Comments on Agricultural Modernization and Sustainable

DevelopmentKeijiro Otsuka

大塚启二郎Director, Foundation for Advance Studies on

International Development

部长，国际发展高等教育机构Chair, Board of Trustees of IRRI

国际水稻研究所理事长

Do Chinese Farmers Overuse Fertilizer?

Linxiu Zhang et al.: YesK.O.: I do not want to believe it.• Endogeneity of fertilizer use• Quality difference in fertilizer (Cross-sectio

nal price differences reflect quality differences.)

• Differences in crops, different production elasticities

• Labor elasticity = .02~.09. Land elasticity =.75

Sustainable Agricultural Development: More Products with Less Labor,

Water, Chemical Fertilizer, and Pesticide

1. Less labor: It is easy as labor can be substituted for by machines without affecting yield.

2. Less water: Since 60% of diverted water in Asia is used for paddy production, it is probably cost-effective to reduce water use in irrigated paddy fields. Currently 2 tons of water is used to produce 1 kg of rice. Technically 30% reduction is possible by seed improvement and water management methods now.

Continued

3. Less chemical fertilizer: This is a major challenge, as fertilizer is like “food.” Prices of chemical fertilizer are expected to increase rapidly. Site Specific Nutrient Management (SSNM) 30% reduction without affecting yield, but this is knowledge intensive. SSNM has nothing to do with overuse of fertilizer in China.

4. Less pesticide: Integrated pest management (IPM) 80-90% reduction.

Sustainable Rural Development: How to ensure sufficient income?

• Rural-to-urban migration, large mechanization, farm size expansion through rental transactions (Scott: 1ha, 2ha, 3ha?)

• I recommend 10 ha in 10 years. But if average farm size is 0.4ha, there are as many as 25 landlords per farmer.

• Rural industrialization is an option, given extreme urban congestion in China.