the historical transformation of china’s agriculture ... · changes and features of the...

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The Historical Transformation of China’s Agriculture:

Productivity Changes and Other Key Features

Liu Shouying, Wang Ruimin, Shi Guang, Shao Ting1

Abstract

With the transition from rural China to the urban-rural China, the agriculture in China

has experienced the millennium transformation. According to the analysis of sampled

data from the National Bureau of Statistics conducted on 70,000 peasant households,

agricultural labour productivity, which has been experiencing a long-term stagnation

or even a decline, has been eventually increasing at a faster rate than land productivity

after 2003. It also reveals the heterogenization of small farmers, the transformation of

agricultural inputs from an excessive manual labour to a gradual growth in farm

machinery, the expansion of scale of land management, the development of the rural

land leasing market and the diversification of the agricultural management entities.

Review of the historical transformation of agriculture helps to recognize the declining

importance of agricultural land, the direction of the agricultural technological change,

the path and the disposition of the agricultural system change and the adjustment of

China’ rural policies.

Key words: agricultural development model, changes in agricultural productivity,

historical transformation of agriculture,

JEL codes: N55,O13,Q15

I. The Issue

For the long traditional rural society in China, the increasingly tense relationship

between man and land is the main factor affecting peasants’ livelihood and economic

transformation. With the rapid growth of the population, the slow development of the

industrial and commercial sectors can hardly function as a pipeline to absorb the

redundant rural workforce. A large amount of labour has been stranded for a long time

in the agricultural sector. With the potential depletion of land reclamation and the

constant decline of the ratio between man and land, the improvement in the land use

frequency (Boserup, 2015) and land yield has become the basis of the traditional

model of agricultural development (Chayanov, 19962). According to the empirical

evidence provided by Perkins (1984), at least half of the grain output growth over six

centuries (1368-1968) in China is attributed to the expansion of cultivated land, while

the other half is due to the increase of yield per unit area. The continuously increased

demographic pressure on the land has led to the emergence of Chinese agriculture

with “growth but without development” (Huang, Philip C., 1992). In circumstances

1 Liu Shouying, Professor, School of Economics, Renmin Universitiy of China, Email:[email protected];Wang

Ruimin, Research Associate, Institute of Economic Research, Chinese Academy of Macroeconomic

Research,Email:[email protected];Shiguang, Associate Research Fellow, Development Research Center of

the State Council,Email:[email protected];Shaoting, Associate Research Fellow, Development Research

Center of the State Council,Email:[email protected]. The authors acknowledge the financial support of the

Foundation of Ministry of Education of the People’s Republic of China (Grant No.16JZD024).

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where agricultural labour productivity suffers stagnation or even decrease, we have no

choice but to rely on a relatively effective division of labour in agriculture, to increase

more intensive labour input so that the growth of total agricultural output can be

achieved.

Since the founding of P.R. China, the Communist Party has marched on this

ancient rural society towards the process of industrialization. Based on the strategy of

prior development of the heavy industry, to comply with the capital accumulation

demand, it is necessary to artificially lower the prices of certain factors such as

agricultural products to secure its supply (Lin et al., 1999). The monopolized purchase

system for agricultural products, the people’s commune system for the production of

collective organizations and the household registration system of farmers trapped in

the collective land all worked as a systematic institutional structure towards the

national development strategy. In the context of the institutional inefficiencies and the

continuing deterioration of the land-man ratio, grain production growth was mainly

supported by increasing land productivity. Firstly, intensively make use of chemical

fertilizers and pesticides to increase the agricultural yield. Secondly, increase the

multiple cropping index to improve land use efficiency. Between 1952 and 1978, the

total grain output grew for about 86 percent, with an average annual growth rate of

approximately 2.5 percent. The increase in grain yield mainly benefited from the

growth in grain yield per unit area, which was around 90 percent, with an average

annual growth of 2.8percent. The increase in grain yield per unit area made China’s

grain production grow faster than population growth rate (1.9 percent).

Unfortunately, the state-led transition has excluded farmers from the process of

industrialization and urbanization. From 1952 to 1978, the land-man ratio in rural

areas has dropped from 3.23 mu per capita to 1.89 mu3. The relationship between man

and land in agriculture has further deteriorated and the agricultural labour productivity

has fallen into stagnation. The real output per capita of the entire economy increased

by 82 percent, the labour productivity improved by 58 percent, while an average

decline of 0.2 percent showed in agricultural sector. The fall in the total factor

productivity was even more serious. The incorrect development strategy, the

inefficient agricultural system, and the tight attachment of farmers to the land have led

to the transformation of agricultural China lagging behind the overall economic

transformation.

