Research on the Moderate Scale Operation of Food

Junying WEI，Qing YU

School of Economics，Yangtze University，Jingzhou 434023，China

1 Introduction

For China as a populous country，food is undoubtedly fundamental to us.Food security has always been the top priority of thework of Chinese government，but the key to food security is food production.Since30 years of reform and opening up，China'sagricultural production and operation hasbeen dominated by household contract responsibility system，and farmers have been themain food producers.Under certain conditions，this system increased food production and stimulated farmers'enthusiasm for production，but in terms of the shortage of arable land，coupled with the recent rapid development of industrialization and urbanization，the phenomenon of migrant rural labor force is increasingly prominent.Rural land abandonment and shortage of agricultural workers not only present an enormous challenge to China's agricultural development，but also bring an important opportunity for the transformation of agricultural development to modern intensive agriculture.So，it is necessary to build new agricultural operation entities，and developmoderate scale agricultural operation.

2 The impact of inappropriate food scale

The term returns to scale arises in the context of a firm's production function.It explains the behavior of the rate of increase in output（production）relative to the associated increase in the inputs（the factors of production）in the long run.In the long run all factorsof production are variable and subject to change due to a given increase in size（scale）.Returns to scale focus only on the relation between input and output quantities.The laws of returns to scale are a setof three interrelated and sequential laws：Law of Increasing Returns to Scale，Law of Constant Returns to Scale，and Law of Diminishing returns to Scale.If output increases by that same proportional change as all inputs change then there are constant returns to scale（CRS）.If output increases by less than that proportional change in inputs，there are decreasing returns to scale（DRS）.If output increases by more than that proportional change in inputs，there are increasing returns to scale（IRS）.The so-called moderate scalemeans that in certain social and economic environment，land，labor，capital，equipment，management，information and other factorsof production achieve the best combination and efficient operation，and get the best economic benefits.Experts believe that under the current conditions of large-scale farming and appropriate scale operation，about 120 acres of land and 60 acres of land can be better in the northern and southern regions，respectively.

2.1 The impact of small-scale food productionFirst of all，the operation scale is too small and scattered；large advancedmachinery and equipment cannot be used，and farmers can just use themanual labor for cultivation；the degree of themodernization of agriculture is low；food production technology content is not high and the capacity is limited.Secondly，too small scale makes it hard to increase food output，so the unit product cost is higher，low profitmargins are unfavorable to increasing farmers'income，and the income gap between urban and rural areas will expand.Thirdly，most small operators are farmerswith low level of knowledge，and it is difficult for them to effectively grasp themarket information，leading to the blind production decisionsand extremely unstable agricultural production，which is not conducive to agricultural informatization.Fourthly，small｀scale operation makes food production low，and after deducting rations，farmers can just be self-sufficient，not to mention having spare products to enter themarket for sales.The rate of commercialization and industrialization of food is low.Fifthly，from the point of anti-risk ability，small operators are very fragile，and the ability to resist natural disasters，diseases，pests and market risk，is poor.Finally，small-scale agricultural production efficiency is low，so most of farmers give up farming and become migrant workers，causing abandoned land，which is very bad for food security.

2.2 The impact of large-scale food productionFirstly，too large scale could easily make some farmers landless and unemployed.Optimal scale requires a lot of labor transferred from food production，and if the scale is bigger，the labor accommodated will bemuch less，which will causemore farmers to lose the opportunity to get land income.Secondly，too large scale is likely to cause extensive operation.Moderate scale produces the highest yields，effective arable land management and highermanagement costs，easily leading to extensivemanagement and production decline.Thirdly，cost expenditure will greatly increase.Too big scalewill pose higher demands for supporting infrastructure，machinery and equipment，agricultural science and technology.It will inevitably increase the government fiscal subsidies，and increase the cost of production，leading to diseconomy of scale.Finally，management risk will increase.The larger scale means greater investment，and it will also pose higher requirements on the enterprisemanagement andmanagement decisionmaking.Under improper decisions and bad management，once themarket is volatile，the enterprise loss will be immeasurable.Therefore，we must stick to themoderate scale operation according to the law of diminishing returns，and gradually expand the scale until it reachesmaximum production efficiency under the constant condition of other production.Moderate scale operation is to achieve the lowest production cost，the highest factor utilization rates，and the best combination of labor，economic and technical benefits.In general，the moderate scale is dynamic，and we should adjust measures to local conditions and time.

3 The im pact ofmoderate scale operation of food

3.1 Improving land use efficiencyModerate scale operation of food will help improve land productivity and efficiency of resource allocation.Moderate scale operation can eliminate the ridge，change the original fragmentation of farmland，make the land concentrated，increase growing area of food，reduce the phenomenon of abandoned farmland，and improve the efficiency of land use.In addition，land after the concentration can be used for large-scalemechanized operation and improve agricultural production conditions.

3.2 Improving econom ic benefitsScale operators subcontract land from decentralized farmers，and through the efforts and careful cultivation of operators，the economic benefit ismuch higher than that of ordinary farmers.Scale dealers have negotiation skills in the purchase and sales of the products due to a large number，thereby reducing cost and improving efficiency.This economic benefit is the contractor's excess profit from the land use and land productivity increase，and the spillover effects of agriculture significantly improve agricultural efficiency.

