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Mechanization outsourcing clusters and division of labor in Chinese agriculture:

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  • Zhang, Xiaobo
  • Yang, Jin
  • Reardon, Thomas Anthony

Abstract

Most of the poor in the developing countries are smallholder farmers. Improving their productivity is essential for reducing poverty. Despite small landholdings, a high degree of land fragmentation, and rising labor costs, agricultural production in China has steadily increased. If one treats the farm household as the unit of analysis, it would be difficult to explain the conundrum. When seeing agricultural production from the lens of division of labor, the puzzle can be easily solved. In response to rising labor costs, farmers outsource some power-intensive stages of production, such as harvesting, to specialized mechanization service providers, which are often clustered in a few counties and travel throughout the country to harvest crops at very competitive service charges. Through such an arrangement, smallholder farmers can stay viable in agricultural production.

Suggested Citation

  • Zhang, Xiaobo & Yang, Jin & Reardon, Thomas Anthony, 2015. "Mechanization outsourcing clusters and division of labor in Chinese agriculture:," IFPRI discussion papers 1415, International Food Policy Research Institute (IFPRI).
    • Handle: RePEc:fpr:ifprid:1415
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    More about this item

    Keywords

    Agriculture; mechanization; microeconomics; Wages; Economic development; Smallholders;
    All these keywords.

    JEL classification:

    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development

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