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The project studies the impact of China's current economic transition on its agricultural economy with special reference to the consequences of trade liberalization and of changing trade flows. The project will track impacts on social conditions and on the environment in China's rural areas as well as on markets in the rest of the world, with particular emphasis on the EU. For this, the research considers (a) the dynamic, rapid pace of the transition; (b) the size and geographical diversity of the country; and (c) the effect of the changes on the rest of the world. The research opts for a quantitative approach, supplemented by qualitative investigations, and focuses on three themes: trade, social conditions, and environment. On trade, the research aims to account for the size of China's trade and take a closer look at trade between the EU and China with scenario simulations over the period 2000-2030, by establishing a linkage between (a) the Chinagromodel, a spatially explicit equilibrium model that comprehensively depicts China's farm sector in 2433 counties, while connecting these through trade and transportation flows; (b) the GTAPmodel of world trade; (c) FEA-27, a model of EU-agriculture for 27 members states. The research on social conditions proceeds by linking geo-referenced household surveys to a population census of China and a detailed geographical data set, relying on a suitable adaptation of poverty mapping methodology, so as to trace impacts at household level. Finally, we use agro-ecological assessment tools to quantify the environmental pressures resulting from intensified livestock industry as well as from intensified horticulture production. Findings on the three themes are subsequently integrated to arrive at policy suggestions that account for efficiency, equity and sustainability considerations. Throughout the project, a policy dialogue and dissemination program, conducted in both China and the EU, maintains communication with policy makers.

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Scott Rozelle
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Meeting the world's energy needs and at the same time reducing emissions of greenhouse gases is one of the grand challenges humans must face in this century. China's situation illustrates the magnitude of the challenge as well as any place in the world. Its economy is growing rapidly, energy shortages abound, and a primary source of energy is coal. This talk reviews China's current and projected future emissions of carbon dioxide, examines alternatives for meeting the combined goals of increasing energy supply and reducing emissions, and describes research underway to provide more options to meet the challenges China faces.

Lynn Orr focuses his research activities on the interactions of fluid phase behavior with multiphase flow in porous media, the design of gas injection processes for enhanced oil recovery, and C02 sequestration in subsurface porous media. In August 2005, Dr. Orr and the Global Climate and Energy Project hosted an international conference at Tsinghua University in Beijing, China, to explore opportunities for collaborative research to integrate advanced coal technologies with CO2 capture and storage in China.

This series is co-sponsored with the Center for East Asian Studies at Stanford University.

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Franklin M. Orr Keleen and Carlton Beal Professor of Petroleum Engineering, Professor, by courtesy, in Chemical Engineering and Director of the Precourt Institute for Energy, FSI senior fellow by courtesy Speaker Stanford University
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Professor Park will address the changes that have occurred in the Chinese labor market over the past quarter century, focusing on the extent to which labor market reforms have successfully created a well-functioning market for labor with a high degree of labor mobility. Like other rapidly growing developing countries, China has experienced rapid structural change featuring a steady flow of labor from agriculture to industry, and from rural areas to urban areas. As a transition economy, China has shifted gradually from planned allocation of labor in state-sector jobs to a more open labor market. Although the large magnitudes of these changes are impressive, reform of the labor market has been halting, uneven, and difficult, with much additional reform still required. Prof. Park will look at several dimensions of the Chinese labor market: labor allocation, wage setting, regional differences, and ownership sectors. He will conclude by discussing the key policy challenges that lie ahead.

Albert Park is Associate Professor of Economics and Faculty Associate of the Center for Chinese Studies at the University of Michigan. He is also a research affiliate at the Population Studies Center and chairs the faculty steering committee for Michigan's China Data Center. Dr. Park has been a visiting professor and researcher at Harvard University and Peking University, as well as other research institutions in China and Taiwan, and has served as a consultant for the World Bank on several projects analyzing economic development issues in China, including the Bank's current China Poverty Assessment project. Dr. Park earned a Ph.D. in applied economics from the Food Research Institute and Department of Economics at Stanford University in 1996. His research interests include economic development, economic transition, labor, applied microeconomics, and the Chinese economy. He is involved in numerous collaborative research activities in China, including several large survey projects to study labor market developments in urban areas, and rural education, health, and labor outcomes. He has published over thirty journal articles and chapters in edited volumes, and is the coeditor of a forthcoming volume titled Education and Reform in China. At Michigan, he teaches a graduate course on the microeconomics of development and an undergraduate course on the Chinese economy.

