Reforms, incentives, welfare and productivity growth in Chinese wheat production

Arbeitspapier

Following the rural reform in 1978 a series of agricultural reforms were introduced in China. The main aim of these reforms was to create incentives for the farmers to produce more. The nineties' price reform that was aimed at deregulating the agricultural market eventually resulted in a huge drop in agricultural production; this apparently motivated the government to take over the control of agricultural prices in 1998. In this paper we examine how and to what extent these reforms affected the productivity and welfare of wheat farmers in China for a dataset that covers all the major rural reforms undertaken in China. We find that the nineties' price reforms resulted in a high magnitude of effort-response from wheat farmers which led to a faster growth of the incentive component of productivity. Due to random weather shocks this response did not result in the expected level of profit and as a result the farmers suffered a huge decline in welfare. The regulations introduced in 1998 destroyed the incentive-induced growth in TFP. In general wheat farmers in China responded highly when markets were made more competitive, and their effort-response for flat subsidies (e.g. at the ones introduced in the eighties) was very marginal.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Cardiff Economics Working Papers ; No. E2010/16

Classification and Topics

• Classification: Wirtschaft ; Economic History: Agriculture, Natural Resources, Environment, and Extractive Industries: Asia including Middle East ; Economic Development: Agriculture; Natural Resources; Energy; Environment; Other Primary Products ; Economywide Country Studies: Asia including Middle East ; Micro Analysis of Farm Firms, Farm Households, and Farm Input Markets
• Subject: China ; Incentives ; TFP ; Agriculture ; Wheat Production ; Bodenreform ; Agrarreform ; Agrarproduktion ; Ökonomischer Anreiz ; Produktivität ; China

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Patel, Vasita ; Selim, Sheikh
• Event: Veröffentlichung
• (who): Cardiff University, Cardiff Business School
• (where): Cardiff
• (when): 2010

Further information

• Handle: http://hdl.handle.net/10419/65829
• Last update: 10.03.2025, 11:44 AM CET