In the last century from late 1970s to mid 1990s, rural China has experienced a

huge institutional and structural change. Firstly, the implementation of the household

contract responsibility system greatly stimulated farmers’ enthusiasm and promoted

the growth of agriculture. Between 1979 and 1984, the agricultural growth rate in

China reached 7 percent. The rural reform generated a large amount of recessive

surplus labour force. At the same time, the township and village enterprises set up in

the collective land attracted a great deal of the surplus rural workforce. From 1985 to

1995, the township and village enterprises absorbed nearly 100 million of the rural

labour force4. Based on the rural industrialization, the division of labour within the

countryside has been brought into being. But farmers didn’t leave the village while

they left the land, the rural transformation in China has not been thoroughly started.

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Since the end of last century, with the impact of high-speed industrialization and

urbanization tide, Chinese peasants were dragged into the torrent of trans-regional

flow. The door between the urban and the rural was open. A large amount of rural

population left their homelands and flooded into the cities. The annual migrant

population from rural to urban areas was more than 15 million people (Tao and Wang,

2015). China suffered a major transformation from “rural China” to “urban-rural

China” (Zhou, 2014). Under the pattern of a urban-rural China where “half are in

cities and the other half are in rural areas,” the traditional model of agricultural

development experienced a historical change. The relative price of agricultural factors

changed dramatically. Chinese farmers, who had relied on high labour inputs to raise

land yields per unit, begun to change their inputs structure, by significantly reducing

the labour input and increasing machinery and capital investment in agricultural

production. The agricultural development mode underwent historical changes from a

traditional model of intensive labour inputs to improve land productivity to a modern

agricultural development model mainly based on labour productivity.

Based on sampled data collected from 70,000 peasant households by National

Bureau of Statistics (NBS), this paper will analyse the key features of the agricultural

transformation in China under the pattern of “urban-rural China”. The paper primarily

focused on the changes of agricultural productivity from land productivity to labour

productivity. Among the key features of historical transformation of agriculture, we

will concentrate on the peasant household differentiation, agricultural inputs

replacement and changes in the farm size and farmland lease market. In conclusion,

we will give the policy implications of the agricultural transformation.

II. Changes of Agricultural Productivity

The transformation of agricultural China can be measured by many indicators such as

the agricultural GDP, the amount of agricultural labour absorption, etc. But changes in

labour productivity still symbolizes the transition from traditional agriculture to

modern agriculture. It is the change in agricultural labour productivity which reflects

the influence of relative price changes of agricultural productive factors and indicates

the dividing line between different agricultural development models.

1. Productivity Based on Macro Agricultural Data

From the macro agricultural data released by NBS of China, we can intuitively

see that after 2000 the growth rate of agricultural labour productivity in China has

been significantly higher than that of land productivity (see Figure 1 and 2). The most

obvious change is that the growth of labour and land productivity began to diverge in

2003. Since then, the increase of agricultural labour productivity has approximately

stayed in a range between 5 percent and 10 percent, and the growth rate of land output

per unit has maintained below 5 percent.

From a single-factor productivity perspective, the agricultural labour productivity

in China increased from 1,124kg/capita to 2,093kg/capita between 2000 and 2012,

with an average annual growth rate of 5.46 percent. The agricultural output per capita

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increased from 3,849RMB/capita to 18,213RMB/capita with an average annual

growth rate as high as 14.11 percent. Since the agricultural output per capita did not

exclude the price factor, its growth rate is higher than that of the labour productivity.

During the same period, grain yield per unit area increased from 317kg/mu to

388kg/mu, with an average annual growth rate of only 1.73 percent.

Figure 1. Changes in Agricultural Labour Productivity and Grain Yield per Unit Area

Data Source: National Bureau of Statistics of China.

Figure 2. Changes in the Growth Rate of Agricultural Labour Productivity and Grain

Yield per Unit Area

Data Source: National Bureau of Statistics of China.

2. Changes of Agricultural Productivity Based on Sampled Data Collected from

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70,000 Peasant Households

Although macro statistical data can clearly demonstrate the changes of driving

force in agricultural development, there are still some deficiencies. First, the

agricultural labour input statistics have errors. A substantial proportion of peasant

households are not only engaged in agricultural activities, but also work in urban

areas or take agricultural production as part-time job. Therefore, the actual

agricultural labour input cannot be accurately demonstrated by macro statistical data.

Second, macro data is the aggregate data based on the whole country and cannot be

used to analyse the peasant households’ features of different operation scales, Besides,

the macro data can hardly demonstrate the impact of changes in agricultural scale

operation and the diversification of management entities. Third, macro data cannot

distinguish the agricultural production efficiency of different types of peasant

households, such as pure peasant households, part-time peasant households and

non-peasant households.

