《Table 4:Annual Average Cost Growth Rates for Paddy Rice, Wheat and Corn in China (%)》

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《China's Agricultural Development: Structural Contradictions and Policy Transition》

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Note:The main products correspond to by-products，where the main products refer to the main parts of actual harvested crops and the by-products refer to theproducts that are closely related to the main products and generally belong to different parts of th

Since China’s economic reforms of the 1978，China’s grain production cost experienced two waves of rapid increase.The first wave occurred during 1986-1996，with production costs for each mu（1mu=0.0667 hectares）of paddy rice，wheat and corn up 16.2%，and the production cost per unit yield of main products up 14.6%on an annual average basis.During 1994-1996，in particular，production costs for each mu of paddy rice，wheat and corn and per unit yield of main products hiked by 29.3%and 29.5%respectively（see Table 4）.The second round of cost hike occurred during 2005-2013，with production cost for each mu of paddy rice，wheat and corn up 10.6%，and production cost per unit of main products up 9.6%on an annual average basis.Such cost increases are similar to the first round of cost hike during 1986-1993.Despite slowing grain production cost hikes per unit of area and yield since2014，overall costs of production remain high and are far above the level of developed countries such as the US.In 2015，the total cost of paddy rice per unit of yield in China was 46.6%higher than that of the US，and this figure was 29.7%for wheat，116.4%for corn and 110.1%for soybean.Overall，rapid grain production cost hikes in China over recent years stemmed from surging land and labor costs.During2005-2015，the production cost for each mu of paddy rice，wheat and corn increased by 8.9%per annum.Specifically，material and service costs grew by 7.1%，labor cost increased by 11.0%and land cost rose by 13.5%on an annual average basis.In comparison with the annual average growth rate（4.4%）of farming，forestry，livestock and fisheries sectors and the annual growth rate of cereal price index（4.8%），grain production cost increased the most during this period of time，and far exceeded the output growth of farming，forestry，livestock and fisheries sectors and the price index hike for paddy rice producers.As for the sources of cost growth，76.4%of growth in total costs for paddy rice，wheat and corn during2005-2015 can be attributable to production cost hike.Specifically，material and service costs account for 32.4%，human cost accounts for 44.0%，and land cost accounts for 23.6%of production cost hikes.Obviously，over two thirds of grain production cost hikes in China over recent years can be attributed to rising labor cost and land cost and these costs are generally inelastic.