The rural landscape of India and China (INCH) combined is truly a force to reckon with. In terms of agricultural value-added output, China and India rank first and second in the world. No wonder, rural INCH is the rice bowl for more than one-third of the world’s population. Accounting for nearly half of the world’s rural population, it’s bigger than INCH itself which represents 37 per cent of the world population… reflective of the rural dominance of both nations combined.
Given the fact that both countries are still in the developing state, the share of their agricultural sector is obviously large. But over four decades, the share has come down sharply (from 41 % to 18 % and 36 % to 11 % for India and China respectively) thanks to the rapid economic growth in both countries.
While both nations have shown growth in urbanization, China’s rate is much higher owing to its bigger industrial sector. Hence, the rural-to-urban transition assumes different trajectories in both countries. In the case of China, the rapid decline in rural population is expected to fuel per capita incomes while for India, the continued increase, though at a fading momentum, is likely to further raise the rural consumption base.
It’s prudent to study the contrasts lurking in the similarities of the two nations.
In terms of landscape, China commands more than three times that of India but India’s arable land is 11 per cent more than China. The Chinese substantially lead in the production of meat, maize, cereals, soya bean and cotton but India is the world’s largest milk producer with 2.5 times more milk than that produced in China. Maize, a major feedstock, is harvested more in China as it’s the world’s largest meat producer while India has a large percentage of vegetarians. While land usage for food grains is much more in India, China has more land covered to grow vegetables. India and China together account for 20-50 per cent of the global production of all major agricultural products with the exception of soya bean.
While India is running a trade surplus in land-intensive produce (food grains and crops using cultivable land) as well as labour-intensive produce (animal, horticultural and processed products), China tells a different story. While it roughly has balanced trade for labour-intensive produce, it’s running a high deficit in land-intensive produce. This is largely due to the soya bean productivity gap between China and other nations.
China’s agricultural productivity is substantially higher than that of India - thanks to more fertilizer consumption, well-equipped agricultural machinery and better irrigation efficiency although both countries face a looming threat of water shortage in the coming years.
In terms of population increase, India is expected to dethrone China as the world’s most populous nation by the year 2030 - this means that the share of the working-age population would be greater in India calling for additional food supply at a much faster rate. India will need to raise its food supply by 70 per cent (from base year 2005 till target year 2030) - 3.3 times as fast as China.
The government focus on rural development has seen a substantial increase in both countries. Both put social welfare as the top priority along with rural infrastructure but the difference lies in the main thrust. India focuses on job creation on the rural side while China is more concerned with food security for the rural populace.
As far as household consumption is concerned, rural households account for more than 55 percent of the total private consumption in India while for China, this figure stands at less than 30 per cent. With its higher per capita GDP and disposable income, China can serve as a lead indicator for India. In the coming years, rural India is likely to see greater demand for transport, residence and education while the rural Chinese are expected to demand more of clothing, consumer goods and education.
To tap the unleashed consumption power of rural INCH, it’s critical that the ensuing productivity increase in rural INCH meets the increasing demands of its rural population in both countries.
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