What this paper adopts is the micro survey panel data on rural households

released by NBS, covering 70,000 agricultural households across the country with a

time span between 2003 and 2012, among which the following six years are

specifically focused: 2003, 2004, 2005, 2007, 2009 and 2012. The time span

coincides with our intuitive agricultural transition period in China, which provides a

rare opportunity to analyse the historical transformation of Chinese agriculture. At the

same time, sampling of agricultural household survey data effectively solves the

problems mentioned above in macro statistics, and helps us to better understand the

changes and features of the agricultural productivity in China.

(1) Labour Productivity. Labour productivity is defined as the agricultural product

income provided by the agricultural labour input per month. The unit is expressed in

RMB/month. The agricultural labour productivity can be calculated using the total

agricultural output divided agricultural labour input of the households. The results of

Table 1 show that the agricultural labour productivity for the households in China

increased from 381RMB/month in 2003 to 1,671RMB/month in 2012, an increase of

more than 3 times, with an average annual growth rate of about 18 percent.

Table 1. The Changes of Agricultural Labor Productivity

Year Mean（Unit: RMB/Month） Std. Dev. Freq.

2003 381.40 483.36 63035

2004 512.57 630.27 62400

2005 583.56 721.48 62199

2007 753.17 981.16 61647

2009 925.84 1438.22 60740

2012 1671.60 3006.80 61190

Total 800.82 1536.86 371211

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Data Source: National Bureau of Statistics of China

Figure 3 and Figure 4 depict the distribution of the agricultural labour

productivity. Overall, the distribution of the agricultural labour productivity shows a

long-tail shape, mainly centred at the low level of 1,000RMB/month. The agricultural

labour productivity of a few peasant households reached over 2,000RMB/month. As

time goes on, the distribution of the agricultural labour productivity becomes more

and more gentle. We can see that the peak of distribution keeps moving right, and

most households’ productivity concentrates on less than 500RMB/month in 2003, but

have turned to mildly distribute within 0RMB/month to 2,000RMB/month in 2012.

This indicates that: 1) The overall agricultural labour productivity has improved

remarkably. 2) The gap of labour productivity among peasant households is

broadening largely.

Figure 3. Distribution of Agricultural Labor Productivity


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Figure 4. The Changes of the Distribution of Labor Productivity, 2003-2012


(2) Land Productivity. Land productivity is defined as the agricultural product income

provided by the unit sown acreage. Since 2003, the land productivity in China has

been improving, though not as faster as the labor productivity. It has increased from

841RMB/mu in 2003 to 2,942RMB/mu in 2012 with an average annual growth rate of

nearly 15 percent.

Table 2. Land Productivity (RMB/mu)

Year Mean Std. Dev. Freq.

2003 841.01 10853.19 63361

2004 1377.00 36780.57 63004

2005 1189.04 12846.61 62227

2007 1352.35 12828.60 61576

2009 1884.16 34707.80 61071

2012 2942.61 39694.72 61106

Total 1590.42 27574.58 372345


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Unlike labour productivity, the distribution of land productivity is relatively

smooth, similar to that of a normal distribution. The average value is 1,590 RMB/mu

while the median is 640 RMB/mu. As time goes on, the peak of land productivity

distribution moves smoothly towards the right side and the peak density is

continuously falling down. This indicates that: 1) The overall land productivity has

been improved; 2) The gap of land productivity among peasant households is

widening.

Figure 5. Overall Distribution of Land Productivity


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Figure 6. Distribution of Land Productivity, 2003-2012


In general, agricultural productivity has been remarkably improved and its growth

rate is higher than land productivity from 2003 to 2012. It means that the agriculture

in China is no longer only depending on the increase of factor input to improve land

output, and that it is stepping into the development path of improving labour

productivity. The main reason leading to this huge change is that rapid

industrialization and urbanization has absorbed a large amount of rural workforce, and

the intense relationship between man and land has been relieved since abundant rural

labour force is able to seek employment opportunities across areas. The endowment

structure of the agricultural production factors has changed, giving rise to the

historical transformation of the agriculture. The new development mode driven by

agricultural labour productivity in China has just arrived.

III. Key Features of the Agricultural Historical Transformation

1. Differentiation of Peasant Households

What we should pay most attention to about agricultural transformation are the

changes that peasant households have experienced. In the traditional rural society,

farmers have been considered basically homogeneous. The rural policy since the

reform and opening-up also confirmed this fact. Peasants in China have experienced

the change from community members of the collectivization to small farmers under

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the land contract system, and subsequently the baptism of rural industrialization and

the trans-regional large-scale rural labours flow into cities (Li and Gao, 2013).5 The

traditional peasants in China who “make agriculture as their main means of

livelihood” as identified by Fei (1992) no longer exist. They have been largely

differentiated by their differences in degree and method of being involved in

non-agricultural activities.

