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Hog Production In China: Technological Bias And Factor Demand

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  • Ma, Hengyun
  • Rae, Allan N.

Abstract

China's agricultural output has expanded rapidly since the economic reforms of the late 1970s, reflecting both productivity growth and mobilization of inputs. Over the same period, increased consumption of livestock products has been a feature of China's food consumption. Widely different projections of China's demand for feedgrains to feed its expanding livestock sector have motivated this research. Productivity growth is an important component of such projections, but past estimates have been controversial, few focus on livestock, and we are aware of none that examine technological bias in China's livestock production. For example, does the nature of technical progress lead to increased or reduced use of feedgrains relative to other inputs? A feature of China's livestock sector is rapid structural change towards larger and more commercial and intensive production systems. As specialization has developed over the last two decades, the share of backyard livestock production has declined and the shares of specialized households and commercial enterprises have increased. We measure technological change and biases for each of these structures so that this information can be eventually combined with that on structural change when making feedgrain demand projections. Our commodity focus in this paper is on hog production, which is the major consumer of feedgrains in China. We use a translog cost function and adjusted livestock data to estimate technological change and biases. Technical change has not been neutral, and the bias towards feedgrain-saving was found to be statistically significant. We also find that the demand for feedgrains is elastic with respect to its own price and that strong substitution relationships exist with respect to some other inputs. Thus input price changes are important, along with technological biases, in changing the feedgrain input shares to hog production.

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Bibliographic Info

Paper provided by Massey University, Centre for Applied Economics and Policy Studies in its series China Agriculture Project Working Papers with number 23688.

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Date of creation: 2004
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Handle: RePEc:ags:mascap:23688

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Postal: Massey University, Palmerston North
Phone: +6 356 9099
Fax: +6 350 5660
Web page: http://econ.massey.ac.nz/caps/
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Keywords: Production Economics;

References

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  1. Frank H. Fuller & Dermot J. Hayes & Darnell B. Smith, 1999. "Reconciling Chinese Meat Production and Consumption Data," Center for Agricultural and Rural Development (CARD) Publications 99-wp210, Center for Agricultural and Rural Development (CARD) at Iowa State University.
  2. Binswanger, Hans P, 1974. "The Measurement of Technical Change Biases with Many Factors of Production," American Economic Review, American Economic Association, vol. 64(6), pages 964-76, December.
  3. Rutherford, A.S., 1999. "Meat and milk self-sufficiency in Asia: forecast trends and implications," Agricultural Economics: The Journal of the International Association of Agricultural Economists, International Association of Agricultural Economists, vol. 21(1), August.
  4. Simpson, James R. & Li, Ou, 2001. "Long-Term Projections Of China'S Supply And Demand Of Animal Feedstuffs," International Trade in Livestock Products Symposium, January 18-19, 2001, Auckland, New Zealand 14547, International Agricultural Trade Research Consortium.
  5. Nin, Alejandro & Hertel, Thomas W. & Foster, Kenneth & Rae, Allan, 2004. "Productivity growth, catching-up and uncertainty in China's meat trade," Agricultural Economics, Blackwell, vol. 31(1), pages 1-16, July.
  6. Channing Arndt & Thomas W. Hertel & Paul V. Preckel, 2003. "Bridging the Gap between Partial and Total Factor Productivity Measures Using Directional Distance Functions," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 85(4), pages 928-942.
  7. Ludena, Carlos E., 2004. "Impact Of Productivity Growth In Crops And Livestock On World Food Trade Patterns," 2004 Annual meeting, August 1-4, Denver, CO 20366, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
  8. Fan, Shenggen & Agcaoili-Sombilla, Mercedita C., 1997. "Why do projections on China's future food supply and demand differ?:," EPTD discussion papers 22, International Food Policy Research Institute (IFPRI).
  9. Woodland, A D, 1975. "Substitution of Structures, Equipment and Labor in Canadian Production," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 16(1), pages 171-87, February.
  10. Rutherford, A. S., 1999. "Meat and milk self-sufficiency in Asia: forecast trends and implications," Agricultural Economics, Blackwell, vol. 21(1), pages 21-39, August.
  11. Atkinson, Scott E. & Halvorsen, Robert, 1998. "Parametric tests for static and dynamic equilibrium," Journal of Econometrics, Elsevier, vol. 85(1), pages 33-50, July.
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