Mechanization Outsourcing Clusters and Division of Labor in Chinese Agriculture

32 Pages Posted: 10 Mar 2015

See all articles by Xiaobo Zhang

Xiaobo Zhang

International Food Policy Research Institute (IFPRI)

Jin Yang

Department of Agricultural Economics and Management, Zhejiang University

Thomas Reardon

Michigan State University - Department of Agricultural Economics

Date Written: February 13, 2015

Abstract

Most of the poor in the developing countries are smallholder farmers. Improving their productivity is essential for reducing poverty. Despite small landholdings, a high degree of land fragmentation, and rising labor costs, agricultural production in China has steadily increased. If one treats the farm household as the unit of analysis, it would be difficult to explain the conundrum. When seeing agricultural production from the lens of division of labor, the puzzle can be easily solved. In response to rising labor costs, farmers outsource some power-intensive stages of production, such as harvesting, to specialized mechanization service providers, which are often clustered in a few counties and travel throughout the country to harvest crops at very competitive service charges. Through such an arrangement, smallholder farmers can stay viable in agricultural production.

Keywords: agriculture; Lewis turning point; outsource; mechanization

JEL Classification: J31, O12

Suggested Citation

Zhang, Xiaobo and Yang, Jin and Reardon, Thomas A., Mechanization Outsourcing Clusters and Division of Labor in Chinese Agriculture (February 13, 2015). IFPRI Discussion Paper 01415, Available at SSRN: https://ssrn.com/abstract=2567746

Xiaobo Zhang (Contact Author)

International Food Policy Research Institute (IFPRI) ( email )

2033 K Street, NW
Washington, DC 20006
United States
202-862-5677 (Phone)
202-467-4439 (Fax)

Jin Yang

Department of Agricultural Economics and Management, Zhejiang University ( email )

38 Zheda Road
Hangzhou, Zhejiang 310058
China

Thomas A. Reardon

Michigan State University - Department of Agricultural Economics ( email )

East Lansing, MI 48824
United States
517-355-1521 (Phone)
517-432-1800 (Fax)

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