Capital Deepening,the Structure Of Factors Endowment,and Efficiency Of Agricultural Production

Improving agricultural comprehensive productivity is an important approach to promote the all-round development of rural economy and the whole society in China.Capital formation and labor transfer are two "engines" of economic development.The low rate of return on and the high risk of agricultural capital lead to the slow capital accumulation in agriculture and the lack of motivation for social capital inflows.The shortage of capital caused by the siphon effect of rural capital outflows has threatened the viability of agriculture and delayed the process of agricultural modernization.The"major contradictions in agriculture" are on the supply side,the main problems are"the structural imbalance of supply and demand of agricultural products,the irrational allocation of factors,the pressure on resources and the environment and the persistent weakening of farmers' incomes remain outstanding"(2017 Document No.1).The study of "Capital deepening,the structure of factors endowment,and efficiency of agricultural production " aims to explore the inherent logical relationship between capital deepening,the structure of factors endowment,and efficiency of agricultural production,explore the dilemmas faced in the process of capital investment and green development of agriculture,which will provide a solid basis for the policy design of greening agriculture and the possible path choices.Governments and farmer households are two main contributors of agricultural capital accumulation in China.As one of the main contributor of agricultural capital accumulation,farmer households are the main investors in agricultural development.The causes for low capital accumulation are as follows:firstly,it the loss of agricultural credit funds provided by the formal finance institutions in China,the inefficiency of capital formation in agriculture and rural areas,and the "blood drawing-off" by finance institutions in the rural areas continue;secondly,Chinese government still plays an important role in the formation of capital,which should be responsible for insufficient investment in agriculture and structural deviations.The skewed capital deepening among three sectors may be a facilitator for the decline in China's economic growth.Thirdly,household income in operating agriculture is higher than its cash expenditure in terms of cropping,forestry,animal husbandry and fisheries.A special attention is deserved to the difference between expected and real perspectives in the role of wage income from migrant workers,it is supposed to facilitate agricultural development by way of capital inflows;Fourthly,the outflows of agricultural capital through the consumption channels of rural residents have further aggravated the shortage of agricultural capital and restricted the ability of agricultural capital accumulation.The inefficient capital allocation is an important reason for macroeconomic fluctuations.The uncoordinated development of labor market and land capitalization has constrained the capital accumulation of rural farmer households.Although the integration of the rural market with the international and domestic markets has accelerated the commercialization and specialization of the rural economy in China,due to the fact of Chinese farmers were dragged to enter the market,under the pressure of subsistence,the commercialization and specialization of the rural economy did not bring about the complete revolution of the agricultural development mechanism-the complete shift of the farmers into market players.The lack of capital cognition of farmers,and the uncoordinated development of labor market and land capitalization are the major obstacles to the sustainable development of agriculture in China.It is necessary to facilitate the reform of rural land system,cultivate the awareness of farmers' land assets to provide the foundation for improving agricultural labor productivity by the construction of labor market and land market.Agricultural capital deepening in a certain sense is a prerequisite for the development of agricultural economy.The ultra-intensive labor inputs have not result in a proportional increase in output.The change of total factor productivity of China's agriculture mainly comes from the change of output per worker,not from the deepening of capital.Based on the CFPS data,it is shown that there exists increasing returns to scale.As the land size increases,the substitution elasticity of capital and labor declines,and the complementarity of capital and land and labor and capital increases.The complementary features of rising capital-land and labor-capital show that with the expansion of land size,corresponding increase in capital and labor input is an important way to improve the efficiency of agricultural production.By improving the elemental configuration,the technical efficiency could be enhanced.The small size of the farm hinders further improvement of the coordination efficiency of agricultural input factors in China.Together with the rational combination of factors and economies of scale and scope economy,the deepening agricultural capital can improve factor productivity and promote the relocation of the actual production curve.It is necessary to facilitate the reform of rural land system,cultivate the awareness of farmers 'land assets to provide the capital sources of agricultural labor productivity and core competitiveness by the enhancement of land assets returns.Given the limited substitution of labor for farm machinery under the constraints of land size,agricultural sector in China is experiencing labor intensive and capital intensive processes-excessive use of agricultural chemical fertilizers and pesticides,nonpoint pollution arising from over application of fertilizers has been the biggest contributor of environmental degradation,farmers themselves have become the direct victims of agricultural non-point pollution.Due to the exacerbation of capital,the rate of change of natural resources is more positive for the growth retardation of agriculture.This indicates that environmental degradation has become a major obstacle to China's agricultural growth,which has led to a gap between actual agricultural output and potential output.Environmental degradation has dragged further agricultural growthIn sum,China's agricultural development must correctly handle the relationship between agricultural modernization and agricultural greening.The convergence and cooperation of industrial policies,fiscal policies,tax policies,financial policies and technical policies,and the coordination mechanism between government environmental policies and agricultural policies are the decisive factors for the success of sustainable agriculture.