sectoral migration, in the form of full- and part-time off-farm work in rural areas, increases land abandonment. Based on national data, one recent study suggests that, on average, a 10-percent increase in off-farm income in a rural community leads to a 3 –5 percent abandonment of land farmed by the community (Xu et al. 2019). Although the process of land consolidation is slow in China, other market innovations have allowed China’s small farms to access market innovations, including using fee-based service providers for mechanization and farm management services and land trusts. Machine Hire Services. International experience shows that owners of large farms have better access to capital than smallholders. For a fee, hire services allow smallholder farmers to access capital-intensive farm machinery without making large upfront investments. Often, hire services are set up by independent companies, but there is an increasing trend for farmers to collectively invest in hire service cooperatives (Figure 3.13). The size of the mechanized service market is astonishingly large (Table 3.1), especially considering that in 2020 the area farmed was 128 million hectares, and the number of farmers was about 159.86 million. In 2019, about 41 million farming households used machines provided by more than 192,000 agricultural machinery service providers. 83 Figure 3.13: Growth in Machine Hire Services, 2008–19 250 44 43 Thousand organizations 200 42 Million households 41 150 40 39 100 38 50 37 36 - 35 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Other hire services Cooperative hire services Hire service users Source: Yang and Jiang (2021) Advisory Services. Larger farms often benefit from more highly skilled management and are sometimes better informed about available technologies. Traditionally, public extension agents provide information to farmers individually or in small groups, a practice that may also favor larger farms. Digital technologies can extend the capacity of agents and provide timely information “on -demand.â€? For example, relying on county-level soil testing and a formula fertilization expert system, Mingguang City in Anhui Province provides a one-click fertilizer ordering service through a mobile app, combining expert advice as an add- on service to fertilizer customers. Small farmers, who are less interested in learning new technologies and have less capacity to apply new techniques, can hire firms to advise and manage input applications. Although the public sector is still the main body of agricultural technology extension in China, the private sector and social organizations have made significant progress in the past decade. The services have played an important role in promoting soil testing and fertilizer application, green pest control, and other advanced production technologies, increasing the efficiency of reduced levels of chemical inputs. By the end of 2020, national specialized service organizations had reached 93,000, and the coverage of the three major grain crops reached 41.9 percent, 8.9 percentage points higher than in 2015. Aggregated Land Management Structures. A more comprehensive solution is to transfer operational rights to an aggregating entity. Wang and Zhang (2017) provide examples of four types of transfers currently used to consolidate land holdings in China: (1) from farmers to a collective, (2) from farmers to a collective and then to leasehold farms, (3) from farmers to leasehold farms, and (4) from farmer to farmer. In all cases, the goal of the transfer is to achieve a greater operational scale. In the simplest case, farmers trade operational rights for scattered plots to build a farm of contiguous plots. In this case, the absolute size of a farm does not change, but the farm is compact rather than fractionalized. Among other benefits, this makes the farm better suited for mechanization. In some cases, land operations are transferred to potentially larger farm operators, either managed by the village collective (case 1) or by a leaseholder (case 4). In other cases, the use-right transfers, but not the land itself, can be managed either by the collective (case 2) or through a separate structure, like a land trust (case 3). This approach can lead to larger, more compact farms better suited for mechanization and marketing. Contracted services can be hired to achieve additional scale economies in all cases. 84 3.5.3 Building Markets to Manage Resources As more fully described in Bo (2021), the government of China clarified water-use rights with allocations for agriculture, municipalities, and conservation, among others. In addition, as described earlier, capital investments have been made to better transport, monitor, and manage water for irrigation. In most instances, water is managed in many WUAs by allocating quotas. Traditionally, water has been freely provided, although in some cases, water resource fees are assessed to cover the costs of maintaining wells and irrigation systems. Further, while the notion that the water itself has an underlying resource value is largely acknowledged, water pricing in practice is exploratory and limited to pilots. Water Taxes. One experimental approach levies a water tax on water used beyond a prescribed quota, while water used within the quota is not taxed. The approach was first piloted in Hebei Province in 2016, and the pilot was extended to nine additional jurisdictions in 2017: Beijing, Tianjin, Shanxi, Inner Mongolia, Shandong, Henan, Sichuan, Shaanxi, and Ningxia. The terms of the pilot are described in the Interim Measures for the Pilot Reform of Water Resource Tax, jointly issued by the MOF, the State Administration of Taxation (SAT), and the Ministry of Water Resources (MWR) in 2016; and the Implementation Measures for Expanding the Pilot Program of Water Resources Tax Reform issued in 2017. Not surprisingly, pilot outcomes show that pricing water generates water conservation. For example, in the Hebei pilot, a local steel company invested in its own water treatment facility rather than rely on freshwater withdrawals, saving 14.6 million m3 of water annually. In many places in the pilot regions, groundwater had been severely overexploited, which led authorities to set the average water tax rate for groundwater at 4.6 times the rate for surface water. In response, the structure of water use by enterprises has begun to change. Some enterprises have decreased groundwater use, transferred to surface water, and actively switched to unconventional water sources (rainwater, reclaimed water, seawater, mine water, brackish water, etc.). In the first half of 2018, the amount of groundwater extracted in the overexploited areas of the nine pilot provinces decreased by 9.28 percent on a year-by-year basis (Bo 2021). Trading Water Rights. China is also experimenting with trading water rights, which would help with price discovery. Bo (2021) provides three examples: regional water rights trading, water extraction permit trading, and irrigation water users’ water rights trading. Local governments hold water rights and are partners in regional water trading, which occurs between administrative regions within the same river basin or between basins. This can become complex in larger river basins that include multiple provinces. A recent transaction in the Hetao Irrigation District, Ningxia, involves a 25-year lease of 120 million m3 of water rights to 40 industrial enterprises in Ordos City and Alxa League at CNY 15/m3 for 25 years (Bo 2021). The procedures for the remaining two types of water trading are established, but lessons from ongoing pilots are yet to be gathered. In the case of water extraction permit trading, entities with the right to draw water, including industry, agriculture, and water users other than urban public water supply enterprises, that have saved water through product or industry structural adjustment, process innovation, or water- saving techniques, may sell their unused extraction rights to other qualified units or individuals, provided their right has not expired (Bo 2021). Irrigation water users’ water rights trading covers water rights traded between irrigation water users within WUAs or between WUAs within an irrigation system. Straw and Plastic Film Innovations. Because not all straw can be used where it is produced, the transformation of straw from a pollutant to an organic input requires the creation of a value chain in rural areas that collects straw from the fields, stores, transports, and delivers it for alternative uses. Pilots suggest that the process entails innovative applications of agronomy, advances in farm machinery, and establishing distribution networks. Ongoing farm pilots, described more fully in Wu (2021), explore several combinations of agronomy and machine technologies, including the deep plowing of maize stalks in the Northeast alpine region, the deep plowing of cotton stalks in the arid areas of the northwest, covering maize stalks by rotary tillage (Huang- Huai-Hai area), low-tillage and no-tillage straw mulch return model (Loess Plateau), rice and wheat straw smashing and rotary tillage return model (Yangtze River Basin), rapid decay of straw return model (South 85 China), straw-feed-fertilizer combined planting and breeding model, straw-methane-fertilizer energy ecological model, straw-bacteria-fertilizer substrate use model, and straw-charcoal-fertilizer return-to-soil model. Mechanization innovations include improving crop combine harvesting and straw processing, including machine crushing and return to the field, straw pick up and bundling, straw storage and transportation, and establishing straw field treatment systems (Wu 2021). Straw management and plastic film management are related; mulch from collected straw can serve as an alternative to plastic film, and straw and used film are often collected from the same or neighboring fields. Consequently, some pilots have been organized to incorporate both materials. For example, pilots are underway to explore ways to return straw to the field and collect residual film for recycling. Agricultural film recycling, regeneration processing, and use technologies have been explored in various regions, especially in dry farming areas (for example, Gansu, Ningxia, and Xinjiang), with some positive results. As of 2017, the number of residual film recycling machines in Gansu surpassed 10,000, and the mechanized recycling area reached 1.47 million hectares, accounting for nearly 80 percent of the total film coating area. The number of residual film recycling machines in Xinjiang was nearly 20,000, and the mechanized recycling area was approximately 1.4 million hectares, accounting for 60 percent of the total covered area. Ningxia has more than 1,300 residual film recycling machines. By 2017, 217 residual film recycling stations and 29 residual film granulation processing enterprises had been established in central and southern Ningxia, recovering 15,200 tons of residual film, bringing the regional residual film recycling rate to 90 percent (Wu 2021). 3.5.4 Adapting Knowledge Institutions to Support New Technologies To summarize from earlier sections, the technologies that have fueled China’s decades -long trajectory of productivity growth in agriculture have been based on the successful development and applications of agricultural sciences, especially agronomy and plant and animal breeding, the intensive technologies developed with smallholders in mind. The new technologies needed to remediate and conserve China’s natural resources and adjust to a shifting labor force continue to build on traditional agricultural sciences but also incorporate innovations that originated in other fields. Consequently, a broader and more multidisciplinary set of skills is required for farmers who adopt the piloted green technologies and for the research and extension services that support them. Research and Extension. The expanded multidisciplinary nature of new green technologies has implications for how the goals of China’s formidable research and extension network are managed. Currently, the development of green agricultural technologies is promoted by MOST and MARA. However, the technologies touch on air, water, and land resources, and the goals and regulations motivating the shift in technologies involve other ministries, chiefly the MWR and MEE. Coordination among key ministries can also help guide the next round of green technologies. Technologies that leverage data on natural resources currently siloed in separate agencies and managed in separate ministries are perhaps the best illustration of how coordination among the ministries is needed. Funding for research also follows the traditional classification associated with traditional agricultural technologies. Support for agricultural green technology research mainly relies on the original funding system, such as the modern agricultural industrial technology system and the NKP. In contrast, many agricultural green technology R&D topics belong to an expanded set of disciplines (Chen, Zhang, and Gong 2021). As a start, CAU established the National Academy of Agricultural Green Development and the College of Agricultural Green Development in 2018. Furthermore, CAU set up four cross-research and training platforms to carry out high-end skill education and scientific research. Earlier, in 2009, CAU developed a new mode of technology transfer for empowering smallholder farmers —Science and Technology Backyard (STB). Over time, the extension services were built to deliver information and training based on earlier technologies. And like the research institutions, they currently lack the skills needed to fully promote the new set of technologies. Moreover, the large network of researchers and extension services is 86 decentralized, so a repurposing of existing institutions will require action by a broad coalition of agency administrators and public funders. Farmers and Service Providers. As discussed, China’s population is aging, and its rural population is aging faster. Liao et al. (2019) report survey data from 2015, showing that 18.5 percent of the rural population was over 60 years old, compared to the national average of 16.2 percent. Between 1982 and 2015, as labor shifted from agriculture to other sectors, the rural population over 60 years old increased by 237 percent, compared to 192 percent in the city. Between 1990 and 2010, the average age of agricultural labor increased by 8.2 years (Liao et al. 2019). According to a 2017 survey, the average age of China’s agricultural labor force is 46 years old, among whom 67.5 percent are between 40 and 60 years old, while only 4.8 percent are less than 40 years of age (Yang and Jiang 2021). The shrinking labor force affects farmers working in the field but, more crucially, impacts the technical, business, and service industries. For example, the average age of members of agricultural mechanization cooperatives in China is still over 46 years old, and many chairpersons are more than 50 years old. Talent shortages are especially acute in the central and western regions, remote mountainous areas, and impoverished areas. With mechanization, the needed number of next-generation Chinese farmers and service providers will decline; however, the smaller group that remains in rural areas will need a different and more diverse set of skills. Part of the solution will come from changes in current college and university programs’ curricula and the content of services delivered by private and public extension and service providers. In addition, cooperatives and hire services have recruited young, college-educated staff. Yang and Jiang (2021) highlight efforts by the China Association of Agricultural Mechanization to recruit well-trained staff, especially college-educated women, a group that has been under-represented in the past. 3.6 Summary and Conclusions The government of China has launched a new set of agricultural policies designed to better balance production and productivity goals with natural resource protection and remediation. The success of the policies depends on the widespread adoption of a new set of technologies that combine