(1) Stylized Facts of Peasant Household Differentiation. Since 2003, the process of

industrialization and urbanization in China has been accelerating, and the size of rural

migrant population continues to expand. Non-agricultural income has become the

main source of income for most peasants and their time is mainly dedicated to

non-agricultural economic activities. Differentiation among peasants is becoming

more and more profound. According to the degree of participation in non-agricultural

activities, peasant households can be divided into pure peasant households,

non-peasant households and part-time peasant households, which are further divided

into type I part-time household and type II part-time households. These types of

peasant households showed obvious diversity among different areas.

First, the differentiation among peasant households is becoming deeper from

2003 to 2012. During this period, the proportion of non-peasant household is

increasing. Part-time peasant households have become the major part of peasant

households, while the proportion of pure peasant household remains unchanged. The

proportion of type I part-time household2 and type II part-time households in 2012

was 30.07 percent and 35.72 percent respectively, which account for 65.79 percent of

the total. Pure peasant household and non-peasant household occupied 18.28 percent

and 15.93 percent respectively. From 2003 to 2012, the percentage of pure peasant

household and type I part-time household has decreased by 2.5 percent and 12.39

percent separately, while that of type II part-time households and non-peasant

household has increased by 4.52 percent and 10.36 percent.

2 Type I part-time households are those who mainly depend on agricultural

income,and type II part-time households are those who mainly depend on

non-agricultural income.

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Figure 7. Differentiation of National Peasant Households, 2003-2012


Second, the differentiation degree of peasant households among different regions

is different. In 2012, the proportion of non-agricultural peasant households in the

eastern, central and western regions accounted for 30.4 percent, 7.12 percent and 6.08

percent respectively. Between 2003 and 2012, the proportions of the non-agricultural

peasant households in the eastern, central and western regions have increased by 17.4

percent, 5.39 percent and 4.86 percent separately.

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Figure 8. Differentiation of Peasant Households in the Eastern Region, 2003-2012


The proportion of type I part-time household in the western region is the highest,

followed by that in the central region and then in the eastern region. In 2012, the

proportions of type I part-time household in the eastern, central and western regions

were 19.17 percent, 34.2 percent and 40.29 percent separately. However, there is only

small difference among the proportions of type II part-time households in each region.

In terms of trend evolution, from 2003 to 2012, the proportion of Type II part-time

households in the eastern region decreased by 4.95 percent and in the central and

western regions increased by 8.56 percent and 11.09 percent respectively.

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Figure 9. Differentiation of Peasant Households in the Central Region, 2003 -2012


In 2012, the proportions of pure peasant households in the central and western

regions were around 20 percent, 5 percent higher than that of the eastern region. In

terms of trend change, the proportion of pure peasant households in the eastern region

has been stable from 2003 to 2012(Increased only from 14.76 percent to 14.95 percent)

while that in the central and western regions have decreased by 3.91 percent and 3.35

percent respectively.

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Figure 10. Differentiation of Peasant Households in the Western Area, 2003 -2012


(2) Peasant Household Differentiation and Agricultural Productivity. The correlation

between different types of farmers and agriculture performance is diverse. As shown

in Table 3, the degree of specialization in the pure peasant households is the highest,

so their agricultural labour productivity is the highest with 949RMB/month, followed

by Type I part-time peasant households whose labour productivity is 810RMB/month.

Labour productivity for non-part-time peasant households is 752RMB/month, while

that of non-peasant households is the lowest. Their main economic activity is not for

agriculture. Their agricultural labour productivity is only 269RMB/month.

Table 3. Labour Productivity for Different Types of Peasant Households

Employment Type Mean Std. Dev. Freq.

Pure Peasant Households 949.13 1478.52 79131

Type I Part-time Households 810.57 1743.34 154435

Type II Part-time Households 752.56 1344.11 123986

Non-Peasant Households 269.52 576.36 13659

Total 800.82 1536.86 371211


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The land productivity of pure peasant households is 2,063RMB/mu, which is also

the highest (see Table 4). From there, the land productivity progressively decreases,

from 1,716RMB/mu for part-time peasant households to around 1,180RMB/mu for

both non-part-time peasant households and non-peasant households. Hence, it is also

demonstrated that the degree of specialization of agricultural production affects the

stimulus of land productivity.

Table 4. Land Productivity for Different Types of Peasant Households

Employment Type Mean Std. Dev. Freq.

