China's Agricultural Modernization and Economies of Scale:Barriers and Solutions

This paper identifies three stages in China’s agricultural development with reference to macroeconomic development and international experience.While the first two stages focused on ensuring food security and raising farmer’s income,the current stage must give priority to modernizing agricultural production.The lack of progress in this area is due to the following reasons:diminishing return to capital as a result of small and scattered farming operation which has compromised agricultural competitiveness;agriculture is overdependent on subsidy and protection under the conventional wisdom of the uniqueness of agriculture.This paper attempts to reveal the barriers to China s agricultural modernization and proposes recommendations on reforming the land and household registration systems to increase the economies of scale and productivity.