discoveries from traditional agricultural sciences with innovations from other disciplines, including digital technologies. Some technologies, like those that depend on agronomy and plant breeding, are scalable, but others are capital-intensive and best suited for larger farms. This creates an obstacle to their widespread adoption since most farms in China remain small. That said, a decades-long shift in labor from agriculture to other sectors combined with an aging rural labor force has begun a process of farm consolidation that will likely quicken over the next decade. The new policies have already proven successful in significant ways. China has experience with programs that successfully reconvert cropland in ecologically-vulnerable areas to grassland and forests. Chemical fertilizer and pesticide use are declining. The practice of burning field straw, a major source of air pollution, is in decline. Early pilots are showing promise for recovering and recycling plastic film in agricultural fields. Backbone systems needed to deliver information to farmers and farm equipment have expanded to include most rural areas. Progress has been made on two important types of property rights and related markets. The first entails clarifying water rights among users and developing institutional arrangements to price water and trade water rights. In pilots, a better set of technologies for delivering, monitoring, and managing water use, combined with water-pricing incentives like taxes for above-quota water use, have improved system-wide water use efficiencies. Moreover, trading platforms are being established t o support users’ markets to efficiently reallocate water consumption among competing sectors. The second set of innovations relates to farmers’ land-use rights. Through emerging mechanisms like land trusts or land collectives, compact areas suitable for mechanization and unified management can be aggregated from smallholder plots without weakening the rights of individual farmers if adequate safeguards are in place. These arrangements complement a growing set of businesses offering hire services 87 for smart machines and advisory services. Taken together, these innovations can speed up the adoption of newer, greener technologies designed for larger farms years before demographics and labor restructuring eventually drives land consolidation. The broader set of agricultural policy goals, which incorporates aspects of land, water, and air resource management, and the multidisciplinary nature of emerging agricultural technologies, drives a need to change key agricultural institutions. For decades, most decisions related to agricultural policy implementation and the direction and dissemination of research could be adequately managed by MARA and MOST. Going forward, coordination among various ministries, including the Ministry of Natural Resources (MNR), MEE, and MWR, will be needed. Water policy implementation decisions are already coordinated across ministries and agencies, which may provide a model for an expanded set of decisions related to the agricultural sector. In the past, the important technologies driving sustained productivity gains were rooted in the agricultural sciences, reflected in the current skill sets among agricultural researchers and extension services. These skills will remain important for adopting newer, greener technologies and developing new ones. At the same time, some technologies, especially those that collect, process, and then disseminate data to farmers and farm machinery, reflect an additional set of skills. Reshaping China’s large and decentralized research and extension institutions to reflect this new interdisciplinary set of skills will be challenging and require a rethinking of research incentives. All of this will take time, even as income and population growth put constant pressure on the sector to produce more and as climate change alters agriculture’s natural resource base . Meanwhile, new resource- saving technologies will remain unfamiliar to many farmers, whose own skills also reflect the agro-science- based technologies used in the past. Some newer technologies, like innovations that use soil testing to improve the efficiency of fertilizer applications, will be familiar to most farmers. And in other cases, new technologies are largely embedded in physical capital, for example, machines that apply pesticides and fertilizer more precisely and can be adopted indirectly through hire services. 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Chen, and Zhang Yumei Synopsis China has made enormous strides in raising agricultural productivity, advancing national food security, and tackling rural poverty. Its agricultural sector is in the midst of a broad process of transformation catalyzed by major demographic, economic, and dietary changes. Both policy and fiscal support from the government have played important roles, contributing to past achievements and facilitating many ongoing structural changes. Government interventions have taken many forms and have evolved considerably over time, responding both to positive experiences and the unintended consequences of earlier interventions and reflecting changing national priorities. This paper highlights shifts over time in prominent agricultural support policies, institutions related to land and agricultural water management, and patterns of public expenditure related to agriculture and rural natural resources management. Some of the biggest challenges and opportunities now facing Chinese agriculture relate to its relationship with the environment. The past expansion and intensification of Chinese agriculture often came with a high environmental cost, locally and beyond. The forms and magnitudes of these adverse environmental impacts have been increasingly recognized, and over the past decade, a broad range of policy and regulatory initiatives have been adopted to restore or improve rural ecosystems, promote the development and adoption of green agricultural technologies, and otherwise incentivize more sustainable farm practices. This paper details elements of this policy and program effort to green Chinese agriculture, draws attention to emerging evidence regarding its efficacy, and highlights some important gaps or implementation challenges, suggesting important areas of unfinished business in the greening of Chinese agriculture. Despite an expansion in eco-agricultural programs over time, only about one-fifth of overall public expenditure in the agricultural sector is clearly geared toward advancing environmental or natural resource conservation objectives. More can be done to accelerate the green transformation of fiscal support to the sector. Farmer adoption rates for various sustainable practices have increased, yet there is still a long way to go, and likely a need to further improve eco-compensation and other incentive mechanisms and the approaches used for targeting certain programs. The objectives and instruments for the greening of agriculture can be better mainstreamed into the wider initiative on rural revitalization and better reflected in parallel efforts to strengthen rural financial services and promote a healthier diet. Other areas of unfinished business include refining the environmental indicators underpinning policy objectives, strengthening the monitoring systems related to those indicators, and enhancing certain programs and targets to better reflect local conditions and opportunities. 92 4.1 Introduction Over the past 40 years, China has made remarkable progress in developing its agriculture and rural areas. Agricultural gross domestic product (GDP) growth has been robust, averaging 4.5 percent per annum over this entire period. Rising productivity helped ensure food grain security, despite the country’s limited natural resources. While having only 6.6 percent of global freshwater resources and 8.6 percent of global arable land, China—with some 19 percent of the world’s population—has been able to meet about 95 percent of its total food demand in recent years. A more diversified production structure, featuring the expanded production of fruit, vegetables, animal products, and industrial crops, has effectively serviced the evolving consumer demand in its fast-growing and urbanizing economy and has supported the country’s agro-industrial development. Sustained agricultural growth and diversification, together with vibrant nonfarm rural and urban labor markets, have contributed to rural income growth and poverty reduction. Over the 1978 –2018 period, rural households' per capita incomes increased on average by 22 times in real terms. As a result, rural people living in poverty fell from 770 million in 1978 to only 551,000 in 2019. In 2020, China became the first developing country to meet the Sustainable Development target (SDG 1.1) of eliminating extreme poverty by 2030—10 years ahead of time. While these achievements are impressive, important challenges remain for China’s agriculture and rural development. For example, rising wages have increased the cost of food production and lowered China’s agricultural competitiveness in a global market. This raises concerns about national food security. Another food security concern relates to the lack of trust of many consumers in the safety of certain foods, associated with the intensive use of agrochemicals and veterinary drugs in farm production, among other factors. Climate change and weather volatility also pose major risks to the resource base of Chinese agriculture and to the livelihoods dependent upon it. Despite the steady growth in farmers’ incomes, the rural -urban income gap remains wide. In some areas, this gap may continue to widen along with out-migration and the more advanced aging of the rural population. Concerns also exist about further modernizing China’s agriculture as it is still predominantly based upon hundreds of millions of very small-scale farms. With this legacy structure of production, there are challenges related to the efficient delivery of agricultural services, the effective organization of value chains, and associated matters related to quality management, biosecurity, product and animal traceability, etc. From a long-term perspective, there are serious questions about who or what will constitute the next generation of farmers or farming enterprises and how to bridge the transition. Another major concern relates to Chinese agriculture’s very large environm ental footprint. The prior growth in production often came at the expense of resource and environmental degradation. For example, the quality of China’s arable land has been declining because of widespread soil erosion and salinization . The inefficient use of water for irrigation has resulted in water shortages. Excessive application of chemical fertilizers and pesticides, mismanagement of plastic mulch, and poor livestock waste management have caused significant land, water, and air pollution. Unsustainable production practices have contributed to large increases in greenhouse gas (GHG) emissions, potentially hindering China’s ability to live up to its international commitments in this area. Many long-term achievements in agriculture and poverty reduction would not have been possible without the support provided to farmers and rural areas by the Chinese government. Over the years, the government has made enormous investments in infrastructure and agricultural technology and has leveraged an array of policy instruments to catalyze agricultural production and improve rural residents' livelihoods and living standards. These efforts have not been static. Lessons from experience and factors within and beyond the sector have led to several major shifts in the underlying objectives, content, and means of delivery of public policies and investments. And this remains a dynamic process, reflecting wider changes in societal goals, public policies, and the changing roles of agriculture and rural areas in the overall economy. Looking to the future, China has put in place an ambitious vision and strategy for developing its agriculture and rural areas. The 19th Communist Party of China (CPC) National Congress Report (October 2017) set 93 out the vision or goals of the Rural Revitalization Strategy (RRS) as “to build rural areas with thriving businesses, pleasant living environments, good social etiquette and civility, effective governance, and prosperity.â€? The No. 1 Central Policy Document of 2021 sets out clear milestones of the RRS for 2022, 2035, and 2050 to develop modern agriculture and rural industry, develop green agriculture, provide rural infrastructure and public services, and strengthen the governance of rural areas (CPC Central Committee and State Council 2021). This paper focuses on the evolving instruments of public policy and patterns of public expenditures, both sector-wide and specifically related to the ‘greening of agriculture.’ It is based predominantly on the content and analytical insights put forth in three recently completed working papers.43 Readers interested in a more detailed empirical coverage and analysis of the key issues are encouraged to consult those papers. The balance of this paper is structured as follows. Section 2 briefly summarizes the major achievements in Chinese agriculture and rural development over recent decades. Section 3 summarizes the evolution of Chinese policy support for agriculture and rural livelihoods and draws attention to important institutional reform areas and public expenditure patterns. Section 4 zeroes in on policy measures and public spending related to sustainable and green agriculture and selected evidence regarding the efficacy of the emerging initiatives. The final section provides several recommendations. 4.2 Elements of China’s Agricultural Transformation Sustainable rural economic development and poverty reduction are rooted in agriculture, although agriculture tends to play a diminishing role over time. Rural households typically use multiple strategies to overcome poverty in developing countries, 44 and farming is crucial, especially in the early stages of economic development. In those early stages, agricultural growth was found to be two to three times more effective in reducing extreme poverty than equivalent levels of growth in manufacturing or most service sectors (Ivanic and Martin 2018). But, during economic structural change, the importance of quantitative shares of agriculture in employment, national GDP, economic growth, and poverty reduction all decline, in some cases quite sharply. As this occurs, other functions of agriculture, especially its contribution to ecosystem services and cultural values, may become relatively more important. A declining macroeconomic role for agriculture in a dynamic economy is not the same as a declining agriculture. For most developing countries, an effective process of agricultural transformation is fundamental to inclusive and sustainable growth. Agricultural transformation has been described as a process in which the sector evolves from being primarily farm-centered and subsistence-oriented to being increasingly market-oriented and integrated into other sectors of the economy (Timmer 1988). It typically involves major changes in what is produced, how it is produced, and how it is marketed. It is normally accompanied by major changes in demographics and employment patterns. 45 Agricultural transformation normally includes significant structural shifts —including in average farm sizes, land and water-use patterns, the mix of labor and machines in primary production and downstream activities, and the overall composition of agricultural output. Agricultural transformation normally also features the greater use of specialized inputs and knowledge, new forms of specialization, new uses for traditional commodities, and greater value addition. Other structural changes include the emergence and eventual dominance of coordinated value chains and ‘modern’ food retail formats. Agricultural transformation also involves a very large exit of people from agriculture (and a shift to part-time farming), 43 Rural Transformation and Policies in China (Huang 2021); Transforming Rural China: Analysis of Farmland Policy for Greening Agricultural Modernization (Jin and Gao 2021); Toward a Greener China: A Review of Recent Agricultural Support Policies and Public Expenditures (Chen and Zhang 2021) 44 The leading pathways are farming (for subsistence and for income), rural labor market participation, microenterprise revenue, and the migration of family members (and remittances), although in some countries these household strategies have been supplemented by social protection transfer payments from governments. Several pathways may operate simultaneously or be called upon to withstand periodic shocks affecting one or more livelihood sources (World Bank 2008). 