Wage Growth, Landholding, and Mechanization in Chinese Agriculture

43 Pages Posted: 20 Apr 2016

See all articles by Xiaobing Wang

Xiaobing Wang

Chinese Academy of Sciences (CAS)

Futoshi Yamauchi

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

Keijiro Otsuka

National Graduate Institute for Policy Studies (GRIPS)

Jikun Huang

Chinese Academy of Sciences (CAS)

Date Written: December 1, 2014

Abstract

This paper uses farm panel data from China to examine the dynamics of land transactions, machine investments, and the demand for machine services. Recently, China's agriculture has experienced a large expansion of machine rentals and machine services provided by specialized agents, which has contributed to mechanization of agricultural production. The empirical results show that an increase in nonagricultural wage rates leads to expansion of self-cultivated land size. A rise in the proportion of nonagricultural income or the migration rate also increases the size of self-cultivated land. Interestingly, however, relatively educated farm households decrease the size of self-cultivated land, which suggests that relatively less educated farmers tend to specialize in farming. The demand for machine services has also increased if agricultural wage and migration rate increased over time, especially among relatively large farms. The results on crop income support the complementarity between rented-in land and machine services (demanded), which implies that scale economies are arising in Chinese agriculture with mechanization and active land rental markets.

Keywords: Agricultural Economics, Rural Labor Markets, Labor Markets

Suggested Citation

Wang, Xiaobing and Yamauchi, Futoshi and Otsuka, Keijiro and Huang, Jikun, Wage Growth, Landholding, and Mechanization in Chinese Agriculture (December 1, 2014). World Bank Policy Research Working Paper No. 7138, Available at SSRN: https://ssrn.com/abstract=2539327

Xiaobing Wang (Contact Author)

Chinese Academy of Sciences (CAS) ( email )

52 Sanlihe Rd.
Datun Road, Anwai
Beijing, Xicheng District 100864
China

Futoshi Yamauchi

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

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

Keijiro Otsuka

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

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

Jikun Huang

Chinese Academy of Sciences (CAS) ( email )

Center for Chinese Agricultural Policy (CCAP)
No. Jia 11, Datun Road
Anwai, Beijing, 100101
China
+86 10 64889440 (Phone)
+86 10 64856533 (Fax)

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