Pure Peasant Households 2063.01 34666.05 78491

Type I Part-time Households 1716.18 32496.23 154063

Type II Part-time Households 1186.97 14341.39 126344

Non-Peasant Households 1181.65 2309.28 13447

Total 1590.42 27574.58 372345


2. Changes in the Structure of Agricultural Inputs:

The Replacement of Labour by Machinery

Traditional agriculture in China mainly relies on high labour input to improve

land use ratio. Since 2003, the increase in the agricultural productivity is mainly

reflected by the great increase in the agricultural labour productivity. It manifests the

changes in agricultural input structure brought by the reallocation of the rural labours

in different sectors. Therefore, we should observe the agricultural transformation

based on changes of agricultural inputs. Furthermore, as the agricultural development

model changes, the high-labour input on which the traditional agriculture in China

primarily based is transferred to machinery and capital input.

(1) Labour Input. The cost of crop farming has increased and agricultural labour input

has decreased. According to Figure 13, The household self-employment cost and hire

labour wage have increased significantly. And the hire labour wage has been

increased from 14.05 RMB/day in 1999 to 112.39 RMB/day in 2015, which has been

increased by almost 8 times. The household hire labour wage has been increased from

9.5 RMB/day in 1999 to 78 RMB/day in 2015, which has been increased by almost 7

times. From 1999 to 2015, the total cost for household hire labour in major crops have

experienced constant growth (See Figure 11). As the labour cost been increasing,

peasant households generally adopt the strategy of reducing labour input when they

allocate labour force. At last, the labour inputted in crop farming has decreased

remarkably (As in Figure 12).

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Figure 11. Price of Labour Input in Crop Farming (Wheat, Rice and Corn)

Data Source: Compilation of cost and benefit data of national agricultural products

(Quanguo nongchanpin chengben shouyi huibian, Over the Years)

Figure 12. Changes of Household Labour Input in Crop Farming, 2010-2015

Unit: Day

Data Source: Compilation of cost and benefit data of national agricultural

products(Quanguo nongchanpin chengben shouyi huibian,2016)

3. The Great Increase in Machinery Input

Since 2004, the central government has implemented the development strategy of

using agricultural machinery and the policy of machinery purchase subsidy. The

diverse types of major agricultural machinery across the country have experienced

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rapid growth. The overall momentum for agricultural machinery maintain its average

growth rate of around 6 percent. The agricultural machinery operated mainly for

wheat harvest before is now used in the wheat, rice and corn harvest (Kong et al.,

2015). The harvest area completed by agricultural machinery across areas have been

increased by over 7 percent per year(see Figure 13) .the mechanization degree of crop

farming have been improved remarkably (see Figure 14).

Figure 13. Development for Agricultural Machinery in China, 2003-2013

Unit: A Thousand Hectares

Data Source: The data of 2003 is from the General Situation of Agricultural

Mechanization Development in China, please refer to

http://www.gov.cn/test/2005-07/04/content_11973.htm. The Data of 2004 – 2013 is

from the National Agricultural Mechanization Statistics Annual Report (2004-2013).

http://www.gov.cn/test/2005-07/04/content11973.htm

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Figure 14. Changes in Machinery Operation Cost for Wheat, Rice and Corn

(2012-2015) Unit: RMB

Data Source: Compilation of cost and benefit data of national agricultural products

(Quanguo nongchanpin chengben shouyi huibian, 2016)

4. Gradual Expansion in the Scale of Agricultural Land.

According to the micro data of 70,000 sampling peasant households released by

NBS (Table 6), from 2004 to 2012, the average ploughing land operation scale for all

sampling peasant households increases from 7.88mu/household to 8.23mu/household.

In terms of peasant household type, except for non-peasant household, the operation

scale for other three types of peasant households have experience minor increase, in

which the actual ploughing land operation scale for type I part-time household and

type II part-time households has increased from 7.76 mu/household and 4.33

mu/household to 10.68 mu/household to 4.93 mu/household separately. During the

eight years, the ploughing land scale for peasant households have increased from 14.1

mu/household to 17.59 mu/household.

Table 5. Actual Land Scale for Peasant Households Unit: mu/household

2004 2005 2007 2009 2012

Peasant Households 14.10 15.86 16.43 16.98 17.59

Type I part-time


Type II part-time


Non-peasant 0.94 0.76 0.68 0.80 0.81

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Households

All Peasant Households 7.88 8.21 8.40 8.67 8.32


Note: The household type in the table is based on the total income proportion.

In terms of different scales, according to the data released by the Ministry of

Agriculture, the peasant households whose ploughing area is less than 10 mu are 226

million, accounting for 85.96 percent of total contract households till the end of 2013.

The peasant households whose ploughing area is more than 10 mu have reached 14.04

percent. In terms of scale expansion type, the proportion for 10-30 mu and 30-50 mu

are the highest, which have reached 10.28 percent and 2.55 percent separately. Till

2014, the households who manage less than 50 mu’s land still make up the majority

(98.71 percent) ( See Table 5).

