Thesis Abstract of AGS Students

Impacts of institutional reform, input use and technological change on crop production in Guizhou province, China

Yiming Yuan (1993)

This study specifically aims at: 1) analyzing the impacts of technological change, input use, and institutional reform on crop production in Guizhou province; 2) finding out the potential of crop production in the agricultural systems of Guizhou province; and 3) laying out strategies to increase crop production.

Socio-economic analysis of survey data and econometric analysis of time-series data (1952-1990) were employed in this study. Informal and formal surveys covered 180 households in three villages from three different regions. Socioeconomic surveys reveal that the prevailing institutions in crop production in Guizhou province generally are favorable for crop production. Nevertheless, problems have emerged. Highly fragmented and widely-scattered farmland, incomplete land use contract systems as well as short supply of chemical fertilizer, and complicated marketing systems are those issues needed to be dealt with to improve crop production.

Average production function and stochastic frontier production in the forms of both Cobb- Douglas and Restricted Translog were estimated by using Ordinary Least Square (OLS) method and Maximum Likelihood (ML) techniques. By decomposing the error term into two components, one with normal distribution and the other with truncated normal distribution, the production (technical) efficiency was estimated. Finally, the growth of crop production was accounted. The average estimates of production efficiency in 1952-1965, 1966-1977, and in 1978-1990 were 71.3%, 68.8% and 75.1% respectively.

It was found that, from 1952 to 1990, input use increase was the most important factor of crop production growth with a contribution of 73.5%, institutional reform contributed 8.68% to the total value increase in crop production, technological change contributed the rest 17.77%. Technological change was the main source of productivity increase in the crop production systems of Guizhou province. It was also found that during different time periods the contributions of institutional reform, input use, and technological change were different. In the land reform era (1952-1965) and the latest economic reform period (1978-1990), institutional reform positively affected crop production, while during "The Cultural Revolution" period (1966-1977), crop production was negatively affected by institutions. The share of input use in crop production increase was declining from one period to another. Contribution by technological change to crop production growth was increasing from 1952-1965 period to 1966-1977 period, it decreased after 1977.

In technological change, neutral technological change was the dominant part, accounting for 86% of total technological change, biased technological change contributed 14% to the total technological change.

Based upon the findings, three recommendations were made as the short- and long-term strategies for crop production development: 1) formulation of well-defined policies on land tenure, transfer of land use rights, improvements in input and output marketing institutions; 2) increasing chemical fertilizer use; 3) more investment on research and projects to stimulate technological progress and diffusion.

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