China's agricultural mechanization development, why is the system important?

This topic stems from a book, "Why the system is important" written by Sheng Hong. There are two major things in society. One is the system and the other is technology. Technology reflects the relationship between man and nature. It is the way people use nature. The system reflects the relationship between man and man and is the way to deal with the relationship between man and man. The same is true for the development of agricultural mechanization. Institutions and technologies are two key success factors.

During the “Eleventh Five-Year Plan” period, the level of China’s agricultural mechanization increased significantly, and the level of comprehensive mechanization of crop cultivation and harvest in the country reached 52%, which was 16% higher than in 2005. The progress of the “Agriculture Mechanization Promotion Law” and a series of related laws and regulations, safeguard measures and technologies have contributed to the progress.

The system is the norm (game regulation) for promoting cooperation in a pluralistic society. It can bring about an increase in social wealth and is considered as the capital of society. There is no ready-made research data on the contribution of institutional innovation to the development of agricultural mechanization. However, at the International Symposium on Food Security and Rural Development in Post-Crisis Era held in Nanjing in November 2010, Fu Xinhong from Sichuan Agricultural University submitted The report on the effect evaluation of food fiscal direct subsidy policy to guarantee the safety of food quantity, the report shows that the current policy of direct subsidy of grain finance has an important safeguard effect on grain quantity safety; the overall effect of the special subsidy policy on production is better than the comprehensive income subsidy policy. The special subsidy for production has a relatively good effect in promoting grain production, in which the purchase of agricultural machinery and subsidies is more conducive to increasing grain output and ensuring the level of grain self-sufficiency.

The research on the contribution rate of technological change to the development of agricultural mechanization has just started in the academic community. Dr. Wei Dan from Huazhong Agricultural University’s School of Economics and Management has a certain representation of “Research on the Contribution of Technological Progress to the Growth of Three Main Grain Crops”. Studies have shown that the average annual growth rate of rice yield from 1990 to 2008 is 5.33%, the contribution rate of science and technology to the increase of rice yield is 3.38%, the average annual growth rate of wheat yield is 5.84%, and the contribution of science and technology to the increase of wheat yield is 24.48%; The average annual growth rate of corn yield is 7.08%, and the contribution of science and technology to the increase of corn yield is 14.54%.

Entering the "Twelfth Five-Year Plan", China's agricultural mechanization development has taken a new starting point and entered a crucial period for laying a solid foundation for the basic realization of mechanization. To plan for the “Twelfth Five-Year Plan”, it is necessary to transform the development mode throughout the entire process and various fields of agricultural mechanization. Institutional innovation is particularly important.

Economists point out that the system is the most important when transaction costs exist. No system arrangement is perfect. The effective operation of an institutional arrangement is based on the existence of other institutional arrangements. The institutional arrangements are mutually exclusive and complementary, and thus constitute an institutional structure. The system is formed by people in many games. It calculates costs and benefits from the results of multiple games rather than the result of one game.

The development of agricultural mechanization focuses on constructing a reasonable institutional structure to comply with rational choices, which should at least include:

(I) Improve the government investment mechanism. We will establish and improve a steady growth mechanism for financial support for agriculture and improve various subsidies for agricultural production. (2) To promote the full implementation of various support policies and measures put forward in Document No. 22 (2010) of the State Council. (3) Implement a subsidy policy for purchasing agricultural machinery and maximize the effect of policies. (4) Establish effective incentive mechanisms for technological innovation and optimize the structure of agricultural equipment. (5) Focus on the expansion of professional cooperatives to innovate production and management mechanisms. (6) Strengthening supervision and management of production safety. (7) Improve the public service system for agricultural mechanization and improve public service capabilities.