Measuring China’s Agricultural Total Factor Productivity and Its International Comparison Second CCAP’s Workshop, Beijing

June 11, 2019

“The past four decades have witnessed rapid agricultural growth and rural development in China, driven by ongoing institutional reforms and continued openness to trade. Today, China is the largest producer and most important consumer of many agricultural products in the world. However, further modernizing of China’s agricultural production and rural economy requires urgent solutions to a multitude of constraints. For example, excessive use of chemicals and fertilizers has led to land degradation and rising wage costs resulted in rural-to-urban migration and an associated shortage of rural labour. The small and decreasing scale of individual farms has also hindered the adoption of advanced technologies. Ultimately, solutions to all these problems come down to the question of how to improve agricultural productivity which is, in turn, preconditioned by accurately measuring its changes and identifying the underlying determinants.

Understanding China’s agricultural productivity – its growth, long term trend and underlying determinants has been the topic of a joint research project over the last one and a half years. Collaborators include the Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES), the School of Advanced Agricultural and Sciences (SAAS), Beijing Agricultural University and the Center for China Agricultural Policy (CCAP), Peking University. A second workshop, entitled “Measuring China’s Agricultural Total Factor Productivity and Its International Comparison”, has been scheduled for 10-11 June 2019 at Peking University. Invited to the workshop will be government officials, academics and international experts.

This workshop has three objectives. First, it will be a platform to discuss ideas, policies and current achievements in measuring China’s agricultural productivity. The way we have applied international standards to the measurement and analysis of agricultural productivity, the use of data and our preliminary conclusions will be examined. It will also compare China’s agricultural productivity measures at both the national and regional levels. Outcomes from this workshop will help set up a standard methodology for measuring China’s agricultural Total Factor Productivity (TFP) and provide foundational inputs into the efforts to build international comparison framework, espoused by the OECD.

The second objective is to seek feedback on how to use the obtained productivity measures in the analysis of China’s agricultural policies. Of particular interest are the drivers of productivity growth (such as R&D investments, market access policies, promotion and practices). To achieve this objective, authors of some articles in the (forthcoming) AJARES 2019 Special Issue (that marks the 40th anniversary of China’s agricultural and rural reform) will be invited to present their works. By sharing experiences and lessons learned in these studies, we expect to provide policy-makers with useful insights and suggestions to “revitalize the Chinese rural economy”.

The third objective is to exchange experiences in making cross-country comparisons of agricultural productivity. Since a strong and sustainable growth of agricultural productivity underpins core policy objectives in China and many other countries, comparisons of agricultural TFP growth across countries have strong policy implications. Yet, existing studies are highly contestable due to the use of significantly different data and measurements. We expect, by providing an opportunity to exchange experience and ideas on this topic, this workshop will make a contribution to the development of the framework for international comparison of agricultural TFP.

This is the second workshop for the research project entitled “Measuring Agricultural Total Factor Productivity in China: Pattern and Drivers”. It is part of a broader research agenda set out under the “Cooperation on Strengthening Commodity Production and Market Research” initiative signed by Chinese and Australian ministers for Agriculture on 12 November 2015. It was endorsed again in 2017 in the “Plan of Action on implementing Agricultural Cooperation Projects” agreed between the Ministry of Agriculture of the People’s Republic of China and Commonwealth Department of Agriculture and Water Resources of Australia.

Invited to this workshop will be international leaders in the measurement of agricultural productivity to share experience from both developed and developing countries. Workshop participants will also include Chinese experts and researchers in the fields of productivity measurement and analysis, agricultural economics, agricultural statistics and leading experts and officials from relevant policy making agencies.