This series is co-sponsored with the Center for East Asian Studies at Stanford University.

Philippines Conference Room

Albert Park Associate Professor of Economics Speaker University of Michigan
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One of the few ways to get a taste of North Korea, short of leaping through numerous hoops to get a visa to visit the country, is to eat cold noodles (naengmyen). Most South Korean cities and even a few American ones offer several types of North Korean-style noodle restaurants. The version often prepared in Pyongyang, North Korea's capital, is mul naengmyen, or cold noodles in broth. It is served in a large metal bowl and looks like a flowering mountain rising up from the sea. Artfully balanced atop the mound of noodles made from buckwheat flour are julienned cucumbers, several slices of beef, half a hardboiled egg, and a few pieces of crisp Korean pear. When prepared Hamhung-style -- named after the industrial city on North Korea's east coast -- noodles are made from sweet potato flour and often topped with raw skate, which has a slightly ammoniac flavor.

The signs in the South advertising Northern-style cold noodles are a reminder of the Korean War and the division of the peninsula. After the Korean War, refugees from the conflict set up stalls in the markets of Seoul to sell the "taste of the north" to those who could no longer travel there. The recipes they brought with them to the south were sometimes the only valuables they carried. In the 1990s, a new wave of North Koreans came to the South and established naengmyen restaurants. Hailing from the North lends a certain authenticity to the preparation of the dish. Whether prepared by the refugees of the 1950s and their descendents, the defectors of the 1990s, or North Koreans themselves in Pyongyang or Hamhung, cold noodles are something that North Koreans are widely credited with doing better than South Koreans.

But the way naengmyen is "consumed" in the South reveals the great disparity between the two countries. There are many jokes in South Korea about the number of North Korean defectors who have only this one marketable skill. Since cooking in Korea is largely a woman's job, the close association of North Koreans with the production and sale of cold noodles subtly feminizes and, according to patriarchal Korean values, devalues them. North Koreans are thus second-class citizens, both those who are unemployed (the majority) and those who are employed only to provide service to the real "breadwinners" of the country. Anthropologist Roy Richard Grinker relates how South Korean textbooks and popular culture often depict North Korea as the younger brother of the more advanced South Korean older brother. Given the cultural associations of naengmyen, wife to husband might be the more appropriate analogy. A recent Joongang Ilbo Photoshop cartoon reinforces this sexist gloss on inter-Korean relations by depicting South Korean President Roh Moo Hyun dressed as a Choson-era husband with North Korean leader Kim Jong Il as his bride.

In a divided country, cold noodles serve as an important reminder of a common culture. They also represent a unique contribution that the economically weaker North Korea can bring to the reunification process. But however tasty Pyongyang-style mul naengmyen may be, cold noodles ensure neither a sustainable livelihood for every North Korean defector nor an equal place at the reunification table for North Korea.

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Korea stands at a critical juncture, as it transitions from mid-level to advanced country status. Yet at this important time, Korea seems to have lost its sense of direction. Ideological confrontations, uncertainty about identity, mistrust of the political process and the government, reform fatigue, and, above all, lack of vision have become endemic. Such symptoms are not unique in this global "age of deconstruction," but they are more salient in Korea, where crushing ideological disputes, ongoing inter-Korean conflict, and fallout from of rapid, intensive modernization have put the country in crisis.

If Korea is to move forward, politics and government must regain the confidence of the people. The country cannot become an advanced nation if its ideological obsessions remain entrenched. Creative, pragmatic leadership will bring outcomes-oriented vision, inclusiveness, and focus to the goal of sustainable development on the Korean Peninsula.

A period of historic uncertainty often ushers in an era of progress, and the current crisis presents a tremendous opportunity. Now is the time for Korea's leaders to learn from the past, embrace pragmatism, and make history.

Goh served as the Acting President when the current President, Roh Moo Hyun, was indicted for impeachment by the National Assembly on March 12, 2004 and his powers, including those of Commander-in-Chief, were transferred to Prime Minister Goh until Roh was acquitted by the Constitutional Court in May of the same year. As Acting President, Goh was widely acclaimed for his crucial role in restoring South Korea's stability, handling foreign affairs skillfully, and managing the central government effectively.

