Environmental and Economic Impacts of Chemical Fertilizer Use: a Case Study of the North China Plain

Environmental and Economic Impacts of Chemical Fertilizer Use: A Case Study of the North China Plain

Thesis

Presented in Partial Fulfillment of the Requirements for the Degrees Master of Arts and Master of Science in the Graduate School of The Ohio State University

By Jane Elizabeth Powell, B.A. East Asian Studies Interdisciplinary Program and Agricultural, Environmental and Development Economics

The Ohio State University 2018

Thesis Committee: Karen M. Mancl, Adviser Hongtao Yi H. Allen Klaiber, Adviser Sathya Gopalakrishnan

Abstract Since the 1960’s China’s agricultural system has gone through drastic changes. Modernization of this system necessitated adoption of key innovations, including new seed varieties, farm management practices, and the use of chemical fertilizers and pesticides. This thesis examines the impacts of three major transformations of China’s agricultural economy, including the Socialist Period, the Green Revolution, and the Reform Period. A production function was used to estimate the effect of different agricultural inputs, regions, and decades for China’s provincial grain production, including wheat, maize, and rice. The ordinary least squared estimates demonstrate the changes in China’s agricultural system in this period. The North China Plain’s (NCP) agricultural system was used as a case study, and demonstrated the changes in intensity of grain production from 1960-2016. Increasing chemical fertilizer use was found to be the most important change in China’s agricultural inputs, as changes in other inputs such as land, labor, and agricultural machinery were constrained. Chemical fertilizer use was found to be more effective for grain production in the NCP compared to other provinces. However, high or poorly balanced chemical fertilizer applications in this region has important environmental health consequences. This fertilizer intensive production is reinforced by Chinese farmers’ needs for ensured income and management practices introduced during the Green Revolution. China’s environmental policy has had limited success in addressing these problems.

Dedication

Dedicated to my father, Kevin Charles Powell

Acknowledgments

From the East Asian Studies Center, I would like to thank my adviser Dr. Karen Mancl for her profound support of my research process, and Dr. Hongtao Yi for his help in navigating Chinese data sources. From the Department of Agricultural, Environmental, and Development Economics, I would like to thank Dr. H. Allen Klaiber and Dr. Sathya Gopalakrishnan for their help in developing an interdisciplinary thesis.

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Vita 2011…………………………………………………..North Baltimore High School 2015………………………………………..B.A. Asian Studies, Bowling Green State University

Publications Powell, Jane. "Chinese Educational Reforms: Transition of an International Powerhouse." International ResearchScape Journal 2.1 (2015): 4. Powell, Jane. "Hiroshima’s Hibakusha: The Costs of Human Health in a Nuclear Age." International ResearchScape Journal 2.1 (2015): 1.

Fields of Study Major Fields: Interdisciplinary East Asian Studies and Agricultural, Environmental, and Development Economics

Table of Contents Abstract………………………………………………………………………………………….i Dedication……………………………………………………………………………………….ii Acknowledgments……………………………………………………………………………….iii Vita………………………………………………………………………………………………iv List of Tables…………………………………………………………………………………….vi List of Figures……………………………………………………………………………………vii Introduction………………………………………………………………………………………1 Chapter 1: China’s Green Revolution and the Environment…………………………………….3 The Socialist Period……………………………………………………………………...3 The Green Revolution……………………………………………………………………5 Reform Period……………………………………………………………………………7 Intensive Fertilizer Use…………………………………………………………….…….9 Environmental Impacts……………………………..……………………………………18 Policy and Local Response……………..………………………………………………..21 Chapter 2: China’s Agricultural Economy………………………………………………………32 Fertilizer, Land Use, and Efficiency……………………………………………………..32 Application Habits……………………………………………………………………….35 Long-Term Effects……………………………………………………………………….40 Methods…………………………………………………………………………………..43 Results……………………………………………………………………………………47 Discussion………………………………………………………………………………..52 Conclusions………………………………………………………………………………………70 References………………………………………………………………………………………..75 Appendix: Tables and Figures……………….….….….….….….………………………………81

