Historical Transformation of China's Agriculture: Productivity Changes and Other Key Features

• DOI: http://doi.org/10.1111/cwe.12228
• Author: Guang Shi,Ruimin Wang,Shouying Liu
• Published date: 01 January 2018
• Date: 01 January 2018

©2018 Institute of World Economics and Politics, Chinese Academy of Social Sciences

China & World Economy / 42–65, Vol. 26, No. 1, 2018

42

*Shouying Liu, Professor, School of Economics, Renmin University, China. Email: liusy18@126.com;

Ruimin Wang (corresponding author), Research Associate, Institute of Economic Research, Chinese Academy

of Macroeconomic Research, China. Email: cauwrm@foxmail.com; Guang Shi, Associate Research Fellow,

Development Research Center of the State Council, China. Email: shiguangpku@qq.com. The authors

acknowledge the nancial support of the Foundation of Ministry of Education of China (No. 16JZD024).

Historical Transformation of China’s Agriculture:

Productivity Changes and Other Key Features

Shouying Liu, Ruimin Wang, Guang Shi*

Abstract

According to an analysis of sampled data from the National Bureau of Statistics

for 70,000 peasant households, agricultural labor productivity has been increasing

at a faster rate than land productivity since 2003. Labor productivity has, in fact,

experienced long-term stagnation. The data also reveals the heterogenization of small

farmers, farm machinery replacing manual labor as an agricultural input, the expansion

of the scale of land management, the development of the rural land leasing market and

the diversification of the agricultural management entities. Review of the historical

transformation of agriculture helps to recognize the declining importance of agricultural

land, the direction of agricultural technological changes, the path and the disposition of

the changes to the agricultural system, and the adjustment of China’s rural policies.

Key words: agricultural development model, changes in agricultural productivity,

historical transformation of agriculture

JEL codes: N55, O13, Q15

I. Introduction

The increasingly tense relationship between man and land is the main factor aecting

China’s economic transformation. The industrial and commercial sectors have not

developed sufficiently to function as a pipeline in absorbing the redundant rural

workforce. A large amount of labor has been stranded in the agricultural sector. With

the depletion of wasteland and the constant decline of the ratio between man and land,

increasing land use frequency (Boserup, 2015) and land yield have become the basis

of the traditional model of agricultural development (Chayanov, 1996). According

©2018 Institute of World Economics and Politics, Chinese Academy of Social Sciences

Historical Transformation of China’s Agriculture 43

to the empirical evidence provided by Perkins (1984), at least half of the growth in

grain output over 6 centuries (1368–1968) in China was attributed to the expansion

of cultivated land, while the other half was due to increases in yield per unit area. The

continuously increased demographic pressure on the land has led to the emergence

of Chinese agriculture with “growth but without development” (Huang, 1990). With

agricultural labor productivity suffering stagnation or even decreasing over the past

few thousand years, China has relied on eective division of labor in agriculture and

increasing labor input so that growth in total agricultural output can be achieved.

Since the founding of the People’s Republic of China, the Communist Party has

made efforts to promote the transformation from ancient rural society towards the

process of industrialization. Based on the strategy of first developing heavy industry,

to meet the requirement of accumulating capital, it is necessary to artificially lower

the prices of certain factors, such as agricultural products, to secure their supply (Lin

et al., 1999). The monopolized purchase system (tonggou tongxiao) for agricultural

products, the people’s commune system for production by collective organizations and

the household registration system all impacted the national development strategy.1 In the

context of institutional ineciencies and the continuing deterioration of the land–man

ratio, grain production growth was mainly supported by increasing land productivity.

First, chemical fertilizers and pesticides were used intensively to increase agricultural

yield. Second, multiple cropping was intensified to improve land use efficiency.

Between 1952 and 1978, the total grain output grew by approximately 86 percent,

with an average annual growth rate of approximately 2.5 percent. The increase in

total grain output mainly resulted from the growth in grain yield per unit area, which

grew b y approximatel y 90 percen t, with an average annual growth of 2.8 percent. The

increase in grain yield per unit area resulted in China’s grain production growing faster

than its population growth rate (i.e. 1.9 percent).

Unfortunately, farmers have been excluded from the state-led process of

industrialization and urbanization. From 1952 to 1978, the land–man ratio in rural

areas dropped from 3.23 mu per capita to 1.89 mu. The relationship between man

and land in agriculture has further deteriorated and agricultural labor productivity has

stagnated. The real output per capita of the entire economy increased by 82 percent

and labor productivity improved by 58 percent, while there was an average decline

of labor productivity in the agricultural sector by 0.2 percent. The fall in the total

factor productivity was even more serious. An inappropriate development strategy,

1The monopolized purchase system means that the agricultural products have to be sold to the government;

then the government distributes the products according to certain criterion.