Goh has served as the 30th Prime Minister (1997-1998), twice as the Mayor of Seoul, (1998-2002, 1988-1990), Minister of Home Affairs (1987), Member of the National Assembly (1985-1988), Minister of Agriculture and Marine Affairs (1981-1982), Minister of Transportation (1980-1981), and Chief Secretary of Political Affairs to the President (1979-1980).

He holds the record as the youngest Governor in South Korea. At the age of 37, he became the Governor of Jeonnam Province in 1975. He was appointed by the President to lead a national agricultural modernization program called the New Village Movement, which transformed South Korea's agricultural sector into one of the most modernized and productive in Asia.

Between government posts, Goh has served as the Chairman of Transparency International in Korea to fight corruption in South Korea, a life-long cause for Goh. He has also served as the Co-President of Korean Federation for Environment Movement and president of Myong Ji University. He is a 1960 graduate of the Seoul National University. He was a Visiting Fellow at Harvard University in 1983 and a Visiting Professor at MIT in 1984. He is married with three sons.

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Goh Kun 35th Prime Minister of the Republic of Korea Speaker
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Donald K. Emmerson
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When the 9.0-magnitude earthquake and resulting tsunami struck Asia and East Africa on December 26, Indonesia took a devastating hit. More than 100,000 people died and another 500,000 were left homeless, with some experts predicting that the final death toll may rise above 250,000. Aceh province on the northern tip of the island of Sumatra, where the Free Aceh Movement rebel forces have been fighting against the Indonesian Defense Forces for almost 30 years, was at the center of the destruction. Donald Emmerson, a senior fellow at the Stanford Institute for International Studies and director of its Southeast Asia Forum, is an Indonesia specialist who has been traveling to Aceh since the late 1960s. He's finishing a book entitled What is Indonesia? Identity, Calamity, Democracy.

STANFORD: What do we need to know about Aceh province?

That it's a wonderful place, that the people have a tradition of hospitality, and that they share with you what they have. It's very sad that it has been subject to so much violence and conflict for so many years.

What's been happening in recent times?

Since May 2003, Aceh has been virtually off-limits to foreigners. The [military] reasoning is that it's for security reasons, but there's always been a suspicion that it's also because bad things -- horrible things, killings and so forth -- are done in the dark, and they don't want people to watch. Certainly the human rights community has had great difficulty getting access to Aceh.

What could happen as a result of some 1,000 representatives of aid organizations being on the ground there?

The opening of Aceh to foreign and domestic humanitarian aid workers has the potential to introduce elements that can serve as a check on human rights abuses. Obviously, the time for mourning is not over. But if we can insert a silver lining in this very dark cloud, it might be that the devastation of the tsunami opens up an opportunity to rebuild much of Aceh, and that it will require cooperation among all Acehnese. I am cautiously optimistic about the opening that this catastrophe represents for trying to lessen the man-made pain of the Acehnese people.

What might a rebuilt Aceh look like?

The plan is to take villages that were destroyed, and maybe even the town of Meulaboh on the west coast, which was the worst hit, and move them inland a certain number of kilometers. Then, construct mangrove swamps as barriers against a repetition of the tsunami, and also to protect the soil from erosion and generate the possibility of brackish-water fishing for the livelihoods of the people. This is a massive effort that is going to last for years and years. Authorities have estimated that the rebuilding costs in Aceh could run to $2.2 billion.

Fishing villages would no longer exist on the coast?

I spent nine months in fishing villages in East Java, and I found that the relationship of the populations on the coast to the ocean is not necessarily what one would expect. They are not happy bathers on the beach, fishing is an extremely dangerous operation, and the ocean is considered a wild place.

Many fishing communities are overfishing the source. I wrote a long report for the Ministry of Agriculture's fisheries office, arguing that what Indonesia ought to do was take the money the government was spending to supply nylon fishing nets and higher horsepower outboard motors, and spend it on wives who were involved in craft commodities. The women have commercial skills, and getting microcredit programs for women to set up shops and expand is the future.

How will religion figure in that future?

Aceh is known in Indonesia as "the front porch of Mecca." The Acehnese are almost entirely Muslim. While there's a tendency among Americans to presume that [a Muslim nation] must be fanatic, Indonesia remains an overwhelmingly moderate society. There is a poignant photo, which hasn't been circulated in the U.S. press, of a sign at a depot for humanitarian relief supplies. It reads, "If you try to steal this material, you will be responsible to Allah."