List of Tables

Table 1: Categorization of Province Areas in (Cho, Chen, Yen, and English, 2007, p. 145)…...81 Table 2: Regressions of Grain Production (Grain Weight) on Agricultural Inputs and Conditions in China, 1960-2016……………………………………………………………………………..82 Table 3: Regression of Grain Production (Grain Weight) on Agricultural Inputs and Conditions in China, With and Without Provincial and Decade Variables, 1960-2016……………………..84

List of Figures

Figure 1: Average Chemical Fertilizer Consumption per Chinese Province (10,000 metric tons), 1960-2015………………………………………………………………………………………..86 Figure 2: China Average Provincial Grain Production (10,000 metric tons)…………………... 87 Figure 3: Percent NCP Grain Production of National Grain Production Based on Decade Averages…………………………………………………………………………………………88 Figure 4: Grain Sown Area (1,000 hectares) by Decade Average………………………………89

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Introduction

In December of 2017, an article title the Chinese newspaper, The People’s Daily, announced “no increase in chemical fertilizer and agricultural chemicals in China” (我国化肥农

药使用量零增长). The article noted that since 2015, according to a news briefing from the

Ministry of Agriculture, chemical fertilizer use has not increased, and chemical pesticide use nationally was also reduced (Chang Q. , 2017). The significance of this announcement lies in the complicated transformations that China’s agricultural system has gone through since the communist revolution. In the early 1950’s, China’s agricultural system was characterized by outdated methods and severely limited in the use of modern technologies. Modern agricultural innovations, such as chemical fertilizers, pesticides, and farm machinery were virtually non- existent. By the 1980’s, with the adoption of key innovations, China’s agriculture had begun to develop into a modern system.

China’s rapid agricultural development relied on three major transformations of the agricultural economy. The first was the communist government’s restructuring of the agricultural system, and promotion of intensification through scientific farming during the socialist period.

Second, was the introduction of new seed varieties, chemical fertilizers, and pesticides of the

Green Revolution. Third, was market liberalization and increased farmer autonomy in the

Reform Period. Through these changes, attitudes about agriculture have shifted, so that high production was prioritized over environmental health. In recent decades the high applications of chemical fertilizers shows increasing concern that it poses risks to environmental and human safety, contaminating soil and water supplies.

The North China Plain presents an excellent example of the effects of these transformations, both economically and environmentally. The intense production of wheat and maize in this region demonstrates the major changes in China’s agricultural economy. Intensive fertilizer application in this region, tied to lessons learned during the Green Revolution, demonstrated the changing attitudes towards agriculture’s relationship with nature. Reaching the

Ministry of Agriculture’s goals of reducing agricultural chemicals depends on understanding the long-term effects of these major transformations. Therefore, the objectives of this study are to explore fertilizer use in the North China Plain, and to analyze the impacts of fertilizer use on the environment and agricultural economy.

Chapter 1: China’s Green Revolution and the Environment

The People’s Republic of China began promoting intense agricultural development in the

1950’s. At the same time, an international development program, called the Green Revolution, was underway. The program was designed to transfer modern agricultural knowledge, practices, and materials to agricultural systems in less developed nations (Parayil, 2001, p. 971). By the

1960’s and 1970’s, China’s agriculture was impacted by the Green Revolution, but the strongest effects were not seen until the 1980’s One of the most important of these practices was chemical fertilizer use, a critical component of adopting the Green Revolution as a package. Farmers quickly learned that increasing fertilizer applications, in combination with other Green

Revolution techniques and materials, could guarantee larger yields. These other key technologies included high-yield seeds, chemical pesticides, agricultural machinery, and improved irrigation

(Parayil, 2001, p. 975). However, these improvements come at a cost, and intensive chemical fertilizer use has contributed to the pollution problems of China today.

The Socialist Period

One of the unique aspects of China’s Green Revolution was that its introduction coincided with the Socialist Period, from the 1950’s to late 1970’s. Unlike the agricultural sectors of many other Green Revolution nations, such as in India or Mexico, that were left to

“fend for itself” (Parayil, 2001, p. 975), much of the research showed that The People’s Republic of China was highly involved in the control of the agricultural sector. However, this period suffered from structural problems, which despite good intentions, contributed to an ineffective system.

