The Effects On Farmer’s Income In Transition China: A Perspective From Agricultural Structural Adjustments

The farmer is the heart of the sannong issues, while farmer’s income is the core of the farmerissue in China. It is regard that farmers’ income growth and income inequality are twoindispensable parts in analyzing farmer’s income issue. Agricultural adjustment plays thefundamental roles in solving sannong issues in China. How to balance farmers’ incomegrowth and income inequality is a matter of reality in policy-making on agriculturaladjustment. Starting from a perspective of agricultural adjustment, the paper discusses themechanism between agricultural adjustment (AD) and farmer’s income, explore the incomeeffects from AD based on different aspects, including farmer household’s productive structure,resource allocation structure as well as operational structure. Hence after, policy implicationsare discussed. The findings are as follows:1. With the help of famer’s income growth panel data model, it discusses the impacts ofproductive structure on farmer’s income growth during the new stage of agriculturaldevelopment in China. By utilizing Shapley decomposition method of income inequalityindices (incl. Gini and Theil), it explores the impacts of productive structure on farmer’sincome inequality based on the regression model. Main findings are:(1) productive structuralchange has significant impacts on farmer’s income;(2) Increasing the share of grain plantingdecreases farmers’ income while increases their income inequality;(3) Increasing thenon-farming working opportunity improve farmers’ income and widens their incomeinequality;(3) Compared with productive asset investment, the land operating scaleenlargement has stronger income growth effects, both are income inequality-increased.2. Based on the Gini decomposition methods, it exploits the impacts of resource allocationstructure on farmers’ income, testifies the Kuznets’s Inverted-U hypothesis on farmers’inequality changes in China. Main findings are:(1) the resource allocation structure change increases the income inequality; Non-farming allocation contributes more share to net incomeand increases income inequality; Household operating allocation contributes less share to netincome but is income inequality-decreased;(2) Resource allocation structure change accountsfor major parts of the increase of income inequality；(3) The Kuznets Inverted-UHypothesis is testified by the contribution of family business income to the net income Gini.3. Based on the Theil decomposition methods, it illustrates the impacts of operational structureon farmers’ income. Main findings are:(1) The difference of operational structure betweenfull-time farmer and part-time farmer is inequality-increased;(2) For the full-time farmer, thedifferences of landing holding scale have significant impact on income growth while lessimpact on income inequality;(3) For the part-time farmer, the income inequality is decreasing.The income inequality comes not mainly from main family businesses structures change,while regional disparity, marketazination reform as well as rural development policy mightwell be the reasons.