It is worth noting that the proportion of peasant households owning large-scale

land is not high, but the certain number has been pretty high. In 2014, the number of

peasant households whose ploughing land is 50-100 mu has reached 235.4 million,

those whose ploughing land is 100-200 mu have reached 750,000, and those whose

ploughing land is over 200 mu have reached 310,000. Considering the fact that China

has been characterised as small-scale agricultural economy for a long time, the

increase of large-scale peasant households is very unusual.

Table 6. Ploughing Land Scale by Peasant Households (2010 – 2014)

（Unit: 10,000 Household）

Operation Scale

2010 2011 2012 2013 2014

Household

Number

Household

Number

Household

Number

Household

Number

Household

Number

Less than

10 mu

Area 22390.6 22659.3 22531.2 22666.4

26210.5

（98.71 %）

%age 85.80 % 85.94 % 86.11 % 85.96 %

10-30 mu Area 2824.9 2819.3 2742 2711.8

%age 10.82 % 10.69 % 10.48 % 10.28 %

30-50 mu Area 609 611.4 603.6 673.6

%age 2.33 % 2.32 % 2.31 % 2.55 %

50-100 mu Area 201.1 197.1 204.9 225.8 235.4

%age 0.77 % 0.75 % 0.78 % 0.86 % 0.89 %

100-200

mu

Area 48.8 53.2 56.9 62.9 75

%age 0.19 % 0.20 % 0.22 % 0.24 % 0.28 %

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More than

200 mu

Area 23.3 25.7 25.7 28.9 31

%age 0.09 % 0.10 % 0.10 % 0.11 % 0.12 %

Data Source: Statistics of Basic Operation in Rural Areas (nongcun jiben jingying

tongji ziliao) from the Department of Economic Management, Ministry of Agriculture

(2010-2014).

5. Farmland Circulation and Development in Leasing Market.

Excessively small land scale and high degree of land segmentation has long been

considered as the outstanding issue that impede the agricultural modernization in

China (Liu et al., 2015). With the rural-urban migration in China, agricultural land

circulation has become an important way for peasant households to expand their scale

of operation (Gao et al., 2011). From early 1980s to early 1990s, the proportion of

farmland in circulation in China is very small. According to the survey data of fixed

observation sites in rural China, from 1984 to 1992, the percentage of households who

did not transfer farmland has reached 93.8 percent, and that of households who

transferred part of their farmland is only 1.99 percent. Since 2003, the proportion of

farmland in circulation has been increased. According to the sampling survey of

20,842 households from fixed observations sites in the east, central and west regions

by Ministry of Agriculture, the farmland circulation area accounts for 9.1 percent of

the total cultivated land area in China, with 9 percent, 11.6 percent and 3.86 percent

for the eastern, central and western regions separately (Liu, 2013).

In recent years, the farmland circulation area has witnessed relatively increasing

trend in China. Till the end of 2014, the total farmland circulation area of household

contracting ploughing land in China has reached 0.403 billion mu, which is 2.16 times

of the figure in 2010 (see Table 7). The total farmland circulation area accounts for

30.32 percent of household contracting ploughing land area, which has increased by

15.65 percent from 2010. The farmland circulation rate in the central region is the

highest with the highest growth rate, followed by eastern region, while the farmland

circulation rate in the western region is the lowest with the lowest growth rate (see

Table 8). Till the end of 2013, the farmland circulation rate in the eastern region has

reached 26.06 percent, that in the central region reached 30.64 percent and that in the

western region reached 19.53 percent, which has increased by 7.5 percent, 10.44

percent and 5.28 percent from 2011 separately (As in Table 8).

Table 7. Changes in Farmland Circulation Rate, 2010-2014

(Unit: 100 million mu)

Year 2010 2011 2012 2013 2014

Contracting Ploughing Land Area 12.73 12.77 13.1 13.27 13.29

Circulation Area 1.87 2.28 2.78 3.41 4.03

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Circulation Rate 14.67% 17.85% 21.25% 25.70% 30.32%

Data Source: Statistics of Basic Operation in Rural Areas(nongcun jiben jingying


(2010-2014).

Table 8. Changes in Farmland Circulation Rate in Different Regions

(2011&2013)


Year 2011 2013

Area Eastern Central Western Eastern Central Western

Household

Contracting Area 3.55 5.15 4.08 3.59 5.25 4.43

Circulation

Area 0.66 1.04 0.58 0.94 1.61 0.86

Circulation Rate 18.56 % 20.20 % 14.25 % 26.06 % 30.64 % 19.53 %



(2011&2013).