During this period, many policies were adopted to encourage a more equitable and productive agricultural system. Huang et al. (2008) provided an analysis of China’s agricultural development. The authors described how communes were organized as a cooperative effort between farmers in the late 1950’s (Huang, Otsuka, & Rozelle, 2008, p. 475). In addition, rural populations were further restricted to agricultural labor through the Hukou system (户口), which is a citizen registration system that severely limited migration, and restricted farmers to their collective land (Huang, Otsuka, & Rozelle, 2008, pp. 476-477). Huang et al. (2008) also noted that agricultural markets and prices were controlled through the government. Because food supplies were not able to meet demand at the time, staple foods were sold by the government in urban areas, and rationed with coupons in rural areas (Huang, Otsuka, & Rozelle, 2008, p. 476).

Yu and Zhao (2009) similarly discussed the trends and implications of China’s agricultural development after the 1970’s. They found that agricultural prices were also suppressed to solve the “food problem”1 of China’s growing population, as an attempt to make food more affordable to the rural poor (Yu & Zhao, 2009, p. 639). Their argument is based on research by Schultz (1953), who argued that the “food problem” results when the agricultural sector become maladjusted to the overall economy in developing countries. The government is then forced to put more resources towards agriculture (Schultz, 1953, p. 3). Lin (1992) also described how under collectivism, prices were set by the government to purchase food under a quota system. Any production beyond these quotas could be sold on the open market at a different price (Lin, 1992, p. 36). In this period, communes also began to more intensively farm

1 Yu and Zhao reference the “food problem” as described in (Schultz, 1953) 4

cash crops, such as cotton, to help China’s industrialization (Huang, Otsuka, & Rozelle, 2008, p.

471).

Even with these highly involved policies, flaws in the system led to serious failings.

Huang et al. (2008) noted not enough food was produced to feed and support China’s growing population, culminating in the Great Leap Forward Famine from 1959 to 1961 (Huang, Otsuka,

& Rozelle, 2008, pp. 472-473).2 Schmalzer (2016) noted that the efforts of rapid development on the part of the communist government in the Great Leap Forward created “unrealistic production quotas” (Schmalzer, 2016, pp. 38-39), and left China in one of the most severe famines in world history. The Socialist Period changes were phased out eventually, with significant changes during the Reform Period of the 1980’s.

The Green Revolution

Research discussed two main events in the Green Revolution’s introduction to China.

The first was the development of new seed varieties, and the second was efforts to spread the package of agricultural knowledge, practices, and resources to less developed nations. Parayil

(2001) noted that new varieties of high-yield hybrid maize had already been adopted in the

United States by the 1930’s, and Norman Borlaug of the International Maize and Wheat

Improvement Center developed “miracle dwarf wheat” in the early 1950’s (Parayil, 2001, p.

974). 3 Parayil (2001) described how, in cooperation with American public agencies, private donor agencies, and other non-governmental organizations, these varieties were spread

2 Huang et al. (2008) cited (Aston, Hill, Piazza, & Zeitz, 1984) and (Chang & Wen, 1997)

3 Parayil (2001) cited (Kloppenburg, 1988) 5

internationally, to places such as China, India, and Mexico. The knowledge transfer of the Green

Revolution included not only encouraging rural farmers to adopt new grain varieties, but also practices to create efficient and modern agricultural extension systems. Extension of agricultural knowledge had to be adapted to China’s unique conditions, and in the end, changes to Fertilizer- intensive production processes were the most critical to development. Yu and Zhao (2009), in their literature review, found that because land is scarce in China, and the agricultural market was already saturated with labor, Green Revolution knowledge transfer relied heavily on the introduction of chemical fertilizers (Yu & Zhao, 2009, p. 637). Yu and Zhao (2009) referenced

Fan and Pardey (1997), who looked at the specific contributions of different agricultural inputs in China. They found from 1965 to 1993, 22% of the growth in agricultural outputs was from chemical fertilizers (Fan & Pardey, 1997, pp. 130-131). Farmers were encouraged to apply heavy amounts of chemical fertilizer at the same time they were introduced to high-yield crops.

