Farm Size And Income Of Grain Farmers In China

Since the reform and opening, a great achievement has been made in China's agriculture and rural economy. From 1978 to 2003, annual growth rate of rural household's per capita real net income was 7.06%. This growth rate, however, was slow down in 1997-2003, especially in the major grain-producing areas due to the low profitability from producing grain. As a result, China's food security was undermined because the major grain producing areas, as the main provider of the commodity grain, play a key role in food supply. National strategy, therefore, aims to increase national grain production as well rural household's income. In line with the strategy, a policy environment geared toward this aim has implications on sustainable agricultural development in the major grain-producing areas, in accordance with comparative advantage as determined by the market forces. In the regard of this, the paper is mainly aimed to assess the productivity, income and optimal farming scale of grain farmers in the major grain-producing areas based on a range of different farm size by using econometric models and mathematical programming.The definition of the major grain-producing areas used in this paper is given by National Ministry of Finance, which covers 13 provinces, i.e., Hebei, Inner Mongolia, Liaoning, Jilin, Heilongjiang, Jiangsu, Anhui, Jiangxi, Shandong, Henan, Hubei, Hunan and Sichuan. All topics in this paper are focused on the 13 provinces. Firstly, the importance of China's major grain-producing areas in grain output, grain-sown area, yield per unit area, amount of grain per capita and grain production efficiency, amount of commodity grain, etc., are examined. The evolution of the changes in farm size and income of grain farmers are then traced. Finally, the characteristics and optimal fanning scale of farm size are analyzed in the major producing areas of China, and policy implications are given.The data used in this paper are mainly from a rural household survey conducted in Hebei, Liaoning, Jilin, Heilongjiang, Jiangsu, Anhui, Henan, Shandong, Hubei and Sichuan in the spring of 2003. The survey includes the land management, grain production, income and expenditures of 3000 households in the 10 provinces. Among 3000 households surveyed, 2349 households meet the need of study. Based on the farm size, the 2349 households are divided into five groups: <0.2, 0.2-0.33, 0.33-0.67, 0.67-1.33, ≥1.33 hectares to analyze the productivity and income of grain farmers in different groups. Findings show that smaller farm sizes are generally, though not exclusively, more productive in terms of yield rates. Small farms offer better incomes per hectare, but do not yield better incomes to households. The householders' education correlates with the fanning income. The higher the education is, the more the farming income is.A Cobb-Douglas production function is used to analyze the priority of the factors effecting grain farmers' income. The analysis suggests that the cultivated land is the most important factor, which contributes a lot to the growth of grain farmers' income. The next is material input. There is no remarkable relation between the income of grain farmers and labor numbers. Rural families cultivating larger land holdings are observed to be substantially better off than families with relatively small...