Farming must become more efficient if China is to narrow the huge wealth gap between its rural and urban populaces, a new report says.
Rural incomes are three times lower than in the cities
According to the Organisation for Economic Co-operation and Development (OECD), agriculture accounts for 40% of all jobs but just 15% of output.
Farms must be integrated into domestic and international markets, and limits on urban migration should be eased.
An estimated 88 million rural Chinese live below the poverty line.
In its first study of Chinese agricultural policies, the OECD - a group of 30 leading industrialised nations - said China's main challenge was reducing the growing inequality between cities and rural areas.
RURAL CHINA: FACTS
China has 10% of the world's arable land
China has about 200 million farm households
Urban incomes are three times higher than rural incomes
Since 1990, farming output has risen 90%
China should allocate its financial support to farmers more efficiently to improve productivity and sustain the environment.
Suggested measures include creating independent farm marketing organisations, improving access to rural finance and making it easier for farmers to buy and rent land on a long-term basis.
China should reconsider its policy of trying to become self-sufficient in grain production, investing instead in products such as fruit and vegetables, where it has a genuine competitive advantage.
Current limits on the level of legal migration from the countryside to cities should also be relaxed to make production more efficient.
"Remarkable progress has been achieved in China in many areas since the 1980s," the report said.
China is being urged to invest more in growing fruit and vegetable
"But poverty is still high in rural areas and one of the main challenges facing the Chinese government is to reduce the growing inequality between country and city dwellers."
Millions of Chinese have left rural areas in search of work in cities, which have been expanding at a breakneck pace.
According to the World Bank, about 88 million rural Chinese have an income of less than $1 a day.
Average rural pay is three times lower than in urban areas.
Aware of growing economic disparities, the Chinese government spent a record $18bn on rural infrastructure last year.
However, the OECD called for greater investment in education and healthcare as well as more stringent food safety standards.