China did not only receive foreign agricultural technology, but also contributed to their own Green Revolution though “scientific farming” (科学种田). “Scientific farming” refers to the socialist party’s own terminology for the adoption Green Revolution technologies, since the term

“Green Revolution” carried anti-socialist political connotations due to its foreign and capitalist origins (Schmalzer, 2016, p. 4). Scientific farming was organized so that peasants, technicians, and sent-down youth were expected to work on hands-on, intense experimentation at the local level. Academic research was de-emphasized (Schmalzer, 2016, pp. 28-31). Intense agricultural experimentation in the socialist period contributed to the discovery of hybrid rice in the 1970’s.

As Schmalzer (2016) described, the rice breeder Yuan Longping became a household name in

China after the discovery, and was promoted in socialist propaganda as the ideal “intellectual

peasant” (Schmalzer, 2016, pp. 73-74). The introduction of hybrid rice drastically changed the genetics of rice farming in China, and as Schmalzer concluded, “the story of hybrid rice was a perfect example of green revolution cultivated in red revolutionary soil” (Schmalzer, 2016, p. 79)

Reform Period

The Reform Period in the late 1970’s and 1980’s was a phasing out the more problematic policies of the Socialist Period. Although these reforms were not directly related to the Green

Revolution, they were critical in economic liberalization, opening the opportunity for the Green

Revolution to have a greater effect. As Huang et al. (2008) discussed, during this period communes were removed, and liberalization of the agricultural market allowed for greater allocative efficiency (Huang, Otsuka, & Rozelle, 2008, p. 484). Yu and Zhao (2009) noted that introduction of the “Household Responsibility System” in this period placed the freedom and responsibility of economic choices on individual farmers (Yu & Zhao, 2009, p. 639). They argued that reform of price policies helped drive rapid agricultural growth from 1978 to 1984

(Yu & Zhao, 2009, p. 640). Yu and Zhao (2009) cited Justin Lin (1992), where the author found that the “Household Farming Reform” accounted for 46.89% of total agricultural output growth

(Lin, 1992, p. 45). Even the PRC’s intense involvement in the agricultural system was reduced.

Jia et al. (2015) studied the effects of different knowledge training methods in China’s agricultural extension system. They noted that “the Chinese government decentralized its extension system from county agricultural bureaus to the township level” (Jia, Huang, Xiang, &

Powlson, 2015, p. 192). These changes helped to provide greater opportunities for agricultural development, but also reduced the central government’s control over the agricultural system.

The Reform Period also led to dramatic decreases in rural poverty. Wang (2013) argued that the combination of liberalized markets, more equitable land allocation between farmers, and the end of price suppression, all contributed to the faster development experienced until today

(Wang S. , 2013, p. 58). Despite problems of increasing income disparity between rural and urban populations in China (Yu & Zhao, 2009, p. 643) (Wang S. , 2013, p. 643), in general these reforms have led to improvements in farmer livelihoods. As Wang (2013) found, these changes led to over 1.1 billion people being lifted out of $1 to $2 per day poverty from 1981 to 2008

(Wang S. , 2013, p. 55). Yu and Zhao (2009), citing data from (The World Bank, 2008), also noted that net income of farmers increased from 133 yuan to 2,622 yuan from 1978 to 2003, an increase of about 20 times in 25 years (Yu & Zhao, 2009, p. 635). Reduction of poverty was seen as key to the success of the Green Revolution, as farmers gained the level of attainment necessary to adopt the entire package. This included paying for foreign plant varieties, using chemical fertilizers, and gaining access to knowledge training opportunities and improved local infrastructure.

Area studies and economic research provides conflicting views on what changes were ultimately responsible for China’s rapid development after the 1980’s. Ren (2013) noted that two schools of thought had emerged. First, in economics, neoliberalism argues that fast growth was caused by improved privatization, de-regulation, and decentralization as neoliberal policies. The second theory of “institutional arrangements,” from a more sociological view, pointed to context and historical conditions. Socialism had increased literacy rates and life expectancies, so China was better prepared for growth than other third world countries. Ren (2013) ultimately concluded

that a combination of both theories is best able to explain China’s post-1980’s economic development (Ren, 2013, pp. 3-8).

Intensive Fertilizer Use

In much of the research concerning China’s modern agricultural development, efforts were made to analyze both the historical context and the logic of farmers that contribute to the observed trends in agricultural practices. The choices and habits surrounding fertilizer applications were formed through various historical influences.

