A Study On The Dairy Industry Total Factor Productivity Of China

Since the reform and opening up of China, the dairy industry developing steadily, has become the third largest industry in food manufacturing industry. The production of dairy products increased fast, with an average annual growth rate of21%during1979to2009. However, with the fast growth of dairy industry, the problems during development is increasingly outstanding, such as the characteristics of obviously extensive growth and unbalanced regional development, surplus production and low technical efficiency of dairy enterprise, single structure and imperfect quality safety guarantee system of dairy products and so on, China’s dairy industry has enter the key transitional period from quantity increase to quality benefits. On this background, this dissertation takes the total factor productivity of dairy industry in China as the research object, based on input and output data, uses Data Envelopment Analysis and Stochastic Frontier Analysis method, tried to analyze the growth pattern of dairy industry and estimates the total factor productivity growth rate, and then, decompose total factor productivity growth rate into technological change and technical efficiency change to explain the driving forces of TFP growth rate, later, with the perspective of three regions, milk production area and provincial, investigates the spatial disparity and convergence of China’s dairy industry total factor productivity growth rate. The conclusions are as follows.Firstly, the major feature of China’s dairy industry is extensive growth, and the main driving force is inputs, in contrast, total factor productivity contribution become less significant. Since2000, China’s dairy industry growth rapidly, with an average annual growth rate of25.41%, but dairy industry growth depends on inputs promotion from the overall perspective. During the sample period, the contribution of inputs to output reached65.62%, present a kind of low extensive growth characteristics.Secondly, dairy industry total factor productivity shows strong increase tendency, but regional growth is unbalanced. Dairy industry total factor productivity keeps an average annual growth rate of8.5%during observational year (1998-2009), and becomes anotner driving force to the output of dairy products. In different regions, milk production area and five main production areas, the differences of dairy industry total factor productivity growth rate is significantly, the eastern region posses abundant resources and good economic condition, so the growth rate is more quickly than central and eastern regions, in addition, the superior location, good market demand and high levels of per capita consumption is the another factors to the growth of dairy industry total factor productivity; although the dairy industry foundation in not-main milk production areas are weak, technology introduction and advanced equipment purchase make these areas keep an higher total factor productivity growth rate than main milk production areas; big city region, with an average annual growth rate of15%, becomes the fastest in five main production areas, and leading the dairy industry production frontier.Thirdly, the promotional driving force of China’s dairy industry total factor productivity growth rate is technological change, but the technical efficiency change plays limited role, the growth rate of China’s dairy products industry total factor productivity relys on the growth of technological change as well as technical efficiency change. The average growth rate of China’s dairy industry technological change is10.4%during1998to2009, while the annual growth rate of technical efficiency change is-1.7%, the changing range of technological change is larger than technical efficiency change, therefore the growth pattern of China’s dairy industry total factor productivity relays technological change driving. Take provincial perspective, we found18provinces relays on technological change in China, these provinces includes Hebei, Shanxi, Inner Mongolia, Liaoning, Jilin, Heilongjiang, Zhejiang, Jiangxi, Shandong, Hubei, Guangxi, Chongqing, Sichuan, Guizhou, Gansu, Qinghai, Tibet and Xinjiang; while Beijing, Tianjin, Jiangsu, Anhui, Fujian, Henan, Hunan, Guangdong and Yunnan relays on the growth of technological change as well as technical efficiency change; Shanghai and Shaanxi relays on the growth of technical efficiency change; Ningxia TFP negative growth due to the downturn of technical efficiency.Fourthly, the a convergence of China’s dairy industry total factor productivity is not obvious, but absolutely β convergence and conditional β convergence is clear, beside, the disparity of provincial TFP growth rate narrowed with time goes on. The result of σ test shows that, total factor productivity index convergence trend is not clear during2000to2009, but when divided into three parts, dairy industry total factor productivity are showing signs of convergence in central and eastern regions, especially after2006, but eastern region’s convergence characteristics is not obvious; the absolutely β convergence and conditional β convergence trend is obvious in national, central and eastern regions, the spatial disparity of total factor productivity in provincial regions narrowing fast, national, central and eastern regions approach the same steady, while provincial regions approach steady respectively; the eastern region has no significant absolutely β convergence, but conditional β convergence, shows that eastern region approach own steady. The disparity of provincial TFP growth rate narrowing with time goes.