The following is supplemental material that did not appear in the print edition of STANFORD.

What was the overall impact of the tsunami in Indonesia?

I think it's important to keep in mind that each of the affected countries was affected in a somewhat different way. In Sri Lanka, an estimated 70 percent of the coastline of the entire island was affected, so the economic consequences there are going to be more severe than the damage that was done to Indonesia. If you go down the west coast of Sumatra, you will see damage, but the main damage was overwhelmingly concentrated in a single province, Aceh, which represents less than 2 percent of the total population of Indonesia. Aceh got a double-barrel assault -- from the earthquake and the tsunami. The death toll was horrid, with a huge loss of life, but it was concentrated on the coasts.

How does Aceh's history set it apart from the rest of Indonesia?

The first record we have of an Islamic sultanate in what is now Indonesia is a stone carving dated 1297, on the north coast of Aceh. Aceh was closest to the Middle East, and there were Muslim traders who would go short distances, pause, sell, buy and reload. Long-distance Arab-Malay trade finally got to Indonesia, and the logical landfall was Ache.

Then there were tremendous and unequal casualties in the war against the Dutch, who recruited Ambonese troops to fight a colonial war in Aceh in the 19th century. There's a photograph of Dutch troops standing on the dead bodies of Acehese rebels. The Acehnese war lasted a long time, and it was one of the last parts of the archipelago to be fully brought into the colonial orbit.

Aceh has been for some time under a state of military emergency, and an estimated 13,000 have died as a result of the [rebel] war since 1976. But the tsunami has changed all that. Looking at it from a political science point of view, if we don't begin trying to analyze the situation, I'm not sure we can make it better down the road.

What needs to happen?

In a time of crisis what you need is efficiency and effectiveness, and you need somebody to stand up and say, "This is the way things are going to be." But the governor of Aceh is, by all accounts, exceedingly corrupt. He is in Jakarta now, in detention, awaiting trial on corruption charges. So you don't even have an active, sitting provincial government leader to take charge.

The number of members of the provincial administration who died in the tsunami is quite high, and the central government has had to send up 300 replacements from Jakarta. The administration of Aceh has essentially been completely taken over by the central government. This is potentially unhelpful, depending on how sensitive and effective the central government is and how corrupt the atmosphere is within which masses of foreign aid are moving.

The somewhat optimistic scenario is that now Aceh is even more dependent on the central government than it was before, with the need to rebuild substantial portions of its coastline. So a leader of the [freedom] movement [might] look down the road and say, "It's unrealistic for us at this point, with this incredible body blow to our economy, to expect that we can now somehow take over Aceh. We are more dependent than we were before on the central government."

And, conversely, in Jakarta there might be the thinking that since Aceh now so obviously needs support within the republic, "We are in a stronger position, and therefore we can afford to be generous, and to extend concessions, short of independence, that will take advantage of this." The bottom line is that two enemies who were at each other's throats now face a third enemy -- nature.

Are there other voices that should be heard in Aceh?

One of the difficulties of having negotiations between the Acehnese Freedom Movement and the central government is that it tends to exclude other Acehnese views, which is one reason why negotiations that took place previously were not successful. Acehnese society is pretty diverse, and the Acehnese Freedom Movement does not represent all Acehnese, not to mention the Javanese and Indonesians who have migrated into the province, who are university students and [members of] religious communities.

The conflict has lasted for 30 years in its present form, and it has created such enmities that there is no particular mood to compromise. The government has no incentive to reach out, and the Acehnese Freedom Movement remains intransigent. In the long run, those who disagree with a so-called freedom movement are in the shadows and their views tend not to be reported. My hope is that as these voices are allowed to take part in determining the future of Aceh and its political leadership, the polarization will decrease and there will emerge a kind of more moderate center, in favor of autonomy and full rights.

In the 1990s, the United States cut military assistance programs to Indonesia. Is the relationship between the two countries improving?

SBY -- Susilo Bambang Yudhoyono -- is a former military man, but he's identified as relatively clean, and associated with a somewhat more reform-minded element within the military. More than any previous president of Indonesia, he has had exposure to the United States. Certainly this is an opportunity for an improved relationship between Indonesia and the U.S.

