Impacts Of Non-farm Employment On Agricultural Prodouction

Since the policy of Reform and Opening-up, the continuous transfer of Chinese agricultural labor force into non-agricultural industries, especially in main grain producing areas, has brought widespread concern about agricultural production and food security, as it sustainably promotes the growth of rural resident income. More scholars, as a result, pay close attention to the influence of rural residents' non-farm employment on agriculture and food production. However, different scholars bring discrepant conclusions due to different perspectives as well as distinct research methods, data resources and data quality.Taking the rural household as an analysis unit and based on rural household of Survey on Henan Rural Residents and Survey on Henan Migrant Worker Monitor, this thesis, from the micro level and in the context of the increasing growth of non-agricultural employment, mostly investigates how the various agricultural output, the productive factor input and the management efficiency have changed, what has happened concerning the food production of rural households, and how their different levels' net income has changed in close relation to the former two questions.Different form the past researches which regard non-farm employment as an exogenous variable, and then employ the instrumental variable to eliminate or slow down the endogenous problem brought from the correlation of non-farm employment and agricultural production, this thesis has already considered both their interaction and fundamentally solves this problem when choosing the form of statistical measurement model. First of all, based on the data of Survey on Henan Rural Residents and Survey on Henan Migrant Worker Monitor, this thesis have constructed a Stochastic Distance Function of Consistent General Leontief input and output in terms of lower production efficiency of rural residents, and has estimated their production technology parameter. Based on these, it has also calculated the joint output elasticity, scale reward index and the non-farm employment's demand elasticity for various production factors, and deeply analyzed the influence of non-farm employment on rural households' various agricultural outputs and the demand for various production factors. Secondly, this thesis has discussed the mechanism of how non-farm employment influences food production by respectively taking non-farm employment, grain planting area and average acre output as the dependant variable to construct simultaneous equations models. Lastly, this thesis has also discussed different types of rural households based on the degree of participating in non-farm employment, the influence of the increased working time on the net income of different levels and its ways of realization.The above research reveals that the non-farm employment in major grain producing areas has been the important channel of rural household income growth, and not yet negatively affected various agricultural outputs, and has contrarily improved the full use of agricultural productive factors, especially the steady development of food production, but it goes against increasing the net income of agriculture and plantation. In addition, it shows that the increase of non-farm employment enables rural households to tend to reduce the long-term investment on agriculture and even break away from it. Specific results are,as follows:First,the non-farm output increase is in favor of various agricultural outputs, especially of food output and management efficiency due to the strongly complementary cost with various agricultural outputs, but it makes farmers reduce the need of land and productive expenses spent on agriculture. Second, the increased time of non-farm employment not only encourages farmers to expand grain planting areas, but it also maintains the steady average food output per acre and enables food production to develop sustainably and steadily. In addition, the expansion of food planting areas offers farmers more non-farm employment time. Three, non-farm employment in major grain production areas is a major way of increasing their income steadily and quickly but is not beneficial to the net income growth of agriculture and plantation. Last, both rural households'productive activities and food production are in the stage of increasing returns to scale, and farmers' food production income is negative. Based on the above research conclusions, this thesis draws several policy implications, offering reference to steadily develop agriculture and food production and consistently increase farmers'income.