Several authors drew from the long-term implications of China’s agricultural history since the 1950’s. Broadbent (1976) discussed these historical transitions in Chinese agriculture as a shifting in attitudes towards the environment. The socialist period marked a move away from viewing agricultural practices as in harmony with nature, to being pushed to “wage war against nature” through the commune system (Broadbent, 1976, p. 415). Edmonds (1999) also found that under Mao’s leadership, the attitude was that all available natural resources should be exploited for economic gain, with little regard for environmental degradation (Edmonds, 1999, p.

640). This attitude had long-term effects on environmental health in China. As Harris (2006) argued, even in modern China the typical attitude was that “[the natural world] exists for the benefit of people” (Harris, 2006, p. 8).

Conquering nature for the sake of agricultural progress was promoted in state propaganda. Wu and Gaubatz (2013) referenced a quote from Mao Zedong, “[in] agriculture, learn from Dazhai.” This phrase was often used to encourage transformation of landscapes for agricultural needs. This was inspired by Dazhai village in Shanxi, where farmers overcame the hilly environment and dust storms through intensive work (Wu & Gaubatz, 2013, pp. 15-16). 9

Schmalzer (2016) also discussed the use of Dazhai in agricultural propaganda to encourage farmers to overcome local challenges to agricultural intensification. However, she noted that this ideology led to disastrous results in cases when methods from other climate regions were applied inappropriately (Schmalzer, 2016, p. 19).The strong governmental support of these changes in attitude were critical to the overall transformation into a modern agricultural economy.

Similarly, this transition meant increasing use of chemical fertilizers. Boradbent (1976) found that hardly any chemical fertilizer industry existed before the 1950’s (Broadbent, 1976, p.

416). Huang et al. (2008) made similar observations by viewing China’s agricultural development through Johnston and Mellor’s (1961) five criteria for assessment. These criteria refer to the five key roles that agriculture plays in development, including providing a labor supply for industrialization, producing low-cost food, growing crops that can be used towards economic production, supplying exports, and raising rural incomes (Huang, Otsuka, & Rozelle,

2008, pp. 467-468) (Johnston & Mellor, 1961, pp. 571-572). They described changes in the

Socialist Period in terms of increases in outputs, as well as the transition into cash crops (Huang,

Otsuka, & Rozelle, 2008, pp. 468-473). Huang et al. (2008), however, noted that significant inefficiencies in the system during this period led to the Great Leap Forward famine (Huang,

Otsuka, & Rozelle, 2008, pp. 472-473).

Despite these failures, many important steps were taken in the early Socialist Period that helped to rapidly modernize agricultural methods. Schmalzer (2016) discussed changes in agricultural science and farmer training under socialism. The communist party attempted to utilize local and foreign resources simultaneously by “turning intellectuals into peasants and peasants into intellectuals” in agricultural research. Schmalzer (2016) referenced the first

mention of three-in-one groups from the People’s Daily in 1958.4 These groups were established during the Great Leap Forward to encourage political leaders, agricultural technicians, and peasants to work together on research and testing (Schmalzer, 2016, p. 38). However, Schmalzer

(2016) found that the push for rapid modernization often developed contradictions in practice.

Chemical fertilizer use conflicted with the ideological efforts of propaganda. In interviews with former agricultural technicians, Schmalzer found a “tremendous effort” was put in place to encourage chemical fertilizer use and building of fertilizer plants in the 1960’s, leading to misapplication and safety issues, because farmers lacked proper education. However, organic fertilizer use was simultaneously promoted. Again referencing the People’s Daily, Schmalzer

(2016) noted that the state encouraged “relying mainly on farmers’ fertilizers … and secondarily on chemical fertilizers” (以农家肥为主，以化肥为辅)” (Schmalzer, 2016, pp. 115-118).5

Although the government tried to encourage farmers to use organic fertilizers, or “farmer’s fertilizers,” the low effort application and increasing affordability of chemical fertilizers were too attractive to farmers in the end (Schmalzer, 2016, p. 120). Schmalzer (2016) found that by the

1960’s and 1970’s, agricultural experiment groups improved their methods and were better able to adapt to local conditions. However, extension services and resources were still inadequate.