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Agricultural production in North Korea collapsed between 1990 and 1996, leaving the country dependent on massive international food assistance. The causes of this agricultural decline are primarily found in the policy decisions which guided the development of DPRK farming, and which have not been adequately addressed either by the government or by international aid organizations. It is, however, feasible for the DPRK to produce enough food to satisfy basic domestic needs. A scenario is proposed in which the DPRK could increase food production, using sustainable farming methods. The cost of international assistance to facilitate such a restructuring would be similar to the current cost of food aid, and such assistance would strongly encourage increased technical and economic cooperation between DPRK organizations and their international counterparts.

Randall Ireson coordinates the American Friends Service Committee agriculture assistance program in North Korea. Over the last seven years he has made numerous trips to the DPRK, and accompanied nine agricultural study delegations from the DPRK to the US and other countries. Dr. Ireson has managed or evaluated many rural development projects, mostly in Southeast Asia. He has written extensively on social and development issues in Laos, and also taught sociology at Willamette University. He holds a Ph.D. in Development Sociology from Cornell University.

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Randall Ireson American Friends Service Committee
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China's rapid growth and increasingly close integration with world markets is transforming Northeast and Southeast Asian regional production and trade. Southeast Asia's relatively resource-abundant economies are expected to lose comparative advantage in low-skill, labor-intensive manufacturing activities while gaining comparative advantage in natural resource products. The latter shift will increase incentives to exploit and export the products of forestry, fisheries, and agriculture.

What are the implications for long-run growth and welfare, particularly in the poorest and least industrialized economies, including Indonesia and Vietnam? How will this trend interact with the other major phenomenon sweeping through Southeast Asia, i.e., decentralization? With reduced national authority and minimal local accountability, the potential for disastrous rates of resource exploitation is high. A race to liquidate natural resource assets, if sufficiently pronounced, could expose parts of the region to a new variant of the "natural resource curse" - the idea that resource-abundant economies grow more slowly than others.

Ian Coxhead is an economist and serves as director of the Center for Southeast Asian Studies at the University of Wisconsin-Madison. His specialty is the economic development of Southeast Asia. His many publications on trade, development and the environment include The Open Economy and the Environment: Development, Trade and Resources in Asia (2003, with Sisira Jayasuriya). Prof. Coxhead's current research features the impacts of globalization, regional growth, and domestic policy reforms on the structures of production and employment, issues of poverty and the environment, and the exploitation of natural resources in Vietnam and the Philippines.

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Ian Coxhead Professor of Agricultural and Applied Economics University of Wisconsin, Madison
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As seen in the previous sections, China's reformers, more than anything, have followed a
strategy based on providing incentives through property rights reforms, even though in China the shift to private ownership is today far from complete. The reforms started with the Household Responsibility System (HRS), a policy of radical decollectivization that allowed farmers to keep the residual output of their farms after paying their agricultural taxes and completing their mandatory delivery quotas. Farmers also began to exercise control over much of the production process (although in the initial years, the local state shared some control rights and in some places still do today). In this way the first reforms in the agricultural sector reshuffled property rights in an attempt to increase work incentives and exploit the specific knowledge of individuals about the production process (Perkins, 1994). In executing the property rights reforms, leaders also fundamentally restructured farms in China. Within a few years, for example, reformers completely broke up the larger collective farms into small household farms. In China today there are more than 200 million farms, the legacy of an HRS policy that gave the primary responsibilities for farming to the individual household. McMillan, Whalley and Zhu (1989), Fan (1991), Lin (1992) and Huang and Rozelle (1996) have all documented the strong, positive impact that property rights reforms had on output and productivity. 

In addition to property rights reform and transforming incentives, the other major
task of reformers is to create more efficient institutions of exchange. Markets-whether
classic competitive ones or some workable substitute-increase efficiency by facilitating
transactions among agents to allow specialization and trade and by providing information
through a pricing mechanism to producers and consumers about the relative scarcity of
resources. But markets, in order to function efficiently, require supporting institutions to
ensure competition, define and enforce property rights and contracts, ensure access to
credit and finance and provide information (John McMillan, 1997; World Bank 2002).
These institutions were either absent in the Communist countries or, if they existed, were
inappropriate for a market system. Somewhat surprisingly, despite their importance in
the reform process there is much less work on the success that China has had in building
markets and the effect that the markets has had on the economy.

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Food and Agricultural Organization
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Scott Rozelle
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