3.3 Easing structural shortage of rural laborWith the acceleration of industrialization and urbanization，coupled with the relatively low earnings in agriculture，most of young adults choose to bemigrantworkers，and the elderly are left behind to be farmers.Most of these people use little land for the production of food rations，and the rest of land is idle，leading to more and more abandoned rural land.In recent years，after implementation of food moderate scale operation，the young labor forces in rural areas go into the city，and they can transfer the arable land to the new agricultural business entities，cooperatives and family farms，thereby eliminating the worry，and can make up for the adverse effects of transfer of rural labor on agricultural production，and make up for the adverse effects of urbanization on agricultural production.

3.4 Ensuring food securityTo solve the food supply problems，the first thing is tomake full use of existing land resources and do everything possible to improve land utilization.According to the survey of Chinese Academy of Social Sciences by Dang Guoying in 2013，food growers reachedmoderate scale operation，utilization rate will be increased by 10%.If the country is to achieve a scale of operation，it is likely to increase 100 million acres of land，and at least to increase food production more than 8%.Further，since the scale operation enhances the producers'pursuit of agricultural science and technology，the scale farmers havemore power to pursue science and technology，and have the ability to apply science and technology.Depending on the application and promotion of improved varieties，cultivation techniques，pesticide，fertilizer use and other new technologies，scale farmers are more effective in agricultural production.The average land productivity is generally higher than 10%of farmers.

4 Recommendations

4.1 Improving the rural land contract management system and promoting effective land transfer and concentration

Firstly，it isnecessary to strengthen the propaganda，andmake the farmers realize the necessity of land circulation，so that they can use land to increase income.At the same time，the grassroots cadres should enhance typical demonstration to drive farmers to be the"leader"of scale operation.Secondly，it is necessary to standardize the land circulation behavior，regulate the contract of land circulation，complete the transfer registration，timely release information，provide policy advice，and create good environment formoderate scale operation of food.Thirdly，it is necessary to make policy to stimulate the land circulation，further improve the system of land approval，allow land tomove freely in accordance with the law，encourage the developmentof rural cooperatives，establish the land circulation support funds，offer certain subsidy to farmers，support the rural migrant entrepreneurship，and give more help from the financial support，tax policy and technical guidance，

4.2 Innovating upon emp loyment service system and perfecting the rural social security systemFirstof all，it is necessary to focus on the developmentof service industry and breeding industry to provide more access to rural labor transfer，reduce farmers'dependence on farmland，and promote rural labor transfer to non-agricultural industriesand city.Secondly，it isnecessary to increase the intensity of training for farmers to gradually change their employment concept，improve their educational level and employment skills，and broaden employment.Thirdly，it is necessary to loosen the restrictions of the household registration system，break the barriers between urban and rural areas，establish a uni-fied，open，competitive and orderly integrated urban and rural labormarket，safeguard the rights and interests of urban migrant workers，and make them get the same jobs and employment rights as urban workers.Finally，it is necessary to gradually establish and perfect the system of rural social security，such as unemployment insurance，endowment insurance and cooperative medical care，and expand its coverage，dispel the concerns of farmers，and build a sound environment advantageous to the rural labor transfer and and moderate scale land operation.

4.3 Fostering new agricultural operators and intensifying policy supportFirst of all，it is necessary to provide special loans for new agricultural operators to reduce the financing cost and operating cost，and enhance the ability of scale operators to withstand market risks and major natural disasters.There is a need to further improve the system of policy-oriented agricultural insurance.Secondly，it is necessary to adjust the form of food subsidies，and give the direct subsidiesaccording to the sowing area，food production and food sales.Thirdly，it isnecessary to improve agricultural infrastructure to a certain extent，and provide a certain amount of direct subsidies to those who buy large agriculturalmachinery and irrigation facilities.Finally，it is necessary to further improve the comprehensive agricultural development，small water conservancy construction，land arrangement and management，commodity food base construction projectmanagement，strengthen overall coordination of the use of the funds for supporting agriculture，carry out the comprehensive improvement of farmland，construction of high standard farmland，and create conditions for the agricultural scale operation.

4.4 Building agricultural socialized service system and striving to improve service levelsIt is necessary tomake full use of public service，strive to build a new type of agricultural socialized service system，and promote the public welfare and business services.Government departments at all levels should accelerate the construction of agricultural service facilities，improve basic public welfare service environment，increase financial supportand improve the public service organizations to enhance the levelofagricultural servicesand achieve specialized services from planting to harvesting.

4.5 Deepening reform of the rural financial system and optim izing the agricultural financing environmentIt is necessary to give full play to the role of commercial banks，simplify loan procedures，increase agriculture credit，and give loans discount to scale operators，in order to reduce the costofborrowing.For rural financial institution innovation，we should encourage and develop new types of agricultural financial institutions such as small loan companies，increase farmers'capital support tomeet the needs of agriculture，farmers and village，build diversified rural financial system，andmake efforts to improve the levelof financial services.There is also a need to further improve the system of agricultural policy insurance to provide a strong guarantee to scale operatorsby increasing the coverage and premium subsidies.

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