Agricultural production enters a new stage of appropriately expanding scale

China's economy completed the crossing of the Lewis turning point (the turning point from labor surplus to labor shortage) during 2004-2010. After a country's economy crosses the Lewis turning point, the relationship of relative scarcity between capital and labor undergoes a fundamental change, and one important manifestation is the growing phenomenon of capital substituting for labor. In agriculture, where labor is relatively abundant, as large numbers of rural laborers flow out, the resource endowment structure of agricultural production has also changed in recent years; the organizational mode of substituting labor for capital in traditional agricultural production has gradually been replaced by capital substituting for labor, and this has become an irreversible trend.

In this process, there is one issue that warrants special attention. In agricultural production, capital substituting for labor does not necessarily bring about an increase in labor productivity. On the contrary, if the inflow of funds is not accompanied by a corresponding expansion of production scale, the substitution of capital for labor will lead to a waste of resources in the agricultural production process. Specifically, the constraints that an overly small production scale places on agricultural development are mainly shown in the following two aspects:

First, it constrains the application of advanced technology and the development of modern agriculture. In actual production, there is a scale threshold for the application of agricultural technology; when a farming household's production scale is relatively small, in accordance with the principles of economics and rationality, the household is not inclined to adopt new technology, and may even be entirely unable to adopt “scale-dependent technology” on its own. Therefore, under conditions where the scale of agricultural production remains unchanged, especially under conditions of agricultural production based on small farming households, the substitution of capital for labor is mainly manifested in the purchase of low-tech agricultural machinery and the heavy use of production factors such as pesticides, chemical fertilizers, and herbicides. This still belongs to an extensive mode of agricultural production, which not only constrains the application of advanced technology and limits the improvement of agricultural production levels, but also increases the possibility of agricultural production pollution.

Second, it has an adverse effect on the structure of the agricultural labor force. An overly small scale of agricultural production makes it difficult to raise agricultural production efficiency, and the comparative returns of agriculture are low, so laborers who are capable, knowledgeable, and in the prime of life will choose to leave the agricultural sector and enter the secondary and tertiary industries. This causes the structure of the agricultural labor force to show a trend of aging and low skill levels. The development of modern agriculture requires modern agricultural production organizations and producers suited to it. To transform the mode of agricultural production, it is first necessary to change the organizational mode of agricultural production and to cultivate and develop new types of agricultural operating entities, such as family farms, specialized large-scale farmers, farmers' cooperatives, leading enterprises, and agricultural socialized service organizations, thereby forming a new agricultural production service system. An aging and low-skill agricultural labor force structure is obviously not conducive to agricultural development, and in particular is not conducive to opening up agricultural product markets and to the use of factors such as new agricultural production technologies, new varieties, and new means of production. If the structure of the agricultural labor force does not improve, it will be difficult to change the extensive mode of agricultural production, and the decline of agriculture and the decay of rural areas will be unavoidable.

Therefore, appropriately expanding the scale of agricultural production is the key to safeguarding food security and achieving the healthy development of agriculture after China crosses the Lewis turning point. Appropriately expanding the scale of agricultural production does not mean changing the rural land contracting relationship, nor does it mean blindly expanding the scale of agricultural production; rather, it means reasonably determining the scale of agricultural production based on factors such as natural and economic conditions, the situation of rural labor transfer, and the level of agricultural mechanization. On the basis of carrying out the work of confirming, registering, and issuing certificates for land contractual management rights, through means such as the orderly transfer of land management rights, fragmented plots are concentrated in the hands of new types of agricultural operating entities such as specialized large-scale farmers, thereby achieving agricultural production on an appropriate scale. In our research we found that once agricultural production on an appropriate scale is achieved, farmers' demand for fertilization techniques, supporting improved seed varieties, cultivation techniques, and advanced agricultural machinery and equipment will increase, pollution sources such as chemical fertilizers, pesticides, and plastic film will become more controllable, and the unit treatment cost of agricultural non-point source pollution will decrease. This can not only improve the efficiency of farmland use, but also ensure that the income of large grain-producing farmers is basically comparable to that of urban residents, increase farmers' income, and attract more capable people to engage in agricultural production. Achieving appropriately scaled operation of land and agricultural production will naturally develop the social division of labor and specialized production, and will form a series of specialized production bases, thereby further laying the foundation for increasing scientific and technological input and achieving standardized and ecological production, forming a virtuous cycle of modern agricultural production.