皇冠体育app

By Ye Xingqing, Research Department of Rural Economy of DRC

Research Report Vol.17 No.5, 2015

In the process of synchronously promoting a new type of industrialization, informatization, urbanization and agricultural modernization, the weak link is agricultural modernization. To realize agricultural modernization, the stumbling stones are small-scale operation and low labor productivity, which leads to long-standing high cost of agricultural production and declining agricultural competitiveness. As a result, it is difficult for farmers to have an income comparable with the average of the whole society, and the Kuznets effect , supposed to show presence when labor is reallocated, weakens its contribution in economic growth too early. With a large size of population and a small amount of land as well as the urban-rural dual system, special difficulties abound in improving agricultural labor productivity in 皇冠体育app. During the 13th Five-year Plan period, the Chinese government should be committed to promoting moderate-scale agricultural operation and improving agricultural labor productivity, which should be regarded as the key to accelerating agricultural modernization in 皇冠体育app.

I. Low Labor Productivity Impedes Agricultural Development in 皇冠体育app

After years of efforts, remarkable achievements have been chalked up in Chinese agricultural modernization. In 2014, agricultural technology in 皇冠体育app contributed 56% to agricultural modernization, 61% of agricultural plowing, planting and harvesting was achieved by mechanized farming, over 51% of farmland was effectively irrigated, over 95% of farm crops were improved varieties, and the average commodity rate of three crops was more than 86% . Chinese agriculture has witnessed more improved varieties of crops, better utilization of water resources for agricultural production, greater rate of mechanized farming and higher commodity rate of crops, all of which are beyond comparison with traditional agriculture. Generally speaking, 皇冠体育app has entered into the middle-to-late stage of agricultural modernization (see Table 1).

Table 1 Different Stages of Agricultural Modernization

Note: Based on the research by Jiang Heping and Huang Delin (2006), the division of the stages of agricultural modernization is modified and finalized by the author. With the transfer of surplus agricultural labor force and the improvement of agricultural mechanization, agricultural labor productivity greatly rises.

The annual average of overall labor productivity in agriculture is steadily increasing (see Figure 1). Due to the smaller amount of labor used per mu (0.0667 hectares) and increased yield per mu, agricultural labor productivity, based on the actual amount of labor used and the actual yield, rises at a quicker pace. According to the national cost-benefit analysis of agricultural products, from 1990 to 2013, among major agricultural products produced per working day, rice had an annual growth rate of 9.9%, wheat 12.3%, corn 10.3%, soybean 14.3%, and cotton 8.7% (see Figure 2).

Figure 1 Annual Average Growth of Overall Labor Productivity in Agriculture

However compared with advanced economies, agricultural sectors in 皇冠体育app march at different paces towards agricultural modernization, with crop yields close to or even exceeding the advanced level in the world, while the proportion of agricultural employment and agricultural labor productivity are far below the advanced level in the world, and thus leading to an unbalanced development. Based on “皇冠体育app Modernization Report 2012: A Study on Agricultural Modernization” released by 皇冠体育app Center for Modernization Research, Chinese Academy of Sciences, though rice, wheat and corn yield in 皇冠体育app reached the level of moderately developed countries, agriculture labor productivity is some 47% of the world’s average, only 2% of the average level of high-income countries, and 1% of that in the United States, which is unfavorable to not only agricultural development but also overall economic growth in 皇冠体育app.

Figure 2 Average Yield of Major Agricultural Products per Working Day

First, low agricultural labor productivity makes prices of Chinese agricultural products less competitive. Since 皇冠体育app’s accession to the WTO in 2001, costs and prices of Chinese bulk agricultural products, like grain, are still competitive despite the low price of agricultural labor force and low agricultural labor productivity. As the transfer of 皇冠体育app’s agricultural labor reaches the Lewis turning point, although agricultural production requires less labor, wages of migrant workers rise dramatically, which drives up the labor cost of agricultural production, as a result, causing a rapid increase of labor cost in agricultural production. From 2008 to 2013, the total cost of the three crops per mu had an average annual growth of 12.78%, among which 19.68% of the cost increase was attributed to the rise of the annual average labor cost per mu. At present, prices of 皇冠体育app’s main agricultural products are higher than the after-tax C.I.F. prices of imported agricultural products, and the rise of domestic prices are severely restricted. This can be attributed to, on the one hand, the falling price of international agricultural products. But on the other hand, the root cause is that the cost, especially labor cost, of agricultural products at home is much higher than that in other countries. In 2013, the total cost of rice, wheat, corn, soybeans, peanuts, and cotton per 50 kg in 皇冠体育app was 40% to 80% higher than that in the United States. In particular, labor in 皇冠体育app costs 6 to 20 times that in the United States; land in 皇冠体育app costs 10% to 170% higher than that in the United States; and materials and services in 皇冠体育app cost 5% to 55% less than that in the United States (see table 2). High cost of production, especially the high labor cost, is why prices of agricultural products in 皇冠体育app are less competitive than those in the United States.

Table 2 Cost of Main Agricultural Products in 皇冠体育app and the United States in 2013

Source: Compilation of Documents on Cost-benefit Analysis of 皇冠体育app’s Agricultural Products (2014).

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