Study Of China's Agricultural Modernization Path

In the course of 30 years'reform and opening up, China's national economy has seen sustained rapid growth, with the overall national strength increasing, people's living standards improved. It is a remarkable achievement beyond all doubt. However, our current well-off society is still low, incomplete, unbalanced society, we still face low agricultural productivity, low income farmers, backward rural areas. Those three rural issues increasingly become the key that restricts the further development of our country. Therefore, the focus and the difficulties of well-off society are in rural areas.In order to promote agriculture and rural development, the 17 Party congress report pointed out the overall outline for the modernization of agriculture with Chinese characteristics. However, in the current historical stage of development, with the certain natural resource endowments, the specific route has yet to be studied and discussed. In the agriculture-related fields, there are many domestic and foreign research results, but some are too broad, and some are only one aspect of the agricultural sector. The real problems agricultural development facing and the specific path to a modern agriculture are yet no consensus. Therefore, analyzing the obstacles and finding the correct path to modern agriculture are undoubtedly of great significance in reality and theory. This article is a try.Except for the introduction, this paper constitutes five chapters. In the first chapter theories about the agricultural modernization were reviewed. The second chapter discusses the process of agricultural modernization, the full text of this chapter, set a clear goal. As an economics paper, this paper focuses difficulties on the modernization of agriculture. Then correctly defining the essence of this economic process is the prerequisite. The third chapter is about the history, achievements and prospects of Chinese agriculture. In this chapter the history of china's agriculture modernization was analyzed from two aspects, labor productivity and farm incomes.In the fourth and fifth chapters the right path to modern agriculture is discussed in theory and practice. The fourth focuses on productivity and the fifth income. As the fact that the productivity of traditional agriculture rises slowly, the unique possible explanation is the lack of scale in traditional agriculture. In section III of the fourth chapter an assumption is made that the returns to scale is not of a continuous function but rather a segmented function. Then the returns to scale would be gained just while the scale was several times of the current one. The transaction cost would be very high in that process, which would limit the scale of agriculture. Then the above assumption was testified by the data. Then some proposals to reduce the transaction cost were given. In the fifth chapter the analysis about the relation between the agricultural productivity and the income of farmers shows that the increasing of output would not be bound to lead to the increasing of income. Per capita net income of farmers depends just on the number of persons engaging in agriculture. The efficiency of the labor market was pulled down by two factors, institutional obstacles and psychological costs. So the efficiency of labor market is always lower than the potential one. In the third section, some proposals to promote the transferring of Chinese agricultural labor were given on the basis of the practices of the developed countries.It would be exciting if the perspectives of this paper in three areas which may be little innovations can be accepted. First, put forward that the essence of agricultural modernization in economy is improving in agricultural productivity and farmers' income both. It will do good fro avoiding biased understanding about agricultural modernization which could lead to wrong conclusions. Second, overthrow the view that the lack of science and technology is the key reason that obstacles the developing of traditional agriculture, and prove that the lack of scale is the right one. The data of Chinese agriculture proves that the returns from the scale expansion are not continuous, but piecewise and the high transaction costs will prevent the traditional agriculture form moderate scale. Third, put forward that the income of farmers is determined by the proportion of the number of farmers in the whole nation, but not the labor productivity in agriculture. The unique path to raising the income of farmers is to encourage the transition of labors in agriculture by erasing the institutional obstacles and offsetting the psychological costs.