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Dairy farms in China’s suburban areas have been playing an important role in providing urban markets with fresh milk. With the construction of dairy cattle concentration centres and more cows being driven to the concentration centres, small and scattered dairy farms are gradually disappearing and more concentrated dairy cattle farming is being formed near suburban areas. This paper uses farm survey data and stochastic input distance functions to make estimates of total factor productivity (TFP) on suburban dairy farms, as well as for the entire dairy sector. The results show that over the past decade technical change and TFP growth have been positive on suburban dairy farms, but that on average such farms have been falling behind the advancing technical frontier. Further, the rate of technical change has been more rapid on suburban farms than for the dairy sector as a whole. The results suggest efforts to achieve a more even adoption of new technologies within the suburban dairy sector will further advance productivity growth in the sector.

With the rapid growth in Chinaï¾’s dairy industry, a number of recent papers have addressed either the supply or the demand trends for dairy products in China. None, however, presents a systematic explanation for the recent growth in both the supply and demand for dairy products. The goal of this paper is to sketch a more comprehensive picture of Chinaï¾’s dairy sector and to assess the nature of the sectorï¾’s development in the coming decades. Drawing upon several empirical studies, we examine the trends in dairy product consumption to create a composite picture of the factors underlying the recent growth. We also empirically investigate the sources of production gains in milk supply and assess the relative importance of expanding herd size, changes in the nature of production, technological change, and improvements in efficiency to the overall growth of milk production.

Studies of total factor productivity in livestock production are rare, but when available provide useful information especially in the context of developing countries such as China where livestock is becoming more important in the domestic agricultural economy. We estimate total factor productivity (TFP) for four major livestock products in China employing the stochastic frontier approach, and decompose productivity growth into its technical efficiency and technical progress components. Efforts are made to adjust and augment the available livestock statistics. The results show that growth in TFP and its components varied between the 1980s and the 1990s as well as over production structures. While there is evidence of considerable technical innovation in China's livestock sector, technical efficiency improvement has been relatively slow.

China's agricultural output has expanded rapidly since the economic reforms of the late 1970s, reflecting both productivity growth and mobilization of inputs. Over the same period, increased consumption of livestock products has been a feature of China's food consumption. Widely different projections of China's demand for feedgrains to feed its expanding livestock sector have motivated this research. Productivity growth is an important component of such projections, but past estimates have been controversial, few focus on livestock, and we are aware of none that examine technological bias in China's livestock production. For example, does the nature of technical progress lead to increased or reduced use of feedgrains relative to other inputs? A feature of China's livestock sector is rapid structural change towards larger and more commercial and intensive production systems. As specialization has developed over the last two decades, the share of backyard livestock production has declined and the shares of specialized households and commercial enterprises have increased. We measure technological change and biases for each of these structures so that this information can be eventually combined with that on structural change when making feedgrain demand projections. Our commodity focus in this paper is on hog production, which is the major consumer of feedgrains in China. We use a translog cost function and adjusted livestock data to estimate technological change and biases. Technical change has not been neutral, and the bias towards feedgrain-saving was found to be statistically significant. We also find that the demand for feedgrains is elastic with respect to its own price and that strong substitution relationships exist with respect to some other inputs. Thus input price changes are important, along with technological biases, in changing the feedgrain input shares to hog production.

Studies of total factor productivity in livestock production are rare, but when available provide useful information especially in the context of developing countries such as China where livestock is becoming more important in the domestic agricultural economy. We estimate total factor productivity (TFP) for four major livestock products in China and by employing the random coefficient frontier approach, decompose productivity growth into its technical efficiency and technical progress components. Efforts were made to adjust and augment the available livestock statistics. The results show that growth in TFP and its components varied between the 1980s and the 1990s as well as over production structures. While there is evidence of considerable technical innovation in China's livestock sector, technical efficiency improvement was relatively slow.

Chinese livestock products consumption behavior was analysed for both urban and rural households using a complete regional consumption dataset. Six livestock product expenditure share equations were estimated with an extended AIDS model. The results suggest that Chinese consumers will continue to increase their consumption of livestock products, but consumption patterns have changed in the 1990s. A large percentage of household livestock product expenditure is still on pork. However, the shares for beef, dairy products and poultry consumption will increase substantially. As a consequence the pork expenditure share will be gradually reduced as incomes grow and diet preferences change in both urban and rural households. There are significant differences in livestock product consumption preferences across provinces of China. As a result, studies that omit regional dummy variables in their demand systems can produce different expenditure and price parameters, which should be interpreted with caution.

China has been rapidly increasing its consumption and imports of dairy products in recent years. A two-stage demand system was estimated for livestock product consumption in urban China over the 1990s. Total expenditure elasticities for the livestock commodity group and expenditure elasticities for dairy products within the livestock commodity group were calculated. The results suggest that dairy products, even in urban areas, remain luxury goods because of a high expenditure elasticity (1.14). Due to rapidly increasing consumption and the likelihood of inadequate supply growth, China will continue to increase its imports of dairy products to meet its domestic demand. Projections imply that China’s imports of dairy products may range between 13-30 percent of its total domestic consumption by 2006. Due to differences in regional income and population growth rates, increases in dairy products consumption may occur especially in the Coastal, South and North areas, where potential trade opportunities may exist.