45 There is a rich literature documenting the historical process of agricultural transformation in many countries. Three recent books provide very good overviews of the way the process has played out and a variety of pertinent policy issues in Latin America (Morris, Sebastian, Perego 2020), Africa (Resnick, Diao, and Tadesse 2020), and Asia (FAO 2021a) 94 along with large increases in employment in agribusiness, agricultural services, food logistics, and the food services industry. For most countries, the process of transformation takes many decades. Most low and lower-middle-income countries are still at relatively early phases of this process, while many upper-middle-income countries are in more advanced stages. The experiences of the latter countries have shown the complementary role of effective interventions within agriculture and of policies and programs which have promoted more dynamic growth in the nonfarm economy. Rapid growth in manufacturing and services creates additional demand for food and agricultural raw materials and greatly influences labor markets. The pace and patterns of agricultural transformation often differ within countries because of differences in agroecological conditions, proximity to population and industrial centers, the effectiveness of subnational government agencies, and other factors. At any point in time, it is thus common to see both more ‘progressive’ as well as ‘lagging’ regions—especially within large countries—on the pathway of agricultural transformation. The above generic description applies in large part to China’s experience as well. Huang ( 2021) describes four main stages in the country’s process of agricultural transformation as follows: 46 • Stage I (pre-1980): Agriculture was dominated by the grain sector to meet the basic and necessary demand for food grain. Most labor and land were used in grain production during this stage, and most public support is focused on this. Grain production accounted for nearly 90 percent of cultivated land in 1950; 30 years later, in 1980, the share of grain sown area in total crop sown area still exceeded 80 percent (NBS 2010). • Stage II (circa 1980s): During this stage, agricultural diversification began. The production and commercialization of labor-intensive and high-value cash crops, livestock, and fishery grew rapidly. Rising grain production and increased agricultural productivity enabled farmers to allocate more land and labor to high-value commodities, significantly raising farmers’ income. For the nation, the share of higher-value agricultural commodities and industrial raw materials increased during this stage from 45 percent in 1980 to 56 percent in 1990. • Stage III (1990s/2000s): During this stage, agricultural specialization was enhanced, the share of high-value agricultural commodities continued to rise, and rural labor’s nonfarm employment grew rapidly. China entered this stage in the early 1990s. In this stage, agricultural mechanization and urbanization significantly facilitated rural transformation (Wang et al. 2016). Rural labor increasingly shifted from farm to nonfarm employment. The share of high-value agricultural commodities rose to 75 percent in 2000 and fluctuated near 75 percent from 2000 to 2010. The share of rural labor’s nonfarm employment steadily increased from 21 percent in 1990 to 32 percent in 2000 and 48 percent by 2010. • Stage IV (2010s): High-value and sustainable agriculture and integrated urban-rural development became major features of rural transformation in this last stage. During this stage, while high-value agriculture continued to rise, the most significant changes occurred in the move to the more sustainable development of agriculture. China pursued a nationwide urban-rural integrating development strategy and, in response to the challenges of natural resources and environmental degradation, sustainable agriculture became a rural development goal. Patterns of land consolidation emerged or accelerated in some regions. Patterns of agricultural growth reflect this shift from a grain-first strategy and resource concentration to a more diversified pattern. During the past four decades, the agricultural output value in real terms has grown at an average annual rate of 5.3 percent (Table 4.1). Over this period, annual growth in grain production was 2 percent, about double that of the population, yet the average annual growth rates for cotton, sugar-bearing crops, edible oil crops, and fruit were 4.0 percent, 5.2 percent, 6.1 percent, and 11.1 46 Huang (2021) refers to these changes as ‘rural transformation’. His analysis focuses on changes within agriculture and in the role played by nonfarm employment. A fuller treatment of rural transformation would probably also include attention to rural industrialization, infrastructure development, and an array of services. 95 percent, respectively. Livestock and aquaculture production have been growing even faster than in the crop sector. The production of meat rose by an annual average of 5.7 percent, fish by 7.0 percent, and dairy by 8.6 percent. Overall economic growth, urbanization, and market development have changed Chinese food consumption levels and composition, thus further driving changes in the structure and composition of agricultural production. Within crops, the area under nongrain cash crops increased from less than 20 percent in 1978 to nearly 30 percent in 2018. Over the same period, the share of the noncrop sector (mainly livestock and fishery) in total agricultural output values grew from 20 percent to 46 percent (NBS 2010, 2020). Table 4.1: Average Annual Growth (%) of Agriculture in China, 1952‒2018 Pre-reform Time Period 1952‒ 1978‒1984 1984‒2000 2000‒05 2005‒10 2010‒15 2016‒18 Average 1978 Agriculture GDP 2.2 6.9 3.8 3.9 4.5 4.1 3.6 4.5 Agriculture gross output value 3.4 5.9 5.9 5.3 4.8 4.3 3.7 5.3 Grain (cereal + tubers + 2.5 5.5 0.9 1.0 2.5 2.4 −0.1 2.0 soybeans) Cotton 4.0 17.9 −0.6 6.4 2.0 −0.1 1.4 4.0 Edible oil crops 1.4 17.6 6.4 0.9 1.5 2.3 0.4 6.1 Sugar crops 7.8 13.6 3.7 4.8 5.3 0.7 2.1 5.2 Fruits 4.0 8.5 12.5 26.2 5.8 5.9 1.6 11.1 Vegetables 4.6 8.3 3.1 1.5 2.7 1.4 5.1 Meat 7.8 9.1 2.9 2.7 1.8 −0.5 5.7 Pork + beef + mutton 4.4 11.4 7.5 2.9 2.4 1.8 −0.9 5.6 Poultry 14.9 2.9 4.2 2.0 0.9 8.3 Dairy 8.2 25.6 5.7 0.6 −1.1 8.6 Fishery 4.7 4.2 12.1 3.6 4.0 4.6 1.3 7.0 Sources: World Bank estimates based on data from the NBS (various years), various issues of the National Statistical Yearbook (2000–19), and China Compendium of Statistics 1949‒2008 (NBS 2010) Note: Except for vegetables, the growth rates of individual and groups of commodities are based on production data; agricultural GDP and agricultural gross value refer to values in real terms. Meat production data since 1979 are available; poultry production data since 1985 are available. Vegetables are measured in sown area; data since 1979 are available. The pace and level of structural shifts in agricultural production have varied across China. This is illustrated in Figure 4.1Error! Reference source not found.. Following Huang (2021), high-value agriculture (HVA) is defined here to comprise industrial crops, horticulture, livestock, and aquaculture production. All provinces have experienced a growing importance of HVA, and by 2018 the share of HVA exceeded 85 percent in two-thirds of the provinces. Some provinces lagged behind the overall trend. For example, in 1978, the share of HVA reached 64 percent in Guangdong, yet it was only 31 percent in Ningxia. By 2018, the share of HVA exceeded 85 percent in Ningxia, which was only 9 percent less than that in Guangdong (94 percent). While difficult to discern from the figure, the pace of change tends to slow at higher levels of transformation (that is, once the share of HVA exceeds 80 percent). This is not surprising as all provincial governors still maintain responsibility for grain security in their provinces. Greater variation is observed among provinces in terms of the rising importance of nonfarm employment in rural household incomes. On average, nationally, about 7 percent of rural labor worked in nonfarm sectors in 1978, yet by 2018 this proportion reached 51 percent. Rural households in the economically most developed provinces (for example, Zhejiang, Jiangsu, Guangdong, and Fujian) have much more nonfarm employment than those in the less developed regions (Figure 4.2). The timing of the labor allocation shift has also differed. Nonfarm employment levels varied little in 1978 yet grew very fast in Eastern China over the subsequent two decades. For example, during 1978‒98, the shares in Jiangsu and 96 Guangdong rose from 8 percent to 44 percent and from 6 percent to 43 percent, respectively. Very significant increases in rural labor nonfarm employment occurred later in most central and western provinces. Figure 4.1: Shares of High-Value Agriculture (HVA) by Province, Selected Years 100 1978 1988 1998 2008 2018 90 Share of high-value agriculture (%) 80 70 60 50 40 30 20 10 0 Sources: Province-level NBS, various years Figure 4.2: Shares of Rural Labor in Nonfarm Employment by Province, Selected Years 100 90 1978 1988 1998 2008 2018 Share of rural labor employment 80 70 in nonfarm (%) 60 50 40 30 20 10 0 Sources: Province-level NBS, various years Trends in rural income and the pace of progress in rural poverty reduction have also varied across China. All provinces have experienced a significant increase in rural income, although the extent of this increase has differed (Figure 4.3). The provinces in Eastern China have experienced higher incomes than those in Central and Western China. For example, for the level of rural income in 2018, the top five provinces were all from Eastern China, and the bottom seven were all from Western China. Between 1978 and 2018, rural incomes in several provinces in eastern coastal China were 22 to 25 times their level in 1978. In contrast, many provinces in Western China have seen income gains of some 10 to 13 times. The country's most significant gains have occurred during the past decade. 97 Figure 4.3: Per Capita Income in Rural Areas by Province, Selected Years 30000 1978 1988 1998 2008 2018 25000 Per capita rural income (CNY) 20000 15000 10000 5000 0 Sources: Province-level NBS, various years The fall in rural poverty is the most successful story of China’s rural transformation and the national poverty alleviation plan. Again, larger and more rapid progress was achieved in Eastern China, with most of Western China lagging and the central region being in between. China’s rural poverty line has been adjusted several times. The progress is summarized in two graphs in Figure 4.4, one highlighting the experience during the 1980s and 1990s and the other looking at advances during the most recent decade. Based on its poverty line, China eliminated rural poverty in 2020, although several provinces still had some heavy lifting to do in recent years. Although many factors have contributed to agricultural growth in the past few decades, technological change has been one of the major sources of agricultural production and productivity growth in the past. In contrast to many other developing countries where technologies have been imported from the rest of the world, China has generated most of the technologies used by its farmers. Compared with Organisation for Economic Co-operation and Development (OECD) countries, China’s agricultural research and development (R&D) expenditure intensity (the percentage of agricultural R&D in agricultural GDP) is comparatively low (1.23 percent in 2013), but expenditures have recently increased significantly. 47 A summary is provided here on technological advances related to rice, wheat, cotton, vegetables, and pig production, plus a brief reference to advances related to selected agricultural inputs. 47 Although the private sector is much smaller, its growth rate for R&D expenditures has been high in the past decade and it has started to play an increasingly important role in agricultural technology innovations. Chai et al. (2019) estimated that both public and private food and agricultural R&D expenditures on a purchasing power parity basis in China have exceeded those in the United States in recent years. 98 Figure 4.4: Rural Poverty Incidence by Province in China, Selected Periods Panel A. Rural poverty incidence at 1978 standard, 1978 ‒99 Panel B. Rural poverty incidence at 2010 standard, 2011‒18 Sources: Province-level NBS, various years 99 4.2.1 Rice Rice is the most important food crop in China. China is also the largest rice producer globally, with rice production reaching 210 million tons (measured in paddy) in 2019 (NBS 2020). Yield increase has been the central goal of rice research and technology policy. China developed and extended the first fertilizer- responsive, semi-dwarf rice varieties in the early 1960s before the rest of the developing world had been introduced to the Green Revolution technologies. China’s rice breeders subsequently turned their attention to developing rice hybrids, which have a 15‒20 percent potential yield advantage over other modern high- yielding varieties. The release of the new rice hybrids and the substantial increase in seed production resulted in the area under hybrid rice expanding from 4.3 million hectares (ha) in 1978 to 15.9 million ha by 1990, accounting for 41 percent of the rice-sown area (Yuan 2004; Huang and Rozelle 1996). To further enhance the yield potential of Chinese rice, a “super riceâ€? breeding program was started in the mid-1990s. Over the past 20 years, significant progress has been made in breeding super hybrid rice with an additional 10 percent increase in yield (Yuan et al. 2017). Meanwhile, in response to the demand for high-quality rice, quality enhancement breeding effects have been incorporated into the super rice programs since the mid- 2010s. By the late 2010s, nearly 100 cultivars had been approved as super hybrid rice by the Ministry of Agriculture. 4.2.2 Wheat China has the world’s second-largest wheat area after India and is the world’s top wheat producer. In 2016‒ 2017, China’s harvested wheat area (24 million ha) accounted for about 11 percent of the global wheat area, but China produced more than 17 percent (or 130 million metric tons) of global wheat production. The national average wheat yield reached 5.63 tons per hectare (tons/ha) in 2019, well above the global average (3.5 tons/ha). Expanded wheat production has come mainly from yield growth. Although modern technology's progress in raising wheat productivity is like that for rice, the wheat yield has increased faster than rice yield partially because of shifting wheat production from less to more favorable areas and expanding irrigation for wheat production. Chinese wheat breeders developed semi-dwarf varieties after the nationwide selection of high-yield varieties planted by farmers in the 1950s and 1960s. By 1977, farmers were growing semi-dwarf wheat in about 40 percent of China’s wheat area; by 1984, this number rose to 70 percent (Rozelle and Huang 2000), and from the 1990s, it would have been difficult to find anything other than improved semi-dwarf varieties in China. The selection and breeding program with resistance to diseases and salinity tolerance started in the 1950s and was enhanced after 1980, effectively diminishing yield losses caused by diseases and salinity. In the past two decades, China's wheat-breeding target has also started to raise wheat quality in response to the demand change. The development and adoption of varieties with higher quality and/or special uses have largely replaced imported quality wheat with domestically-produced wheat since the early 2000s. 4.2.3 Cotton China's scientists began researching genetically modified (GM) cotton in response to rising pesticide use and the emergence of a pesticide-resistant bollworm population in the late 1980s. Starting with a gene isolated from the bacterium Bacillus thuringiensis (Bt), China’s scientists modified the cotton plant using an artificially synthesized gene identified with sequencing techniques. Field trial testing began in the early 1990s. With the area sown to cotton decreasing due to pest losses in the mid-1990s, in 1997, the commercial use of GM cotton was approved. During that same year, Bt cotton varieties from publicly funded research institutes and a Monsanto joint venture became available to farmers (Huang et al. 2002). The release of Bt cotton began China’s first large -scale commercial experience with a product of the na tion’s biotechnology research program. Now, Bt cotton accounts for more than 85 percent of the total cotton area in China. Empirical studies show that the impacts of Bt cotton have been impressive in terms of increased yields, reductions in labor and pesticide use, and improved overall farm economics. 