THE RAPID RISE OF CROSS-REGIONAL AGRICULTURAL MECHANIZATION SERVICES IN CHINA

The rapid rise of cross-regional agricultural mechanization services in China is studied. Despite small farm sizes, high land fragmentation, and wage escalation, agricultural production in China has steadily increased in the past. In response to a rising wage rate, the most power-intensive stages of agricultural production, such as land preparation and harvesting, have been increasingly outsourced to special service providers. Rural households were facing farm-level labor constraints, in particular during the agricultural peak seasons, before these constraints translated into a significant tightening of the farm labor market. From the supply side, there had been a sharp substitution of animal traction with machines. Animals used for traction, per 100 farm families, dropped from about 55 in 1985 to only 20 in 2009. Moreover, both the small machine and large machine stocks developed quickly. Tens of thousands of private mechanization service providers travel throughout the country to harvest crops.