Factor Endowments, Wage Growth, and Changing Food Self-Sufficiency: Evidence from Country-Level Panel Data

20 Pages Posted: 9 Mar 2013

See all articles by Keijiro Otsuka

Keijiro Otsuka

National Graduate Institute for Policy Studies (GRIPS)

Yanyan Liu

International Food Policy Research Institute (IFPRI)

Futoshi Yamauchi

A member of the CGIAR Consortium - International Food Policy Research Institute (IFPRI)

Date Written: February 1, 2013

Abstract

Asian countries have witnessed a sharp increase in real wage as a result of rapid economic growth and structural transformation in recent years. Using a country level panel data from 1980 to 2010, this paper examines the effects of real wage increase on Asian agriculture that traditionally used family labor intensively on small farms. The empirical evidence supports our hypothesis that an increase in real wages, along with absorptions of labor into nonagricultural sectors, has been inducing the substitution of labor by machines in agriculture. However, this process is less successful in the countries that are constrained by their small operational land sizes, resulting in lowered land productivity. We also demonstrated that dynamic changes in yield are an important determinant of food self-sufficiency ratio. The above findings imply that in the near future, Asian agriculture can face a challenge in maintaining domestic food production. Given the large size of consumer demands in the region and its increasing trend, the future path of Asian agriculture could be a significant constraint on the global food supply-demand balance.

Keywords: cereal self-sufficient ration, Economic transformation, farm size, machine use, Asia

Suggested Citation

Otsuka, Keijiro and Liu, Yanyan and Yamauchi, Futoshi, Factor Endowments, Wage Growth, and Changing Food Self-Sufficiency: Evidence from Country-Level Panel Data (February 1, 2013). IFPRI Discussion Paper 01246. Available at SSRN: https://ssrn.com/abstract=2228923 or http://dx.doi.org/10.2139/ssrn.2228923

Keijiro Otsuka (Contact Author)

National Graduate Institute for Policy Studies (GRIPS) ( email )

7-22-1 Roppongi,Minato,
Tokyo 106-8677
Japan

Yanyan Liu

International Food Policy Research Institute (IFPRI) ( email )

1201 Eye St, NW,
Washington, DC 20005
United States

Futoshi Yamauchi

A member of the CGIAR Consortium - International Food Policy Research Institute (IFPRI) ( email )

1201 Eye St, NW,
Washington, DC 20005
United States

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
22
Abstract Views
326
PlumX Metrics