100 4.2.4 Vegetables The rising demand for vegetables has resulted in the expansion of open-field vegetable production and the rapid development of greenhouse technology for millions of small farmers in China, particularly in Northern China. Most of the greenhouses that have been developed are simpler and more cost-effective. These were initially developed by farmers and made of a simple bamboo frame with a clay wall, plastic- sheet roof, and a straw mat rollout awning for cold nights in Shandong Province in the early 1980s (Wang et al. 2013). The greenhouse is built with an orientation to maximize sunlight capture and warm the interior. This has extended growing periods, leading to increased land productivity. The vegetable greenhouse area in China reached 981,000 ha in 2016 (NBS 2017). 4.2.5 Pig China has the most indigenous pig breeds in the world, and it has an advantage in breeding various pigs for commercialization in different regions across the country. Meanwhile, China has successfully introduced foreign pigs and used the exotic genetic resources of pigs in stock breeding. Artificial insemination has been expanded continually and has covered more than 85 percent in recent years, with its success rate ranging from 85 percent to 95 percent. The discovery of various molecular genetic markers and the rapid development of modern breeding programs have provided new approaches and methods for improving animal genetics and breeding (Yang and Jiang 2018). The precise management of nutritious feeding improves the health of pigs; this can benefit breeding quality and lower the risk of epidemic diseases (Xu 2018). Because geographic and production conditions differ across the regions of China, national standards for pig feed have been established to provide technical advice to pig farmers since 2004. The energy feed for pigs usually includes maize and wheat bran, and increases in productivity have been multifaceted (that is, improved feed conversion, reduced fattening times, and increased carcass weight). Major advances have also occurred in relation to important agricultural input technologies. For example, water-saving technologies, including sprinklers, micro-irrigation, low-pressure pipe irrigation, and canal lining, have become increasingly common. Such technologies were employed in just over one-quarter of China’s irrigated area in 2000, but by 2016, the coverage was 45 percent. Technological advances have also occurred with fertilizers, including the more common use of compound fertilizer (promoting more balanced use) and the commercialization of slow-release fertilizers (improving nutrient uptake by the crops). Major parts of Chinese agriculture have become increasingly mechanized over time, despite the small average farm size. The increased availability of small machinery and tools and the widespread development of commercial mechanization services have enabled this. 4.3 Policy, Institutional, and Public Expenditure Reforms In pursuit of national objectives related to food security, social stability, poverty reduction, and economic growth, the Chinese government has played a major role in guiding and propelling the development of the country’s agricultural sector. In doing so, it has employed a wide set of instruments, including major investments in infrastructure, agricultural research, and other public goods, and a host of interventions that have impacted the welfare incentives faced by farmers, agro-enterprises, and the general population. Not all these measures have had the intended impacts, been sustainable, or avoided unintended consequences. As a result, Chinese government interventions in agriculture and rural development have undergone frequent and substantial reform. Huang (2021) describes the reform processes as akin to Deng Xiaoping’s reform strategy, the so-called “crossing the river by feeling for the stones.â€? That is, a series of reform processes based upon piloting, learning, and adjusting along the way. China’s agricultural (and rural development) policy reforms are a complex subject on which many books have been written. In the short space available here, we highlight some of the most significant shifts that provide the context for the country’s relatively recent embrace of a “green agricultureâ€? agenda. Selected reforms or trends are highlighted with respect to agricultural policies, institutions, and public spending. 101 4.3.1 Policy Reforms Since the start of China’s agricultural transformation process, the most significant policy reforms have been those related to commodity prices and markets, agricultural trade, and the fiscal position of the sector. 4.3.1.1 Price and Marketing Reform Because there was no real market in the pre-reform era, price and market reforms were considered key components of China’s strategy to shift from a planned to a market -oriented economy. Price and market reforms started in the late 1970s by raising government procurement prices. After the early 1980s, when a shift was implemented to make individual households (rather than collective units) responsible for agricultural production, price and market reforms were introduced for different agricultural commodities. Reforms began with the less important commodities and went on to the strategically important ones. And, for each commodity, reforms were implemented gradually. Starting with the easier commodities provided an opportunity to learn from experience before moving on to more challenging reforms. For example, before the mid-1980s, the first and only products to have been liberalized were vegetables and fruits. After the mid-1980s, price and market reforms gradually moved to animal products (for example, fish and meat) and were finally, in the 1990s, implemented for sugar crops, edible oil crops, cotton, and grain—the commodities considered strategically important by China’s government. Over time, China’s commodity markets became increasingly competitive and integrated across regions. Yet, due to sustained concerns about farmer income and food security, China undertook a renewed price policy support program. The most important policy measures were minimum procurement prices implemented for rice in 2004 and for wheat in 2006 and a temporary storage program (TSP) which started in 2008 for maize, soybean, and rapeseed. The minimum prices for rice and wheat and the (government’s) procurement prices for the other crops under the TSP increased gradually until 2014. With concerns about farmers’ income in cotton and sugarcane production regions, the T SP was further extended to these crops in 2011 and 2012, respectively. Although the price intervention policies increased farmers’ income, they also generated a large price gap between the domestic and international markets. While domestic prices were very close to international prices at the time of the global food crisis in 2007–08, by 2015, domestic prices for maize, rice, wheat, and cotton were some 30–50 percent higher than international prices. These market distortions had considerable consequences. For example, high and rising domestic maize, sugar, and cotton prices adversely impacted downstream industries such as the feed and livestock sector, the food processing industry, and the textile and garment industries. The TSP for some commodities, especially maize, resulted in the build-up of huge stockpiles, leading to a financial burden on the government. While Chinese agriculture underwent diversification during this period, the staple commodity price interventions might have delayed some shifts toward more efficient land and labor uses. From 2016 onwards, measures have been taken to reduce the market distortions and financial burdens associated with price support and government procurement. For most commodities, the gap between domestic and international prices has been sharply reduced. For soybean and cotton, interventions have shifted from market price support to direct (income support) payments to farmers whenever market prices have fallen below the target. This proved beneficial both for farmers and for the downstream industries. In the case of maize, the TSP has been phased out, with a fixed amount of income support provided to growers in four major producing provinces. Although the minimum purchase prices for wheat and rice remained, support prices were gradually reduced between 2015 and 2019. 4.3.1.2 Agricultural Trade Reform China has adopted a step-by-step reform process to liberalize agricultural trade. In the first half of the 1980s, China established more than 2,200 foreign trade corporations to provide more incentives for trade. Companies participating in exports benefited from policies allowing export tax rebates and allowing companies higher rates of retention of foreign exchange that could either be used for imports or sold in the government-managed foreign exchange market—a policy that remained effective until the unification of 102 the exchange rate in 1994. In contrast to many other developing countries, China aggressively and unilaterally decreased its import tariff during an initial reform p eriod. China’s average agricultural tariff was as high as 42 percent in 1992, but these were lowered to 21 percent by 2001, just before China joined the World Trade Organization (WTO). By 1998, products subject to quotas, licensing, and other import control measures accounted for only 5 percent of total import tariff lines, and most were applied to strategically important products such as grain, cotton, edible oils, and sugar. China made substantial commitments to join the WTO in 2001 and significantly changed its trade institutions and policies during the 2001–2005 period. In its most basic terms, the WTO commitments in the agricultural sector can be classified into three major categories: market access, domestic support, and export subsidies. The commitments on market access have lowered tariffs for all agricultural products, increased access to China’s markets by foreign producers of some commodities through tariff rate quotas (TRQs), and removed quantitative restrictions on others. In return, China has gained better access to foreign markets for its agricultural products. Several other changes occurred within a few years after accession to the WTO. For example, since 2003, state trading monopolies have also been phased out for wool and have gradually disappeared or been decreased for most other agricultural products. Since the early 2000s, China’s food imports have grown significantly and much faster than its exports, leading China to become a major net importer of food, both for major feed/grain commodities and higher-value foods. 4.3.1.3 Changing Fiscal Stance Vis-à-Vis Agriculture Concerns about farmers’ income led the Chinese government to shift its fiscal stance vis -à-vis the agricultural sector. The first set of measures involved abolishing all agricultural taxes and fees in 2004. These taxes included grain tax and special agricultural taxes on nongrain commodities. Fees involved those collected by village committees and township governments to partially support the provision of local public goods/services and sometimes also for administration and management. In 2000, the total taxes on agricultural commodities, including grain and nongrain commodities, reached CNY 43 billion (equal to about USD 5.2 billion), and the fees collected from agriculture amounted to CNY 16.3 billion (about USD 1.97 billion). Together, these two accounted for 4.4 percent of the government’s fiscal revenue that year. Agricultural taxes and fees were then eliminated between 2004 and 2006 in all provinces. Parallel to this removal of taxes was the launch of several direct subsidy programs for farmers. These subsidies started with the “direct grain subsidyâ€? and the “quality seed subsidyâ€? in 2004. When domestic chemical fertilizer and fuel prices rose with international prices in 2005‒06, a new aggregate subsidy program named the “agricultural input aggregate subsidyâ€? was started in 2006. Almost all farmers received subsidies. The total amount of the three major subsidies peaked at CNY 162.2 billion (at 2018 prices) in 2012 (Figure 4.5). While not shown in Figure 4.5, China also started an agricultural machinery subsidy in 2006. 48 Other, more recently introduced, subsidies to farmers include those for agricultural insurance, credit, land consolidation, and soil conservation and improvement. In 2016, direct subsidies to farmers on agricultural insurance, soil conservation, and grassland ecology protection reached CNY 15.8 billion, CNY 0.8 billion, and CNY 19 billion, respectively. 48 After starting the machinery subsidy program in 2004, the subsidy budget from the central government increased rapidly and reached its peak (CNY 23.75 billion) in 2014. When an application for subsidized machinery is approved by the county government, a farmer can receive the amount of subsidy equal to about one-third of the machinery price. Recently, the central government has allowed local government to shift part of the agricultural machinery subsidy to water-saving irrigation equipment. 103 Figure 4.5: Major Agricultural Subsidies in 2004–18 (billion CNY in 2018 prices) While very sizable in their aggregate, the impact of these subsidy programs on the incomes of China’s more than 200 million farm households (or rural households with land contracts) has been quite modest. In recent years, the average household has received only about CNY 850 per annum (approximately USD 130), representing a very small percentage of the total incomes of most households. And the impact of agricultural subsidies on agricultural production has also been very modest. Using household data from a nationally-representative survey, Huang et al. (2011) showed that subsidies were mostly being given to the land contractor, not the tiller, because of the difficulty in identifying actual crop production and input use by a household. Yet, because the subsidies are not linked to actual production, they have not distorted production in the way that earlier price supports did. The size of these core subsidy programs has either leveled off or been reduced in recent years. Yet, a broad range of other subsidy programs has been introduced. Some relate to biosecurity measures, including subsidies for animal disease immunization and the culling (and replacement) of animals amid zoonotic pandemics (for example, for African swine fever). Other subsidies have been introduced to foster the multifunctionality of rural areas (that is, agricultural and rural tourism); promote agricultural start-ups and service supply companies; or support larger-scale production systems. In addition, a broad set of subsidies have been introduced to incentivize the adoption of sustainable agricultural practices. The latter will be discussed later in the paper. In addition to these more targeted subsidy programs, the government allocated considerable resources to poverty alleviation in selected counties during the 2016 –20 period. Many of those interventions had a considerable focus on agriculture-related livelihoods and upgrades of rural infrastructure. 