THE IMPACT OF ENVIRONMENTAL DEGRADATION ON GRAIN PRODUCTION IN CHINA,1975-1990

The sluggish rate of growth for China's grain production during the pa st decade is a major concern for agricultural planners. At the nationa l level, the average rate of production fell to 1.8 percent per year f rom 1985 to 1990, after an average growth rate of 4.7 percent per year from 1978 to 1984. Supplies and application rates of critical farm in puts during 1985 to 1990 reached record levels, but had a disappointin g effect on both yields and gross production. We hypothesize that envi ronmental degradation has had a major effect on grain production in ma ny of China's agricultural areas. In this article, we introduce a nati onwide fixed effect grain-yield function which incorporates both tradi tional input variables and an additional set of variables that reflect trends in environmental degradation at the provincial level. The mode l is estimated using time-series data for the period from 1978 to 1990 . The analysis suggests that environmental degradation may have cost C hina as much as 5.7 million metric tons of grain per year in the late 1980s. Results also indicate that the projected losses due to environm ental stress are not evenly distributed throughout China, but that reg ions which brought considerable amounts of marginal land into cultivat ion during the earliest years of the reform period now face the greate st problems. Xinjiang and Gansu in the Northwest, the Loess Plateau pr ovinces, and Yunnan and Guizhou AR in the Southwest reported stagnant production despite significant increases in technical inputs. We concl ude that this stagnation should be credited to the increasing degradat ion of agricultural land in these areas.