Agri-productive Investment Behavior At Rural Household Level

Since the intrOduction of rural household resPOnsibility system in late l970s, China'srural househoIds have taken up a principaI role in agricultUraI economy under thisinshtUtional rmgement. And with the deePening of refOrm process in nationaladIninistraive, fiscal and financial systems, the pattem of investInent in agricultUralsector has shifted, as characterized by a diminishing role of the collective organiZaionsand still by the downtUm POrtion of govenunent's investrnent in agricultUral caPitalconsmiction throughout the l980s. By contraSt, individual rural hOuseholds claAn anever-strengthening part in aghcultUral investInent. However, as OPPOsed to the relativeincrease of fanners' role in total agricultUral investInent, it has been widely observedthat since l995, the volume of agriculturyl productive investrient by onl househOldshas been wiinessing a decline. Given itS crucial role in the sustainable development inagriculthe, it is worthwhile to investigate the agricultural investInent behavior at nnalhousehold level to Provide emPtrical evidence fOr decision-Inakers in setting relevamagricultUral polices.To M this goal, we conduct a case stUdy in Jiangsu province with a samPlecomposition of 6 county X 5 townshiPs Per county X 1 village per township X l0households Per village = 300 households. The saInPle Period covers l993 to 1999. Datacollected includes basic hOusehold chacteristic infOrmation on boers' agriculatinvestm6nt behaior and relevant information at the village levels. Based on this paneldata, an econometric model was develoPed to caPthe the twact of householdcharacteristics, price factOrs and village infhathectUre availability on haners'aghcultUral produchve investment behavior. Estimation was conducted with twoaPPrOaches: Heclcman tWo stage least square model and Tobit model, respectively. Andboth models PerfOnn well According to our resultS, the PropOrtion of rural householdsconducting agriculbol productive investInent is not high; and the availability ofinfOnnal credit, the land scale under OPeration, the stock of agricultUral productive assets,the proportion of boly labor engaged in non-bo achvities, tUition exPenditUre, bomachine service fees as wel1 as the availability of conununity services such as telephoneand health clinic could be identified as major determinants of boers' aghcultUralinvestheent behavior.The resultS of this empirical stUdy cany very important policy imPlications. Suchfindings can assist policy makers set out sound relevant aghculbol policies conduciveto facilitating boers' agricultUral investrnent behavior. For the sake of sustainabledevelopment in agricultUre, the governments at all levels are highly suggested to workunder the spirit of taking the local sitUation into full consideration in relevant policyformation. In general, as for such economically developed areas as Jiangsu province.industrial adjustInent is one of the major policy basket options fOr the govenunent tofacilitate rural households' agricultUral productive investment. In specific, rules andregUlations premise are needed to encourage the transfer of land use rights amongboers for the scale promise of agricultUra1 production and investInent as well as labormobility. What's more, better credit service provision is badly needed in ruralhouseholds' agh-productive investrnent. The last but not the least, more efforts are to beundertaken to improve the infrasmictUre, especially telecommunication and health carefacilities at rural community level.