4.3.2 Institutional Reforms Institutional reforms have proven to be important for improving the incentives faced by China’s farmers and their own resource allocation decision-making. Here, we draw attention to reforms pertaining to land tenure security and irrigation management, although evolving reforms in other areas (for example, agricultural extension, animal health services, agricultural mechanization services, agricultural cooperatives, and agricultural financial services) have also been important. 4.3.2.1 Land Tenure Security Before the communist revolution, most of China’s farmers were poor tenants cultivating small plots under strict tenancy arrangements. With the founding of the People’s Republic of China in 1949, the government confiscated landlords’ holdings and redistributed land to farmers on an egalitarian basis. However, a policy 104 of collectivization in the 1950s led to a decline in agricultural production and contributed to the great famine of 1958‒1960. To increase agricultural production, the 1978 household responsibility system (HRS) was adopted to decollectivize agricultural production and make farmers residual claimants to farming decisions and agricultural production. Farmers were given 15-year private use rights to their land, although these contracts remained verbal and were rarely protected against administrative land reallocation. In practice, land reallocations frequently occur in some villages, either to promote equity or for other reasons (Li, Rozelle, and Brandt 1998). By the 1990s, rural land tenure insecurity was increasingly seen as an obstacle to agricultural performance, migration, and overall economic transformation. In response, the 1998 Land Management Law was enacted to require that all farmers receive written 30-year land-use contracts and that the scope for government reallocation of land readjustments be circumscribed. Subsequently, the Rural Land Contracting Law (RLCL) was adopted in 2003 to grant farmers 30-year use rights through written land-use rights contracting. Under the RLCL, written contracts and certificates are required to confirm the contracting relationship between collectives and farmers, and, for the first time, the law specified the right of farmers to carry out various transactions regarding the contracted land (for example, the right to rent, assign, and exchange) (Wang, Riedinger, and Jin 2015; Zhu et al. 2006). Despite these provisions, the law's implementation varied across regions, and tenure insecurity persisted.49 To further strengthen tenure security, ease free transferability, and facilitate broader economic transformation, the Chinese central government started several pilot land titling and certification projects via Document No. 1 of the CPC Central Committee in 2008. The government initially selected eight villages as the pilot villages, but by 2011 some 12,150 villages in 50 counties were included. The government subsequently announced its plan to extend the titling and certification program to the entire country, a process that has now been completed. In the meantime, a new rural land law (known as “three rights separationâ€?) was enacted to separate ownership, contract, and use rights. This aimed to promote land transfer and large-scale farming and, for the first time, allowed farmers to use rural land management rights as collateral to borrow money from financial institutions. After a few years of heated debates and pilots of the concept of “three rights separation,â€? the Chinese government turned this concept into the RLCL in December 2018. With the introduction of “three rights separation,â€? rural farmland's security, transferability, and collaterality were further strengthened. This is very important as, over the past decade, a vibrant land rental market has emerged, especially in northern and northeastern China (Gao, Huang, and Rozelle 2012). Huang and Ding (2016) draw attention to another institutional innovation, the development of land transfer service centers at the local government level, reducing the transaction costs associated with land rental agreements. However, consolidation still has a long way to go despite increasing land transfers and gradually enlarging farm sizes. 4.3.2.2 Irrigation Management Irrigation has played a significant role in raising agricultural productivity, although increased water scarcity has raised concerns about the sustainability of many irrigation systems. China has developed comprehensive institutions to manage its water resources. These include a system of unified management at the national and local levels. The Ministry of Water Resources (MWR) administers water resources throughout the country, and its counterparts at the provincial, prefectural, and county levels are responsible for water management within their jurisdictions. Locally, the management of irrigation depends largely on whether farmers use surface water or groundwater. Where surface water is used, local water resource bureaus manage an irrigation district (ID). Their major tasks involve transferring water from major rivers or reservoirs to the upper ID, channeling it down, and managing the ID’s main and branch canals. Tertiary or lower canals are administered by county and township governments. Village committees run the village canal networks. Local water resource 49 Based on household survey data from five major Chinese agricultural provinces in 2008, Wang, Riedinger, and Jin (2015) found that big land reallocations were still practiced in some villages and one-fifth of rural households did not hold either land certificates or land contracts in 2008. 105 bureaus and village committees managed the wells and irrigation in areas that used groundwater before the rural reform. Since the early 1980s, responsibility has moved to individual households . The HRS had effects on groundwater irrigation, hitherto managed by the village. After the HRS, individual farmers made their own decisions on agricultural production. Ownership of tube wells on contracted land shifted from villages to households. This resulted in a profound transformation. To raise productivity, farmers started investing in tube wells in their fields. The share of private (as opposed to collective) tube wells increased from only 7 percent in 1983 to 83 percent in 2004 (Wang et al. 2019). This privatization helped farmers access local water based on their own demand, affecting both production and groundwater use. A growing groundwater market also gave non-owners access to tube well supply (Zhang et al. 2008). The percentage of villages on the North China Plain with an active groundwater market increased from 5 percent in 1990 to 80 percent in 2016.50 Institutional changes in surface water irrigation began in the early 1990s when budget constraints diminished local governments’ ability to invest in a nd maintain IDs. To keep IDs functioning, the central government allowed them to commercialize irrigation services. However, commercialization was not successful. Managing IDs locally became a problem in many areas. Knowing the importance of irrigation for production, China significantly increased its investment from the mid-1990s. At the same time, the government also tried to reform local irrigation management. The reform was introduced by the World Bank in the mid-1990s and then quickly expanded to many parts of the country. Its major component was the creation of water user associations (WUAs), which took over irrigation management from the village collectives. From 2001 to 2016, the number of WUAs increased from 1,000 to more than 80,000. Several studies have analyzed how WUAs can decrease water use (Wang et al. 2005, 2014). The results show that incentivizing WUA managers is an important factor that can facilitate WUAs in saving water. 51 China has tried to raise fees to improve the efficiency of water use and decrease the financial deficit in irrigation. Farmers were first required to pay a fee in 1985 when the aim was to decrease the irrigation system’s burden on the state. In 1992, Price Bureaus took over fee administration from the water resource bureaus. Payment changed from a single sum to two components: a basic fee charged by area and a volumetric fee based on use. In 2016, the government changed fees to water resource taxes for surface water irrigation in several provinces. In the case of groundwater, farmers pay only for electricity, diesel, and other operational costs of pumping water. There have been government plans to charge groundwater resource fees, but the high collection costs have so far discouraged implementation. Various regions have also used other innovative water charging methods in the past two decades. For example, pilot projects in Northern China have used integrated circuit cards to regulate individual farmers’ pumping rates. But implementing such projects requires significant initial investment and then a budget for maintenance and monitoring. 4.3.3 Changing Patterns of Agriculture-Related Public Expenditures Total public expenditures on agriculture, forestry, and water conservancy (AFW) have increased over time, and their growth rate has exceeded that of national total public expenditures. The expenditures on AFW extend well beyond conventional agricultural programs to also include items related to south-to-north water diversion, poverty alleviation, comprehensive rural reform, and inclusive financial development. Based on 2010 comparable prices, the total expenditures on AFW increased from CNY 466.1 billion in 2008 50 Despite the positive income effects of tube well privatization, concern remains about the sustainability of groundwater use. Wan g et al. (2009) found that privatization had accelerated declines in the groundwater table in Northern China. To overcome the problem, the government has tried to regulate withdrawals via quotas and fees. In 2014, a pilot project for comprehensive control began in Hebei, one of the provinces worst affected by falling groundwater levels. The main goal is to control the total amount of groundwater withdrawn in the region. By 2018, this initiative had been extended to other provinces in Northern China. 51 China’s government has been trying to set up a water rights system and allocate water through market mechanisms since the ear ly 2000s (Calow, Howarth, and Wang 2009). The first set of important institutions to establish water rights and transfer systems was established in 2005. Local governments initiated several transfer systems for industrial and domestic water. In 2014, formal pilot projects to gain experience with setting water rights and transfers started in Ningxia, Jiangxi, Hubei, Inner Mongolia, Henan, Gansu, and Guangdong. In 2016, the first national Water Rights Transaction Institute opened in Beijing. So far, transferring water rights for irrigation has been more challenging than for industrial and domestic uses. 106 to CNY 1.83 trillion in 2019, with an average annual growth rate of 13.2 percent (Figure 4.6). The share of AFW expenditure in total government spending increased from 6.8 percent in 2007 to 9.7 percent in 2020. Figure 4.6: National Public Expenditures on Agriculture, Forestry, and Water Conservancy, 2008–19 2000 Other expenses for agriculture, forestry and water affairs 1800 Target price subsidy 1600 Inclusive financial development expenditure 1400 Comprehe-nsive rural reform 1200 Billion CNY Comprehensive development of Agriculture 1000 Poverty alleviation 800 South-to-north water diversion 600 Water 400 Forestry 200 Agriculture 0 Agriculture, forestry and water 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 conservancy Sources: Final budget sheets (MOF various years) Dedicated spending on agriculture represented about half of the total in 2008 but less than one-third by 2019, as the biggest increases in spending have occurred for water resources and poverty alleviation. The expenditures on water conservancy include drinking water for rural households and livestock and expenditures on the development of water conservancy facilities and south-to-north water diversion, which are largely unrelated to agriculture. These expenditures constituted 17 –22 percent of the total expenditures on AFW. Poverty alleviation funds increased most rapidly, especially after the Political Bureau of the CPC Central Committee deliberated and approved the decision to win the battle against poverty in 2015. Poverty alleviation funds increased from CNY 32.9 billion in 2008 to CNY 106.9 billion in 2015, climbed to CNY 195.3 billion in 2016, and rose to CNY 445.1 billion by 2019. The share of poverty alleviation funds in total AFW expenditures increased from 7.0 percent in 2008 to 24.3 percent in 2019. On February 25, 2021, China announced it had completed the historic task of eliminating absolute poverty by December 2020. The largest component of poverty alleviation expenditures has been used to improve rural infrastructure, which accounted for just under one-third of the total poverty alleviation funds in 2019. Other poverty alleviation spending targeted agricultural production in very poor locations, social development and rural education programs, and programs providing low-interest loans. As analyzed in detail by Chen and Zhang (2021), the changing composition of AFW spending has been accompanied by other structural shifts. The bulk of spending now occurs at the local level, with most of the central government’s expenditures on AFW involving transfers to the local government. Central government spending on AFW now accounts for only 1.4 percent of total central government spending (down from 2.7 percent in 2007), while 11.1 percent of total local government spending is related to AFW (up from 8.1 percent in 2007). Transfer payments from the central government are used to equalize payments across regions plus re-enforce selected areas of national priorities. Reforms are ongoing, geared toward improving the fiscal system, clarifying the responsibilities of central and local governments, and improving performance evaluation. China’s public expenditures on agricultural production follow the typical dichotomy between direct support and general public services. Direct support for agricultural production includes subsidies for supporting grain, fishery and forestry production, stabilizing farmers' income, and building grain and 107 oilseed reserves. General financial support for agricultural public services includes science and technology and extension services, pest control, the quality and safety of agricultural products, disaster prevention and relief, irrigation and water conservancy, rural road construction, drinking water for rural households and livestock, rural infrastructure construction, comprehensive agricultural development and inclusive financial development expenditures, agricultural structure adjustment subsidies, and agricultural organizations and industrialization management. The total expenditures on agricultural production support increased from CNY 324.3 billion in 2010 to CNY 646.7 billion in 2019, with an average annual growth rate of 8.0 percent. The public expenditures for direct support for agricultural production began to decrease in recent years. In summary, public expenditures for direct support for agricultural production increased from CNY 117.2 billion in 2010 to CNY 359.1 billion in 2015, with an average annual growth rate of 25 percent. After the reform of 2015, expenditures on direct support for agricultural production began to decrease significantly, declining to CNY 277.1 billion in 2019 (Figure 4.7). Figure 4.7: Public Expenditures on Direct Support for Agricultural Production in China Grain and oil reserves 400 350 Oil price reform Billion CNY, 2010 constant prices subsidies for forestry 300 Oil price reform subsidies for fisheries 250 Grain Risk Fund * 200 Target price subsidy 150 Subsidies for keeping 100 rural income stable Subsidy for