According to the relevant policy and regulations proposed by Ministry of

Agriculture, there are five main modes for ploughing land circulation, which are

sub-contract, lease, joint stock partnership, exchange and transfer. In 2014, the

proportion for these five types of circulations were 46.53 percent, 33.17 percent, 6.68

percent, 5.94 percent and 2.97 percent separately (see Table 9). The land circulation

area by sub-contract and leasing accounts for 79.7 percent of the total circulation area,

which have increased by 95.83 percent and 173.47 percent from 2010 separately. But

in the same period, the proportion of land circulation by sub-contract has decreased by

5.08 percent, while that by leasing has increased by 6.83 percent.

Table 9. Changes in the Land Circulation Mode (2012-2014)


Year 2010 2011 2012 2013 2014

22

Sub-Contract Area 0.96 1.16 1.37 1.6 1.88

Percentage 51.61 % 50.88 % 49.28 % 46.92 % 46.53 %

Transfer Area 0.09 0.1 0.11 0.11 0.12

Percentage 4.84 % 4.39 % 3.96 % 3.23 % 2.97 %

Exchange Area 0.1 0.15 0.18 0.21 0.24

Percentage 5.38 % 6.58 % 6.47 % 6.16 % 5.94 %

Lease Area 0.49 0.62 0.8 1.08 1.34

Percentage 26.34 % 27.19 % 28.78 % 31.67 % 33.17 %

Joint Stock

Partnership

Area 0.11 0.13 0.17 0.24 0.27

Percentage 5.91 % 5.70 % 6.12 % 7.04 % 6.68 %

Other Modes Area 0.11 0.12 0.15 0.17 0.19

Percentage 5.91 % 5.26 % 5.40 % 4.99 % 4.70 %



(2010-2014).

In terms of areas, for east, central and west region, sub-contract and lease are the

two most popular modes. The land circulated through these two approaches separately

accounts for 75.69 percent, 79.46 percent and 79.93 percent of the ploughing land

circulation in east, central and west region in 2013, among which the share of

sub-contract is the highest for central China. In 2011, the proportion of land circulated

through sub-contract has exceeded 60 percent of the total circulation area in central

region. Till 2013, it still accounts for more than half of the total circulation area. But

that in the east and west region, sub-contract is less popular, with an occupation of

less than 40 percent of the total circulation area. Correspondingly, the proportion for

ploughing land circulated by leasing in the central area is obviously lower than that in

the eastern and western China. But from 2011 to 2013, the proportion of leasing land

in central region has been increased a little. Besides, it is worth noting that the share

of land circulated through joint stock partnership in the east is the highest with over

10 percent of the total circulation area, and it reached 11.26 percent in 2013, while the

proportion of using joint stock partnership in the central and west is only 6.11 percent

and 3.81 percent respectively.

23

Table 10. Changes in the Land Circulation Modes in Different Regions

(2011&2013)


Year 2011 2013


Sub-Contract Area 0.26 0.66 0.25 0.37 0.88 0.34

percentage 38.99 % 63.29 % 42.82 % 39.77 % 54.80 % 39.81 %

Transfer Area 0.02 0.04 0.04 0.03 0.04 0.04

Area 3.48 % 3.62 % 6.93 % 2.80 % 2.54 % 5.11 %

Exchange Area 0.03 0.08 0.04 0.04 0.12 0.05

percentage 5.03 % 7.48 % 6.06 % 4.63 % 7.16 % 6.05 %

Lease Area 0.22 0.19 0.21 0.34 0.40 0.35

percentage 33.25 % 18.33 % 35.70 % 35.92 % 24.66 % 40.12 %

Joint Stock

Partnership

Area 0.08 0.03 0.02 0.11 0.10 0.03

percentage 11.67 % 2.99 % 3.31 % 11.26 % 6.11 % 3.81 %

Other Modes Area 0.05 0.04 0.03 0.05 0.08 0.04

percentage 7.58 % 4.28 % 5.18 % 5.62 % 4.73 % 5.09 %



(2011&2013).

6. Changes in the Rural Land Operation Mode

In recent years, with the acceleration in the land circulation, farm land operation

has experienced profound changes.

In terms of land circulation, peasant household are still the main entity for the

land transfer. But the groups of accepting the circulation land tend to be diversified. In

2014, the proportion that transfer to farmers accounted for 58.31 percent (see Table

11). But a lot of lands are also transferred into other groups, which include specialized

24

farmers’ cooperatives accounting for 21.84 percent, enterprises for 9.68 percent and

other groups for 10.17 percent. It is worth noting that compared with 2010, the

proportion of the land flowing into the peasant households has declined by 11.04

percent while the proportion of the land flowing into the specialized farmers’

cooperatives has increased by 10.01 percent, into enterprises by 1.62 percent and that

into other groups declined by 0.58 percent.

