Are the Changes in China's Grain Production Sustainable: Extensive and Intensive Development by the LMDI Approach

China has experienced an uninterrupted growth of grain output during the past decade. However, a long-term analysis indicates fluctuations in productivity and output levels, as well as dramatic shifts in grain crop mix and regional distribution. This paper, therefore, re-examines the major factors behind the dynamics in China's grain production over the period of 1978-2013. The Index Decomposition Analysis technique, facilitated by means of Logarithmic Mean Divisia Index, is employed to factorize the changes in China's grain output into four effects, i.e., yield effect, area effect, crop-mix effect and spatial distribution effect. The results show that yield effect, having been the major driver behind the growth, is experiencing a declining trend over time, with crop-mix effect gaining increasing importance. The results also indicate that changes in crop-mix caused an increase in the total grain output during 2003-2013, however this was due to abandonment of soybean farming, which is not sustainable in terms of self-sufficiency. The effect of spatial distribution has been diminishing ever since 1984. Therefore, re-allocation of areas sown is not likely to damper the sustainability of grain farming.