supporting 50 agricultural production Total 0 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Sources: Final budget sheets (MOF various years) Public expenditures on general public services for agriculture are decoupled from specific agricultural products and income support and include eight subcategories summarized in Figure 4.8. Most of the increase in spending this past decade has pertained to infrastructure development, including farmland water conservancy in poor areas, rural roads, and drinking water for people and livestock in rural areas. Because of the national poverty alleviation strategy, expenditures on rural infrastructure increased dramatically, from CNY 36 billion in 2015 to CNY 145 billion in 2019. Inclusive financial development was another area gaining much-increased expenditure. More than half of that spending has gone for agricultural insurance subsidies. The agricultural structural adjustment subsidy has been deployed to support shifts from grain to nongrain crops, restore farmland polluted by heavy metals, and support shifts in the organization of production, including involving cooperatives and leading enterprises. China has invested heavily in its agricultural research system. According to the 2018 China Statistical Yearbook on Science and Technology, in 2018, the number of agricultural research institutes amounted to 1,069, and 87,552 research staff worked in agriculture. Agricultural research institutes, agricultural universities, and some comprehensive research institutes and universities take part in agricultural research. Based on constant prices in 2010, China's agricultural R&D expenditures increased from CNY 2.73 billion in 2002 to CNY 21.43 billion in 2018, with an average annual growth rate of 12.9 percent, faster than national public expenditures. Specifically, in 2018 the R&D expenditures of agricultural research institutes and universities were CNY 15.9 billion and CNY 5.53 billion, respectively. The R&D expenditures of 108 agricultural universities and research institutes reached annual growth rates of 14.1 percent and 12.5 percent from 2002 to 2018, respectively.52 Figure 4.8: Public Expenditures on Agricultural General Public Services in China 450 Billion CNY, 2010 constant prices 400 350 300 250 200 150 100 50 0 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Agri S&T transformation and extension Services Pest control Quality and safety of Agri products Disaster prevention and disaster relief Agri resource protection and utilization Farmland water conservancy Rural road construction Rural drinking water Rural infrastructure construction Agri comprehensive development Inclusive finance development Subsidies for Agri structural adjustment Agri organization and industrialization management Sources: Final budget sheets (MOF various years) 4.4 Toward Sustainable and Green Agriculture The expansion and intensification of Chinese agriculture have had an enormous environmental footprint in terms of land and soil degradation, water and air pollution, water scarcity, biodiversity loss, high levels of GHG emissions, etc. For many producers and in many commodity landscapes, environmentally- degrading practices have generated short-term net economic benefits in terms of yields, costs, and income, with most of the negative consequences borne by others. Over an extended period, growth-oriented agricultural policies trumped environmental concerns, while consumer markets largely failed to reward more environmentally-friendly practices among Chinese producers. Hence, to a large degree, what has played out has been a combination of regulatory and market failure. Governments can play many roles in relation to agriculture and employ many instruments to protect the environment and induce the uptake and mainstreaming of more sustainable resource management and production practices. Scherr et al. (2015) distinguish four types of agro-environmental roles for government: definer, regulator, enabler, and funder. • Definer: Government sets goals, norms, and milestones for a pathway or vision of environmental performance in agriculture. This typically involves high-level political endorsement for agricultural green growth and specific sub-goals. 52 According to OECD statistics, by 2010, agricultural public research expenditures in China were roughly equivalent to those of developed countries, such as the United States, by purchasing power parity (PPP) estimation, much higher than those of developing countries, such as India and Brazil. In 2016, China's agricultural public research expenditures reached USD 7.7 billion by PPP estimation (2011) and accounted for about 16 percent of total global agricultural public research expenditures, higher than those of counterparts India (9%) and Brazil (6%) (Beintema, Nin-Pratt, and Stads 2020). 109 • Regulator: Government establishes and enforces the rules of the game for resource management and sustainable practices. Perverse incentives are reversed through coordinated and complementary regulatory efforts at national, provincial, and local scales. Regulations may act to ban, limit, require, and/or monitor the results of farmer practices. • Enabler: Government facilitates processes for voluntary action through a mix of information and incentives. For example, the government may actively support better production through R&D, agricultural extension, promotion of eco-standards, public procurement, and other means. • Funder: The government provides financing directly or indirectly for investments to reduce environmental impacts. This might include investments in infrastructure, producer subsidies to defray the costs of producer investments or transitions to improved practices, public payments to land managers for ecosystem services, etc. Over the past two decades, the Chinese government has played all such roles and employed a broad set of agro-environmental policy instruments. In defining the vision for green agriculture, the 2002 Agricultural Law of the People’s Republic of China defined ecological environmental preservation as one of the main objectives of China’s agricultural policy. More recent planning and guidance documents have elaborated on this vision and its specific applications. This includes the National Plan for Sustainable Agricultural Development (2015–30), the Action Plan for Zero Growth of Chemical Fertilizer Use by 2020 (MARA 2015), and the broadly framed Strategic Plan for Rural Revitalization (2018–22).53 Many regulatory reforms have occurred, both at the broad level (that is, the amended Environmental Protection Act of 2015 and the Environmental Protection Tax Law of 2018) and in relation to specific inputs or dimensions of agricultural production (that is, agro-chemicals, plastic mulch, forest land protection, etc.). Many programs have featured the government playing an enabling role, especially in developing and adopting alternative production and postharvest technologies. In recent years, there has been much- increased government funding for programs dedicated to improved natural resources management (NRM) and an array of subsidies geared toward inducing increased farmer adoption of sustainable practices. The discussion below focuses on a selected array of measures that have enabled or better incentivized farmers to adopt more sustainable practices and the broader patterns of the government’s evolving spending in relation to green agriculture and associated NRM. We first consider measures taken to achieve broad environmental improvements, typically at the landscape level, and subsequently consider measures more focused on reducing agricultural point and nonpoint pollution. 4.5 Toward Environmental Improvements at the Landscape Level China has an extended history of soil and land conservation projects that rely on agroforestry management. Examples of these include the state-level shelter forest systems that have been constructed in many regions in China since the 1970s, including northern ecological protection schemes, water source conservation of the Yangtze River, and the coastal-shelter forests for the middle and lower reaches of the Yangtze River. In the 1980s, the intercropping method of forest-rubber-tea was developed in Hainan Province and the south of Yunnan Province. The middle and lower reaches of the Yangtze River saw the development of pine trees and tea, Chinese tallow trees and tea, and paulownia and tea in the hilly region. Later, a more complex co- cultivation system, such as forest-fish-agriculture, was developed in the wetlands of the Lixia River area in Jiangsu Province. In the 1990s, contour hedgerow technology was developed in mountainous and hilly areas of Southwest China. Across many regions of China, other intercropping methods were also developed, such as forest-ginseng in Northeast China, fruit-grain in Northern China, and forest-crude medicinal plants 53 The government of China has paid increased attention to agricultural green development since the 13th FYP (2015 ‒20). The CPC Central Committee and the State Council have issued a series of guiding documents on ecological civilization construction and agricultural green development in recent years. The objective of agricultural green development in China is to accelerate agri- food transformation toward a resource-saving and environment-friendly development mode. 110 and forest-grass in various regions, resulting in an improved ecological environment and benefiting farmers’ income. More recent initiatives have included the following. • The Grain for Green (Returning Farmland to Forest) Project has encouraged farmers to convert fragile agricultural land into forests or pastures. This was first piloted in three provinces in 1999 and then extended nationally in 2002. The project has provided cash and in-kind subsidies to farmers to undertake the conversion and manage the costs of the newly-converted land. • The Green for Grain (Returning Farmland to Grassland) Project began in 2003 and provided farmers with feed subsidies. After 2011, animal feed subsidies were provided as a grant for grassland conservation. Subsequently, the Green for Grain (Returning Farmland to Forest and Grassland) officially became a conservation project, encouraging farmers to decrease grazing intensity by stopping grazing on the same grassland for seasonal intervals or consecutive years to restore ecological integrity and sustain the pastures. • The Natural Forest Conservation Project was piloted in 1998‒2000 and was officially launched in 2000. Subsequently, the Forest Ecological Benefit Compensation Fund System was established in 2004. The project aimed to improve fragile and unstable forest ecosystems, protect natural forest resources in Inner Mongolia and Northeast China, and rehabilitate natural forests by banning the exploitation of natural forests and diverting surplus workers. • A project focused on grassland ecological protection has been implemented since 2011. The objective has been to promote the transformation of the grassland animal husbandry development model and increase herdsmen's income while protecting the grassland's ecological environment. The policy objective was "two guarantees and one promotion," that is, "to guarantee the protection of grassland ecology, guarantee the supply of characteristic livestock products such as beef and mutton, and promote the income of herdsmen." The primary instruments used are subsidies, payments for environmental services, and advisory services. • A Cultivated Land Rotation and Fallow System Pilot Project was launched in 2016, targeting mainly areas with groundwater overuse, heavy metal pollution, rocky desertification, and ecologically severely degraded lands. The goal has been to repair the degraded ecological environment and improve productivity. Crop rotations (especially of maize-soybean and maize-potato) have been promoted in North and Northeast China, while land fallowing has been encouraged in areas with depleted groundwater aquifers and where soils have been polluted by heavy metals. By 2021, China had implemented crop rotation and fallowing on more than 6.67 million hectares of land. Annual expenditures on these programs, mostly in the form of direct subsidies or payments for environmental services, were substantial during the past decade, although the highest point was reached in 2015 (Figure 4.9). Expenditures on the Grain for Green Project have declined by nearly 10 percent per year from CNY 37.1 billion in 2010 to CNY 14.8 billion in 2019. Reflecting a partial shift in emphasis, expenditures on the Forest Ecological Benefit Compensation Fund, used for public forest development, management, and protection, increased from CNY 11.2 billion in 2010 to CNY 18.7 billion in 2019, with an average annual growth rate of 5.9 percent. 111 Figure 4.9: National Eco-Environmental Direct Subsidies in China, 2010–19 600 100 million CNY, constant price in 2010) 500 400 300 200 100 0 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Grain for Green Program Returning Grazing to Grassland Returning Farmland to Grassland Forest Ecosystem Compensation Fund Program Sources: Final budget sheets (MOF various years) Far more substantial than these direct subsidies have been expenditures supporting general public eco- environmental services (Figure 4.10). For these services, spending increased sharply from CNY 41.1 billion in 2010 to CNY 151.5 billion in 2019, with an average annual growth rate of 15.6 percent. Most of the subcategories of these expenditures displayed an increasing trend, except for the expenditures on wind erosion and desertification control. Most of the activity categories denoted in Figure 4.10 are self-explanatory, but there are a few exceptions. Public expenditures on natural ecological and environmental protection, including ecological protection, ecological restoration, rural environmental protection, and biosafety management, exhibited a significant growth from CNY 10.4 billion in 2010 to CNY 63.9 billion in 2019, with an average annual growth rate of 22.3 percent. Rural environmental protection refers to targeted agricultural and rural environmental protection and pollution control activities, including comprehensive rural environmental management (that is, domestic waste treatment, sewage treatment, and rural drinking water source monitoring and protection); environmental protection in small towns (that is, environmental protection capacity building and environmental infrastructure development, beautiful towns, and building of eco-villages); prevention of agricultural nonpoint source (NPS) pollution (that is, agrochemicals, manure and carcasses of livestock, and soil pollution); environmental monitoring and supervision of agricultural production areas; organic food production base construction and management, comprehensive use of agricultural wastes, and rural environmental protection capacity building. 112 Figure 4.10: Eco-Conservation Public Service Expenditures in China, 2010–19 1600 100 million CNY, constant price in 2010 1400 1200 1000 800 600 400 200 0 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Protection and utilization of agricultural resources Natural ecological and environmental protection Natural forests protection Forestry nature reserves Animal and plant protection Wetland conservation Forestry disaster prevention and mitigation Wind erosion and sandification control Sand prevention and control Soil and water conservation Water resources management and protection Sources: Final budget sheets (MOF various years) It is difficult to denote national-level indicators indicating impact in many areas of broad landscape protection or restoration. And the efficacy of some programs is likely to be strongly influenced by local conditions.54 Some impacts can be more readily illustrated at the provincial or localized level. The Hebei Province and its efforts to reduce groundwater overuse provide an example of this (Box 4.1). 4.5.1 Policies and Programs to Reduce Agricultural Pollution Many other initiatives have sought to contain or reduce different forms of agricultural pollution. Some of the most significant ones are briefly noted here. In 2017, the Ministry of Agriculture (now Ministry of Agriculture and Rural Affairs [MARA]) formulated the Action Plan for Agricultural Mulch Film Recycling, calling for a plastic mulch producer responsibility system of “who produces, who recycles.