Measuring China’s Agricultural Total Factor Productivity CCAP’s Workshop, Beijing

May 30, 2018

China is currently the largest producer and most important consumer of many agricultural products in the world. The general consensus of opinions suggests that China’s demand for agricultural products will continue to grow in the foreseeable future and, as the population becomes wealthier, the demand for high quality agricultural product is expected to grow even more strongly. However, the future of domestic supply is less certain and it, in part, depends on the growth of agricultural productivity. This uncertainty is likely to keep reshaping the structure of China’s international trade in agricultural commodities and may have profound implications for Australia. For example, after a sustained period of productivity growth, China became a net rice exporter in 2010. In the meantime, as a consequence of inadequate productivity growth, the gap between domestic demand and supply of high value products (such as wheat, beef and sheep meat and dairy products) has been widening, resulting in increased imports. Its implication for Australia is obviously, since Australian farmers have been major suppliers of these commodities on the international market.

This workshop aims to achieve two objectives. First, it will provide a platform to seek feedback on a proposal to apply the state-of-art, internationally peer-reviewed methodology to the estimation of China’s agricultural productivity between 1978 and 2010, at both the national and regional levels. This involves construction of a production accounts for agriculture industry in accord with the international standard of National Accounts (SNA 2008), which covers the outputs of grain, livestock, dairy and other produce and inputs of labour, capital, land and other inputs. Total factor productivity (TFP) growth will be derived based on these statistics. In the workshop, participants will be invited to provide suggestions and advice on how to collect data and produce a high quality production account.

Second objective is seek comments and advice from experts and other workshop delegates on how to use the results to analyses the pattern of China’s agricultural productivity and, more importantly, its relationships with potential drivers (such as R&D, market support schemes and market access policies). The TFP statistics and the subsequent analysis are expected to enrich the knowledge about China’s agricultural productivity and provide relevant policy makers with useful information and valuable insights to assist their future work.

This workshop is sponsored by the Australian Bureau of Agricultural and Resource and Sciences (ABARES), and jointly run with the School of Advanced Agricultural and Science (SAAS) and the Centre for China Agricultural and Policy (CCAP), the Peking University. It is part of “Measuring Agricultural Total Factor Productivity in China: Pattern and Drivers”, a research project that falls under the Cooperation on Strengthening Commodity Production and Market Research initiative in the China-Australia joint Framework on Agricultural Cooperation signed by the Chinese and Australian Ministers of Agriculture on 12 November 2015. It was further endorsed in 2017 in the Plan of Action on Implementing Agricultural Cooperation Projects agreed between the Ministry of Agriculture of People’s Republic of China and Commonwealth Department of Agriculture and Water Resources of Australia.

This is the first of the two workshops to be held during the life of this project. 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. The second workshop is expected to be held in the first half of 2019 to report on and seek feedback on the results generated from this project.