Changes in social and economic conditions do not include anything new across China, yet there has been a dramatic acceleration in the pace of change. Following demographic change and industrialization, China is at the point where there has been a decline in the supplied surplus rural labor. In addition, real wages have started to rise for drawing labor out of agriculture in different industries of the economy. Drawing upon international lessons and experiences regarding the management of implications across China is significant for minimizing the negative impact of policies of agricultural production. This is further ahead crucial for raising the productivity of agriculture and for stabilizing the levels of food consumption. Since membership was achieved with the WTO, there has been a significant increase in the food imports and exports of China. Such mechanisms of adaptation work for reshaping the food system of China, while significantly affecting the issues of food security (Rosegrant & Cline, 2013). Key difficulties are faced by smallholder for dealing with each and every new requirement and potentially high costs of transaction that result in the modernization and transition of food market platforms. From the other perspective, smallholders tend to be holding a comparative benefits in the production of some crops requiring low cost, abundant labor and local knowledge.
Smallholders have the ability of meeting the stringent standards of quality often facing significant issues in regards to the accessibility of storage, transportation, credit and inputs. The patterns of trade have been shaped as well by the exports of China under the restriction of safety and high quality standards applicable across importing nations. Additional factors include the absence of customer confidence in specific domestic value chains (Mansourian, 2011). These tend to accelerate rapid growth in the import of dairy products.