â€? The goal has been to promote the promulgation and implementation of new national standards for plastic film to ensure recyclability and substantially reduce leakage into river systems and water bodies. In 2020, the central government issued a policy to support 100 counties in Inner Mongolia, Gansu, and Xinjiang provinces to promote waste plastic film recycling. Going forward, China aims to promote the mechanization of plastic film collection and increase subsidies for plastic film recycling machines and tools. In addition, China plans to demonstrate and promote one-film multipurpose use, inter- row coverage, and other technologies that can help diminish agricultural plastic pollution. The livestock manure pollution control policy supports the collection, treatment, and recycling of animal wastes. In 2016, the Central Leading Group of Finance and Economics proposed accelerating the treatment and recycling of livestock and poultry farming waste. In 2020, it emphasized that the country would continue to support the counties that promote livestock and poultry manure use during the 13th Five-Year 54 Researchers are yet to reach a consensus on the impact of the grassland ecological compensation policy on grassland ecology. Some research results showed that the policy had a significant effect on the livestock-reduction behavior of herdsmen and promoted the sustainable development of grassland (Hu, Huang, and Hou 2019; Liu et al. 2019; Xie et al. 2018), while other researchers had an opposite point of view. They argued that the grassland ecological compensation policy had difficulty decreasing the number of livestock by relying solely on compensation funds, and the problem of overloading and overgrazing in pastoral areas was not fundamentally solved (Hu, Kong, and Jin 2016). 113 Plan (FYP) period. The central government allocated a total of CNY 29.6 billion to support 723 counties with projects to promote the use of livestock and poultry manure, with an emphasis on supporting the construction of treatment facilities and equipment. The project covers about 100,000 livestock and poultry farms, and the matching rate of livestock and poultry farms' manure treatment facilities and equipment exceeds 95 percent. The straw return to farmland policy is broadly advocated in China to decrease environmental pollution and increase soil fertility, thus improving soil carbon. Since 2011, the government has promoted the comprehensive use of crop straw as fertilizer, feed, energy, and raw material for other purposes. The government has been spending more than CNY 100 million to subsidize the comprehensive use of straw every year and support straw recycling and commercialization. In 2021, the Party Central Committee and the State Council required MARA to select 200 key counties for the comprehensive use of straw, with the comprehensive use rate reaching 86 percent. The purchase of machinery for returning straw to the field was also added to the list of subsidies allowed. The system for healthy aquaculture contributes to protecting and restoring aquaculture's ecological environment. Ten ministries and commissions issued Opinions on Accelerating Green Development of Aquaculture in 2019, advocating an ecologically healthy aquaculture system to strengthen the ecological service function of aquaculture. Environmental protection facilities and equipment were used on demonstration farms to purify water and for automation and self-inspection in key steps of aquaculture production, such as disease prevention and control and aquaculture wastewater treatment. The government provides financial support for aquaculture water treatment and other aspects. At present, 1,005 national healthy aquaculture demonstration farms have been built in China. In 2015, the Ministry of Agriculture promulgated the Action Plan for Zero Growth of Chemical Fertilizer Use by 2020. The plan aimed to control pollution by decreasing the amount used per unit crop area and increasing use efficiency. The action plan called for the coverage rate of soil testing and formulated fertilization technology to reach more than 90 percent, the nutrient return rate of livestock manure to reach 60 percent, the nutrient return rate of crop straw to reach 60 percent, mechanical fertilization to account for more than 40 percent of the planting area of main crops, and the application of integrated water and fertilizer application technology to reach 100 million ha. Numerous interventions have been undertaken to realize these targets. For example, individual counties received CNY 2 million annually from the central government to implement pilot programs to demonstrate and promote reduced fertilizer production systems. And, starting in 2017, a pilot program to incentivize farmers to adopt commercial organic fertilizer. Accompanying these pilot programs has been an accelerated national R&D program centered on technologies (including slow-release fertilizer) to improve fertilizer-use efficiency.55 Box 4.1: Hebei Province Tackles Groundwater Overexploitation One of the major challenges in Hebei is the overexploitation of groundwater. Hebei’s water resource is relatively low. The per capita water resource was only 218 cubic meters (m3) in 2018, far below the national average of 1,972 m3 (NBS and MEE 2019). For the past 30 years, 150 billion m3 of groundwater have been overextracted, with an overexploited area of 67,000 square kilometers (km2) in the province. It has become China's largest groundwater funnel area, leading to more frequent geological and environmental disasters, such as land subsidence, wetland shrinkage, seawater intrusion, and recharge (Ma 2017). In 2019, total agricultural water consumption in Hebei was 11.4 billion m3, accounting for 62.5 percent of its total water consumption (Department of Water Resources of Hebei Province 2020). Saving agricultural water use is critical to solving the problem of overexploitation of groundwater in Hebei. The province has therefore adopted several measures to address this problem since 2014. First, measures have been taken to improve groundwater governance. In 2014, the Hebei provincial government issued the Pilot Scheme for Comprehensive Treatment of Groundwater Overdraft in Hebei Province (2014) and launched the Comprehensive Treatment Plan for Groundwater Overdraft in Hebei Province (2014‒30). The central 55 Also in 2015, China announced a policy for zero growth of pesticide use. It proposed that, by 2020, the coverage rate of biological and physical control of diseases and insect pests of main crops should surpass 30 percent, the coverage rate of specialized control should surpass 40 percent, and the use rate of pesticide should surpass 40 percent. In 2020, MARA declared that 100 counties should be selected for the promotion of ecological and biological control of pests to pilot green development of agriculture and rural areas. 114 government invested CNY 16.7 billion in support of Hebei’s comprehensive treatment of groundwater overdraft from 2014 to 2016. After 2017, the central government integrated the original three specific water conservancy funds into an aggregated water conservancy development fund. In 2014, Hebei Province mobilized a total of CNY 7.45 billion to implement pilot projects and alleviate groundwater overdraft in 49 counties in the Heilongjiang River Basin. Hebei Province invested CNY 24.46 billion in the comprehensive treatment of groundwater overextraction from 2014 to 2016 (State Council Information Office 2017). The comprehensive treatment of groundwater overexploitation in Hebei Province has achieved notable results. From 2014 to 2020, the province's cumulative decrease in overdraft reached 4.35 billion m3, accounting for 73 percent of the designated goal, equivalent to 5.97 billion m3. The main mitigation measures for groundwater overuse in agriculture involved implementing seasonal fallow practices, adjusting agricultural cropping structures, comprehensive agricultural water price reform, and promoting water-saving technology. The central government has gradually expanded the scope of Hebei governance pilots to Shandong, Shanxi, Henan, and other provinces since 2017. In 2019, the Ministry of Water Resources (MWR), the Ministry of Finance (MOF), the National Development and Reform Commission (NDRC), and the Ministry of Agriculture and Rural Affairs (MARA) jointly issued the Comprehensive Action Plan for Groundwater Overdraft Control in North China to promote the governance experience with groundwater overexploitation control in Hebei Province. Hebei Province made significant efforts to enhance the ecological restoration of mountains, rivers, forests, fields, lakes, and grasses. The Hebei provincial government issued Opinions on Accelerating the Implementation of Ecological Restoration of Mountains, Rivers, Forests, Fields, and Lakes , which proposed building the Beijing-Tianjin- Hebei ecological conservation and protection zone through key projects in 2014 to create favorable conditions in which Beijing could transfer its non-capital core functions and industries to Hebei Province. In December 2016, Hebei Province became one of the first national-level pilot provinces for ecological protection and restoration of mountains, forests, fields, lakes, and grasses. The specific interventions involved promoting the comprehensive control of groundwater overdraft, speeding up the construction of river networks and pollution control, protecting and restoring important lakes and wetlands, promoting mountain restoration by returning farmland to forest, preventing and controlling soil erosion, promoting green Hebei action through afforestation, building efficient and clean farmlands to prevent and control soil pollution, and establishing an ecological transition zone with Beijing and Tianjin. In 2019, Hebei Province completed 143 pilot projects, and 15 others were underway (Gao 2020). Hebei Province has built an ecological compensation mechanism in key ecological function zones. In 2013, the Ministry of Environmental Protection (now Ministry of Ecology and Environment [MEE]), the NDRC, and the MOF collectively issued Opinions on Strengthening Environmental Protection and Management of National Key Ecological Function Zones, which proposed improving the ecological compensation mechanism and exploring the establishment of a cross-regional assistance mechanism. In 2014, Hebei Province designated 50 counties (districts) as ecological function areas and provided the central government’s transfer payment to support local ecological preservation. The central government support fund was CNY 2.84 billion in 2016 and increased to CNY 3.96 billion in 2020. Hebei and Tianjin provinces have established a bilateral and horizontal ecological compensation mechanism. Hebei and Tianjin signed the Agreement on Horizontal Ecological Compensation for Upstream and Downstream of Luan River into Tianjin and the Implementation Plan of Horizontal Ecological Compensation for Upstream and Downstream of Luan River into Tianjin on September 14, 2016, co-raising a compensation fund of CNY 300 million. In light of the Xin’an River basin governance experience, Tianjin Municipality committed to pay compensation to Hebei if the goals set out in the agreement are reached. Otherwise, only part of the fund or no funds will be paid. The compensation is mainly for cleaning cages in aquaculture, water pollution control and prevention, ecological protection, and restoration process of reservoirs. By December 2018, when the implementation of the ecological compensation agreement expired, Hebei Province had already successfully met various environmental restoration targets, improving the water quality of the upper reaches of the Luanhe River significantly. In 2019, Hebei and Tianjin signed the second-phase agreement to deepen their ecological cooperation. The available evidence points to promising impacts of several of these initiatives. For example: • Data from MARA show that, by 2020, 133,000 large-scale livestock and poultry farms nationwide had livestock and poultry manure treatment equipment. Under the promotion of turning livestock and poultry manure into useful products, a new model has emerged in which large-scale livestock enterprises turn manure into fertilizer and energy. In 2020, the area using organic fertilizer exceeded 37 million ha, an increase of about 50 percent over 2015 (MARA 2021). Moreover, 115 nitrogen and phosphorus emissions from livestock and poultry breeding have decreased significantly.56 • The 2020 Bulletin of the Second National Survey of Pollution Sources demonstrated the short-term achievement of fiscal support for the environment and ecology. From 2007 to 2017, emissions of chemical oxygen demand (COD), total nitrogen (TN), and total phosphorus (TP) from agricultural pollution sources decreased by 19 percent, 48 percent, and 25 percent, respectively. The output of crop residues dropped by 22.1 percent, the collectible resources of crop residues declined by 25.6 percent, and the comprehensive use rate of crop residues in China rose by 1.9 percent from 2015 to 2017 (AGFEP et al. 2021). • So far, China has successfully achieved the goal of zero fertilizer growth —between 2015 and 2020, and the aggregate amount of chemical fertilizer application has begun to show a downward trend. The zero-growth fertilizer policy went from a weak decoupling to a strong decoupling between fertilizer NPS pollution and agricultural production after 2015 (Jin, Zhang, and Wu 2018; Zhang, Sun, and Wang 2020). In 2019, chemical fertilizer use reached 54.04 million tons, a drop of more than 10 percent vis-à-vis the peak. The intensity of chemical fertilizer use (fertilizer use per sown area) was 326 kilograms per hectare (kg/ha) in 2019, which was 10.3 percent lower than in 2014. China has also witnessed negative growth in pesticide use since the early 2010s, in both absolute and relative terms, with use intensity falling to around 2 kg/ha of active ingredient in 2019, a drop of 22 percent compared to the peak in 2013. In many of these areas, there remains a large unfinished agenda. While fertilizer use intensity has been reduced, on average, it remains very high by international standards. Structural changes are impacting the ability to apply integrated solutions. For example, crop and livestock production are increasingly being undertaken by different units in different locations, raising constraints on efforts that mainstream the use of manure in place of chemical fertilizers and those that utilize crop stalks as an ingredient in livestock feed. The quality of green agriculture advice and technical services provided by newly-created service companies vary. Some might still be motivated to promote conventional inputs and technologies. Most small- and medium-sized livestock operations have yet to be aided by pollution processing facilities and rigorous supervision mechanisms. And on the consumer end, the domestic market for ‘clean’ and ‘sustainably-produced’ meat and dairy remains underdeveloped as confidence still needs to be strengthened regarding the authenticity of labels, the effectiveness of production supervision and certification, and product traceability arrangements. Considering the overall package of programs and public spending in relation to agricultural green development, a number of challenges remain. While public expenditures in support of green agriculture have indeed increased, they still pale in significance c ompared to China’s agricultural expenditures, which are either neutral to the environment, or (potentially) harmful. Chen and Zhang (2021) utilized OECD’s classification system. They found that for 2019, only 3.6 percent of agricultural spending is potentially beneficial to the environment, and 18.7 percent is likely to be harmful to the environment. The vast majority—77.7 percent—involves policies likely to be neutral toward the environment. While this is almost certainly an improvement over what a similar analysis would have shown a decade earlier, it demonstrates that much remains to be done in repurposing public programs and spending in favor of the green agriculture agenda. Several elements of this ‘unfinished business’ are highlighted below. 