P.H. Verburg et al. Agriculture, Ecosystems and Environment 82 2000 333–354 347
Table 7 Stochastic frontier production function for grain production in
China
a
Variable Parameter
Stochastic frontier Production function
Intercept β
6.282 159
∗
FERT β
1
0.309 38.7
∗
IRRI β
2
0.092 15.0
∗
LABOUR β
3
− 0.071 −8.95
∗
MANURE β
4
0.144 15.4
∗
MACH β
5
0.027 6.98
∗
Inefficiency function Intercept
δ 0.442 5.97
∗
TMP AVG δ
1
0.0291 7.51
∗
PRC TOT δ
2
− 0.000839 −12.8
∗
SOIL δ
3
0.00245 6.67
∗
MEANELEV δ
4
0.000134 6.04
∗
DISTCITY δ
5
0.00197 4.33
∗
ILLIT δ
6
0.422 3.33
∗
AGLF δ
7
− 0.00519 −2.95
∗
INCOME δ
8
− 0.000379 −24.2
∗
EROSION δ
9
0.000615 2.22
∗∗
Diagnostic statistics Gamma γ = σ
2 u
σ
2 s
γ 0.88
Sigma-square σ
2 s
= σ
2 u
+ σ
2 v
σ
2 s
0.16 Log likelihood
− 178.2
Likelihood-ratio statistic 1827
∗∗∗ a
Values in parentheses are the t-ratios of the estimates.
∗
Significant at the 0.01 level.
∗∗
Significant at the 0.05 level.
∗∗∗
Significant at 0.01 level according to Table 1 of Kodde and Palm 1986.
on production efficiency. This suggests that the pos- sibilities for non-farm labour decrease the technical
efficiency of grain production. Income is an important variable in the inefficiency function, having a positive
effect on the efficiency of input use, probably through the opportunities to buy higher quality, more balanced
inputs and invest in the land e.g., terracing. In cor- respondence with other studies Yao and Liu, 1998;
Lambert and Parker, 1998, we found that erosion is also an important source of inefficiency in agricul-
tural production. Apart from the variables included in the inefficiency function there might be some other
determinants of technical efficiency, which were not included in the empirical investigation due to data
availability. For instance, low technical efficiencies may also be related to the availability of the appro-
priate fertilisers. Jin et al. 1999 indicate that unbal- anced fertiliser application is very common in China.
Especially potash fertiliser is underapplicated, dimin- ishing the effectiveness of nitrogen and phosphate
uptake. The average efficiency of grain production in China
as calculated with the derived frontier production function is 0.74 on a scale 0–1. The spatial distri-
bution of the efficiency is displayed in Fig. 8. Low efficiencies are especially found in the northwestern
part of the agricultural area and in the southwestern province Yunnan. High efficiencies are found in the
northeastern part of China and in the central region. The heavily urbanised strip along the southern coast
also has relatively low efficiencies in grain produc- tion. In the same Fig. 8 the most important variables
in the inefficiency function are denoted for the dif- ferent regions with low efficiencies, indicating that
inefficiencies have different causes in different parts of the country.
3.5. Technological progress The coefficient for the time trend in the produc-
tion function fitted for the data from 1986, 1991 and 1996 indicates a 1.2 yearly change in production
level. All other coefficients in the production func- tion are similar to those presented in Table 5. Huang
and Rozelle 1995 derived for a similar production function a technical change of 2.9 yearly, based
upon provincial data between 1975 and 1990. Agri- cultural research is an important determinant of the
rate of technological change. Unfortunately, China’s agricultural research system itself is negatively af-
fected by budget cutbacks and other measures in recent years, which might further decrease the rate
of technological change, and hence grain production Lin, 1998. More detailed analyses of technological
change in Chinese agriculture are presented by Stone 1988, Huang et al. 1995 and Huang and Rozelle
1996.
4. Discussion
The methodologies used in this paper all explore changes, or possibilities for change, in land use based
on an analysis of the regional variability of land use in China. Only the analysis of the changes in agricul-
tural area is based on dynamic modelling, all other
348 P.H. Verburg et al. Agriculture, Ecosystems and Environment 82 2000 333–354
Fig. 8. Technical efficiency in grain production 1991 and indication of areas and variables with high contribution to the inefficiency in grain production.
assessments only explore the options for increases in grain production. However, also the modelling re-
sults should not be interpreted as forecasts of future events. Rather, they indicate possible patterns of land
use change, given the underlying assumptions of the scenario’s.
The methodologies used in this paper are specific for the scale of analysis. As the basic unit of analy-
sis, the individual grid-cells, measure approximately 1000 km
2
, most research methods based on causal, deterministic understanding of processes of land use
change are inappropriate. Single units of observa- tion contain large numbers of different actors of land
use change with numerous interactions in a diverse biophysical environment. Simple aggregation of the
processes known at the level of individual actors will generate large errors due to scale dependencies and
simple aggregation errors as result of non-linear sys- tem responses Rastetter et al., 1992; Gibson et al.,
2000. The methodologies used in this paper are appropriate for the scale of analysis as the relations
between land use patterns and its explanatory factors are quantified in an empirical way with data collected
at the same aggregation level as the analysis and the presented results. The drawback of the empirical
quantification of the relations is the lack of causality, which forces us to interpret the results with caution.
Changes in agricultural area and grain-sown area in particular, occur throughout the entire agricultural area
of China. Hot-spots of change are found in the Ordos and Loess plateau regions where degradation is the
main land use change process, and around the grow- ing cities in eastern China. It can be argued to what
extent this process can be stopped. All decreases in agricultural area need to be compensated for by more
intensive cultivation on the remaining agricultural area to keep up food production. The model results indi-
cate for some areas large decreases in the share of grain crops. Cash crops and vegetables take over a
large share in the cropping systems, especially in the
P.H. Verburg et al. Agriculture, Ecosystems and Environment 82 2000 333–354 349
urban surroundings in southern and eastern China. In these areas the production of vegetables and cash crops
make more intensive use of abundant labour per unit of scarce arable land. However, at the same time this
leads to increased grain imports.
The patterns of agricultural input use and of the efficiency of grain production correspond to a large
degree. Generally, low inputs are associated with low efficiencies. Our analysis made clear that part
of the lower efficiencies and the less intensive grain production can be explained by the less favourable
environmental conditions in the western part of China. Agricultural research, aimed at new varieties
of higher adaptability, and better resistance and en- durance could help to overcome these constraints Lin,
1998. The main problem underlying grain produc- tion intensity and efficiency are the large differences
between well endowed areas around major cities and the rural areas associated with income and illiteracy.
Bridging the gap between urban and rural develop- ment is, therefore, essential to increase productivity
in the less endowed regions. Policies to bridge the gap could include intensifying the construction of
infrastructure including storage, communication, and transport facilities and improving marketing condi-
tions. Our results have also shown that increasing investment in rural education might, in the long-term,
enhance agricultural production. The low income of peasants is correlated with their low education. So
it is an important measure to narrow the differences in human capital and hence income gaps. This will
create conditions for peasants to enhance their quality of life.
These results suggest that China has, at least in certain areas, the potential to increase production and
compensate losses in agricultural area, by increasing production per unit area. However, China’s land use
already has a negative impact on its natural resources through land degradation, pollution and decreasing
land qualities. A further intensification might threaten the long-term sustainability of agricultural produc-
tion Smil, 1993. The transition towards intensive, but sustainable land use systems is therefore more
important for food security than a further intensifi- cation alone. Thus, more emphasis should be paid
to production systems that not only strive for a high production but to maintaining environmental quality
as well.
5. Conclusion
