6 Agricultural policy adjustment in the process of trade liberalisation 1

The development of China's agricultural policy since 1949 can be divided into two stages on the basis of policy objectives. During the first stage, from the early 1950s to the late 1970s, the main objective of agricultural policy was to support industrialisation. In order to maintain lower costs for urban industries, agriculture was heavily taxed and agricultural prices were kept at a very low level by means of central controls. Consequently, China's agriculture developed at a very slow pace and farmers' incomes were virtually fixed for thirty years.