4.6 Institutional Reform and Adoption of Sustainable Practices: Examples of Land Tenure Security Many studies have consistently shown that adopting sustainable agricultural practices (SAPs) has led to improved economic and environmental outcomes. Despite the overwhelming evidence to support the positive economic and environmental benefits of SAPs and the widespread promotion of SAPs by 56 According to the statistics of MARA, from 2007 to 2017, chemical oxygen demand (COD) emissions from livestock and poultry breeding dropped by 21 percent, TN emissions decreased by 48.8 percent, and TP emissions declined by 51.4 percent. 116 governments, the adoption rates of SAPs in many developing countries remain low. Existing studies exploring the determinants of the adoption of SAPs have identified a wide range of factors from household characteristics (for example, household assets, household wealth, head’s age, head’s education, head’s experience) to government roles (for example, training, extension, internet access, and subsidy and conservation programs) and to policy and institutional factors (for example, land property rights). China is an important case for studying the effects of farmland policies on SAPs, given the severity of its land and water degradation (Jia et al. 2014; Liu et al. 2014; Wang et al. 2016; Yang et al. 2013; Yang and Qiao 2018; Zhang, Sun, and Wang 2020) and the significant evolution of China’s farmland policy toward achieving more secure and transferable property rights of land over the past few decades through government regulations, land laws, and land reforms. Jin and Gao (2021) draw upon the China Rural Household Panel Surveys (CRHPS) for 2015, 2017, and 2019 to assess how the recent land certification program affects farmers’ adoption of SAPs and their participation in land rental markets. They go on to assess how farm scale, which is closely associated with land rental activity, affects farmers’ propensity to adopt SAPs. And finally, how adopting SAPs affects farmers’ agricultural productivity, income, and consumption. In addition to detailed socioeconomic information, the CRHPS include attention to land tenure security and land rental markets and information on whether or not farmers have adopted selected practices, including the use of organic manure (partly in place of chemical fertilizers), retention and use of straw (rather than burning or discharge), and overall intensity of fertilizer and chemical use. Comparisons were made between farmers in certified vs. uncertified villages and between farms of different sizes. Overall, the results of the analysis are encouraging. For example, the analysis found that: • Certified households were more likely to use organic fertilizer than uncertified households, plus the total amount of fertilizer used per mu was somewhat lower on certified farms. Such patterns would result in a decreased level of aggregate pollution from fertilizer and mulch. • Certified households were more likely to adopt straw retention, with this likelihood increasing over time (that is, for each additional year after certification) and increasing significantly among farmers utilizing mechanization services. Land certification itself was found to bring about significant increases in the adoption of mechanization services. • Certified households demonstrated a higher probability of engaging in land rental markets, leading, overall, to a higher average cultivated land area for the certified households. Certified farms were more likely to participate in renting land in and out, thus potentially contributing to greater efficiencies in overall land use to the extent to which those renting land have greater capability and motivation to maximize its use. • Increases in farm sizes were associated with a higher incidence of organic manure use and straw retention, and a lower intensity of chemical fertilizer and pesticide uses. • Certified households have a higher propensity to participate in off-farm employment, although this effect dissipates with age. In other words, land certification has a significant positive effect on off- farm employment for younger farm members (in their 20s and 30s), but this effect approaches zero by the time members reach their early 40s and is negative after that. • Both the adoption of straw retention and agricultural mechanization was found to increase agricultural productivity substantially. The magnitude of the effect of organic manure was much smaller. The adoption of both straw retention and organic manure boosted agricultural incomes, presumably through short-term reductions in cost and longer-term impacts on soil quality. Taken together, the study found a clear link between land tenure security, land consolidation, and the adoption of SAPs. The positive influence of certification appears to increase over time. The security effect of the certification seems to have increased farmer participation in land rental markets and the off-farm employment of young adults. This incremental land consolidation and the role of off-farm employment form part of the wider modernization of Chinese agriculture and the transformation of its rural economy. 117 There remain some unanswered questions. For example, how have improved property rights impacted broader land conservation measures, carbon sequestration investments, and other practices? Is the ability to use land management rights as collateral now enabling farmers to better access loans to assist with SAPs, which require greater upfront investments? And why do we see only very modest (yet statistically significant) differences between farmers with and without secure tenure in their adoption of SAPs? For example, based on survey evidence, 52.7 percent of certified farmers were using organic fertilizer compared to 49.4 percent of uncertified farmers. The average amount of fertilizer used was about 10 percent lower on certified farms than on uncertified ones, although fertilizer intensity rates for many of the certified farms were still far above official recommendations. There is still a long way to go in terms of SAP adoption rates and fertilizer-use intensity. Instruments over and beyond land certification may be needed—perhaps additional incentives (that is, conditional subsidies) and more effective advocacy and extension. 4.7 Unfinished Business As noted here and in other papers in this volume, China has made enormous strides in raising agricultural productivity, advancing national food security, and tackling rural poverty. Its agricultural sector is in the midst of a broad process of transformation, catalyzed by major demographic, economic, and dietary changes and featuring major structural changes in what is produced, how it is produced, and how production and value chains are organized. Both policy and fiscal support from the government have played important roles, contributing to past achievements and facilitating many of the ongoing structural changes. Some of the biggest challenges and opportunities now facing Chinese agriculture relate to its relationship with the environment. The past expansion and intensification of Chinese agriculture often came with a high environmental cost, both locally and beyond. The forms and magnitude of these adverse environmental impacts have been increasingly recognized and measured. And over the past decade, a broad range of policy and regulatory initiatives have been adopted to restore or improve rural ecosystems, promote the development and adoption of green agricultural technologies, and incentivize more sustainable practices. In each of these areas, there have been notable achievements. Yet, there remains a large unfinished business pertaining to the greening of Chinese agriculture—unfinished in terms of policy, fiscal support, institutional strengthening, and adoption of better practices on the ground. For example, major obstacles to the implementation of green subsidies still exist due to the lack of clear indicators of policy objectives and a well-rounded monitoring system. Proper environmental indicators have not been identified yet, and the widely recognized environmental protection and treatment standards are still insufficient. Notably, there is currently no specific objective for carbon emissions in the agricultural sector, and monitoring the carbon emitted from agricultural activities is difficult. In addition, most of the current eco-environmental fiscal support policies for agriculture are not accurately targeted at farmers. Only a few existing fiscal subsidies are dedicated to transforming farmers' production practices and incentivizing them to adopt green technologies. And to date, the willingness of farmers to participate in environmental governance has been very mixed. Furthermore, the ecological and environmental problems vary greatly across different regions, and more effort is needed to better match interventions with local conditions and needs. Chinese stakeholders are learning a great deal from implementing current policies and pilots. This experience can inform adjustments in the policy mix and the modalities for program implementation. Going forward, major gains can be realized through the following recommendations. 4.7.1 Accelerating the Green Transformation of Fiscal Support to Agriculture Although agricultural public expenditures for preventing environmental pollution and protecting the environment have increased significantly in the past decade, the current absolute amount of investment in nature-positive subsidies is far from enough. As noted earlier, only a small proportion of China’s public expenditure in agriculture in 2019 supported policies clearly beneficial to the environment. Going forward, 118 a much larger proportion of fiscal support to the sector could be dedicated to supporting agri- environmental objectives. That would imply decreasing expenditures still coupled with production while further prioritizing the development of green technology in R&D expenditures, alleviating soil and water pollution from fertilizer, pesticide, plastic film, and livestock and poultry waste, reinforcing climate adaptation and disaster resistance; and increasing the efficiency of land and water use. 4.7.2 Further Mainstreaming and Refining Policies to Conserve Natural Resources and Decrease Agricultural Pollution At the broad strategic level, there is scope to better mainstream the greening of agriculture within the national RRS. In this regard, the government could adopt policies to improve the ecological infrastructure, restore the ecological landscape, and enhance agriculture’s ecological and cultural values . In more specific areas, China can further strengthen the governance of groundwater overexploitation and ecosystem preservation. Best practices, including those addressing agricultural NPS pollution, using crop straw, substituting organic fertilizer for chemical fertilizer, applying a pesticide traceability system, recycling plastic mulch, and promoting circular agriculture, are worth further expansion and institutionalization. Opportunities also exist to integrate green agriculture aims and incentives into the government’s support for rural financial institutions and programs, such as agricultural insurance. 4.73 Integrating Green Agricultural Dimensions into Programs that Ensure Inclusive Access to Rural Financial Services and Tapping into Sources for Carbon Financing The government is supporting an array of programs geared toward developing a more robust and sustainable system for rural financial services. An opportunity exists to further marshal the experience, resources, and outreach of the country’s rural financial institutions to further promote green agriculture and rural development. This could be done, for example, by launching fiscal and financial policies that help to mobilize resources for green agricultural endeavors by providing technical assistance to enable banks to undertake environmental screening and monitoring of (prospective) clients and by the creation of special lending and insurance products targeting farmers who have adopted sustainable practices. Efforts to tap into carbon finance have thus far focused on energy and transport. Current pilots promoting carbon sequestration could be used to pave the way for applications of carbon finance in agriculture. 4.7.4 Further Developing Agro-Environmental Indicators and Strengthening Their Measurement at National and Subnational Levels Incomplete technical standards for monitoring and evaluation and insufficient capabilities remain major challenges in promoting green agricultural transformation and climate-smart agriculture. For example, at the national level, there is a need to develop standards and technical specifications for monitoring and measuring carbon emissions in agriculture and to ensure that these are effectively applied to provide more accurate and up-to-date estimates. Also, at the national level, the efficacy of certain policies and programs might be better understood if more agro-environmental indicators (related to crop rotation, fallowing, waste management, etc.) were included in future large-scale rural household surveys. To enable government departments to improve the monitoring of investments in green agriculture, concrete, quantified, and comparable indicators could be developed and applied to measure and benchmark regional eco-performance. 119 4.7.5 Continuing to Refine Agro-Environmental Subsidy and Eco-compensation Programs to Improve Their Targeting and Effectiveness Subsidies can be designed with clear and conditional environmental requirements so that only producers who meet them receive them. The instruments used for such programs may need to be modified when targeting different producing entities, including small farms, larger family farms, cooperative farms, and farms run by agribusiness companies, and to incentivize agricultural services companies to apply green agricultural technologies. Lessons can be continually drawn from the existing payments for ecosystem services programs, and incentives and monitoring arrangements can be refined as needed. Some eco- compensation programs, especially those involving forest protection or reforestation, could expand to promote biodiversity. Finally, increasing attention could be given to cross-provincial mechanisms for eco- compensation, thus allowing local governments to jointly address cross-border ecological concerns. 4.7.6 Intensifying the Monitoring of Pilot Programs to Decrease Pollution, Conserve Natural Resources, and Build on Emerging Lessons to Scale Up the More Effective Programs Existing programs aim to promote adopting a wide range of practices, technologies, and approaches. These range from specific technical practices, such as using crop straw, recycling mulch film, and substituting organic for chemical fertilizer, to broader integrated approaches, such as those associated with circular agriculture and climate-smart agriculture (CSA). Resource allocations to particular programs should be based, in considerable part, on their cost and technical effectiveness and areas where synergies can be realized. Further analysis of the factors influencing farmer adoption (and continued application) of various sustainable practices may be needed. Improved monitoring and evaluation may also provide feedback to inform additional R&D on technical solutions and refinement of advisory service approaches and farmer incentives. Plus, those interventions deemed to have had only limited impact can be contracted in scope, modified to improve their impact, or canceled. Executing future actions based on such reviews would help ensure that the greatest net gains can be made from the central and provincial public investments in these worthy actions. Such a learning approach is consistent with the notion of “crossing the river by feeling for the stones.â€? 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