Table 11. The Main Groups Accepting the Transferred Land (2010-2014)


Year 2010 2011 2012 2013 2014

Peasant Household Area 1.29 1.54 1.8 2.06 2.35

Percentage 69.35 % 67.54 % 64.75 % 60.41 % 58.31 %

Specialized

Cooperatives

Area 0.22 0.31 0.44 0.69 0.88

Percentage 11.83 % 13.60 % 15.83 % 20.23 % 21.84 %

Enterprise Area 0.15 0.19 0.25 0.32 0.39

Percentage 8.06 % 8.33 % 8.99 % 9.38 % 9.68 %

Other Bodies Area 0.2 0.24 0.29 0.34 0.41

Percentage 10.75 % 10.53 % 10.43 % 9.97 % 10.17 %



(2010-2014).

In terms of area, the proportion of ploughing land flowing into the peasant

households in the east is lower than that in the central and west, while the proportion

of the land flowing into enterprises in the east is higher than that in the central but less

than that in the west. From 2011 to 2013, the proportion of the ploughing land flowing

into the peasant households in the central and west has decreased rapidly, while that

flowing into the cooperatives and enterprise has increased relatively less than that

flow into the peasant households. Specifically, the ploughing land proportion flowing

into the cooperatives in central and west has increased by 9.69 percent and 5.34

percent separately (see Table 12).

25

Table 12. The Main Group Accepting the Transferred Land in Different Areas

(2011&2013)


Year 2011 2013


Peasant

Household

Area 0.37 0.8 0.37 0.51 1.05 0.5

Percentage 56.61

% 76.51 % 64.23 % 54.31 % 64.98 % 58.01 %

Specialized

cooperatives

Area 0.11 0.14 0.05 0.2 0.37 0.13

Percentage 17.38

% 13.12 % 9.41 % 21.34 % 22.81 % 14.75 %

Enterprise Area 0.06 0.05 0.07 0.1 0.1 0.12

Percentage 9.86 % 5.09 % 12.55 % 10.39 % 6.27 % 14.32 %

Other groups

Area 0.11 0.05 0.08 0.13 0.1 0.11

Percentage 16.16

% 5.28 % 13.81 % 13.96 % 5.93 % 12.92 %



(2011-2013).

Although peasant households still play a dominant role in management, in recent

years, the area and proportion of the land managed by peasant households are

declining as shown in Table 11. From 2010 to 2014, the ploughing land area managed

by peasant households has declined by 540 million mu from 1.215 billion mu to 1.162

billion mu, and the proportion of peasant household management decreased by 8.08

percent from 95.44 percent to 87.36 percent. With land area increasingly circulated,

the ploughing land area managed by specialized cooperatives increased by 4 times

from 220 million mu in 2010 to 880 million mu in 2014. The proportion of ploughing

land managed by specialized cooperatives increased by 4.89 percent from 1.73

percent to 6.62 percent. In the same period, the ploughing land area managed by

enterprise and other groups have doubled. The ploughing land area managed by

26

enterprise has increased from 150 million mu in 2010 to 320 million mu in 2014, and

its proportion has increased by 1.75 percent from 1.18 percent to 2.93 percent. The

ploughing land area managed by other groups has increased from 200 million mu to

410 million mu, with its proportion changed by 1.52 percent from 1.57 percent to 3.09

percent.

IV. Conclusion

After 40 years’ reform and rapid structural change, China has made the transition

from “Rural China” to “Urban-rural China”. Among these profound changes, the

agriculture in China has witnessed Millennium transformation, which we call

Historical Transformation. Since Song dynasty, with China’s population growth

accelerating, land reclamation potential is exhausted. China’s farmers have been

working hard for generations on the Loess Plateau to improve the potential

productivity of small-scale land, which shaped the agricultural model of increasing

labour input and maintaining the subsistence of small farmers. This traditional

agriculture which not only honours the Chinese agricultural civilization, but also

binds the peasants has experienced historical changes under the impact of the rapid

industrialization and urbanization after the reform and opening-up. The marked event

is that agricultural labour productivity, which has been stagnating and even declining,

has risen at a greater growth rate than land productivity after 2003. Then agriculture is

beginning to compete with other industries. What it brings are the differentiation

among homogeneous peasants, excessive agriculture labour input transferring to

machinery and capital input, gradual expansion in the land operation scale, the

development in the farmland leasing market and the diversification of the agricultural

operation mode. These combined features have proved our judgement on the

historical transformation of agriculture in China.

Facing and recognizing the historical transformation of agriculture helps to

formulate the new agricultural policy in the next period, including the

re-understanding of the function and development form of agriculture, the direction of

agricultural technological change, the path and arrangement of agricultural system

change, and the possible form of agricultural organization and cooperation. It is

necessary to redesign and reconstruct the new agricultural development mode to adapt

27

to the great transformation from the Rural China to the Urban-rural China.

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