Peanut harvester works in Chiping township in Liaocheng city, Shandong province, Aug 22, 2014. [Photo/CFP]

Related story: China's agriculture under challenges: official

China's agriculture faces three challenges to achieve sustainable growth, said Han Jun, deputy head of the office for the Central Leading Group on Financial and Economic Affairs.

He made the remarks at a meeting on grain and food safety held in Beijing on Friday.

The challenges are water shortages, degrading farmland and rising labor cost, Han said.

China itself suffers from water shortages. There is a conflict between urbanization and agricultural growth. The ratio of agricultural water consumption against the total water consumption will continue to drop, along with urbanization, he said.

Future agricultural policies will highlight water use efficiency to save water, he said.

The farmland quality has been degrading with about 2.9 percent of farmland suffering from medium and serious pollution, according to Han.

Meanwhile, labor cost has been rising. "In the United States, labor cost takes less than 10 percent of the overall cost in agriculture, but the figure is somewhere between 30 to 35 percent in China," he said.

He also highlighted science and technology innovations in achieving sustainable agricultural growth.