Economic drivers of contemporary smallholder agriculture in a transitional economy: A case study of Hu Village from southwest China

Based on an in-depth case study of a rural community, this paper documents the contemporary state of Chinese smallholder agriculture and the changes that it has been experiencing in the context of dramatic socio-economic transition through the lens of three main economic drivers: livelihood diversification, market conditions and government interventions. Results reveal that the change in Chinese smallholder agriculture has been complex and multidimensional. All three factors exert profound influence and shape the current state of Chinese agriculture. Massive rural-urban migration has resulted in labour shortages, which in turn have led to a reduction in agricultural diversity and land use intensity and a shift from traditional labour-intensive technologies to modern capital-intensive technologies. However, because of well-developed agricultural markets, input use levels are similar across farmer categories (such as income diversification), helping to maintain productivity. Furthermore, reduced profits from farming due to increasing input prices and decreasing output prices have exerted pressure on smallholders to increasingly turn to nonfarm activities and have also triggered a thriving informal land transfer market, which was previously non-existent. Policy implications include the need to strengthen local economies, improve market conditions, invest in rural infrastructures and facilitate smallholders' mobility.