The local “self-reliance” often promoted in agricultural propaganda was problematic because it gave the government less incentive to provide adequate materials and education to extension systems and agents (Schmalzer, 2016, p. 148).

4 Schmalzer (2016) cited (Yun, 1958) 5 Schmalzer (2016) cited (Fēnxī xíngshì zēngjiā gǎnjǐn, 1959) 11

Broadbent (1976) provided insight into agricultural trends leading up to the 1970’s. The author argued that little attention had been paid to long-term environmental impacts until that time, and that government policy had largely focused on development issues (Broadbent, 1976, p. 421). Yu and Zhao (2009) reviewed development of Chinese agricultural practices since the late 1970’s by considering the various effects of technology adaptation, agricultural reforms, and demographic changes. Citing research from Brown (1995), they outlined that the physical inputs for agriculture include land, labor, capital, and fertilizers (Yu & Zhao, 2009, p. 635). Brown

(1995) argued that fertilizer and irrigation were the two key inputs that drove agricultural growth

(Brown, 1995, p. 85). Yu and Zhao (2009) similarly argued that because land was limited in agricultural areas of China, the largest option for increasing crop yields was intense application of chemical fertilizers (Yu & Zhao, 2009, p. 637). As Wu and Gaubatz (2013) noted, less than

11% of China’s total land area was actually arable (Wu & Gaubatz, 2013, p. 21). Yu and Zhao

(2009), using data from (Zhongguo Tongji Nianjian [China Statistical Yearbook]) found that from 1978 to 2002, grain outputs jumped from 305 megatons to 501 (an increase of 64%) in about three decades, despite land restrictions. They concluded that this intensification of application was a critical contributor to Green Revolution development (Yu & Zhao, 2009, p.

634).

Huang et al. (2008) further noted that the period leading to the 1970’s was characterized by stagnation. The government’s “policy regime” led to a “productivity trap” (Huang, Otsuka, &

Rozelle, 2008, p. 10). However, improvements in the agricultural system resulted in growth after the Reform Period, using competitive advantages, and limiting government market involvement to stimulate growth (Huang, Otsuka, & Rozelle, 2008, p. 13). Beyond liberalization of the

market, Huang et al. (2008) cited rises in productivity due to allowing individual farmers to make production decisions, and greater specialization of the agricultural economy (Huang,

Otsuka, & Rozelle, 2008, pp. 14-15).

Large increases in the intensity of chemical fertilizer use occurred after the 1980’s, when the strongest Green Revolution effects appeared. These changes were inseparable from major changes in the agricultural economy. Several authors focused on changes in agricultural intensification related to modern methods. Li et al. (2003) found in agricultural data from 1980 to 1999, that from 1985 to 1999, nitrogen, phosphorous, and potassium fertilizer use increased nationally (Li, Huang, & Cheng, 2003, p. 147). Nitrogen showed the highest trend of increase.

By 1999, nitrogen, phosphorus, and potassium levels were still inadequate on a national level in comparison to the recommended agronomic amounts. However, nitrogen use surpassing recommended levels was found to be concentrated in eastern China at the time. The authors demonstrated that chemical fertilizer overuse in eastern China became more and more serious over time (Li, Huang, & Cheng, 2003, p. 148). Edmonds (1999) similarly found major changes to both rural industrial and agricultural economies. In the 1980’s, rural industry began to develop rapidly and agriculture intensified, which led to increasing rural pollution. Edmonds (1999) found that while the Chinese government still encouraged organic fertilizer and pest control methods, use of chemical fertilizers and pesticides increased, leading to chemical fertilizer use at twice the world average per hectare by the 1990’s (Edmonds, 1999, p. 646).

Other authors showed some variation in the way intensive fertilizer use or excessive use was measured. Even appropriate use levels can vary between different types of land and application techniques. Much of the studies focused on nitrogen, and suggested application rates

below 200 kg/ha. Liu et al. (2003) analyzed the use of fertilizer and its effects on yield, specifically in Beijing. They concluded that applications above 120 kg/ha had almost no effect on yield, indicating that this level of application is the most efficient for the North China Plain

(Liu, Ju, Zhang, Pan, & Christie, 2003, p. 115). Ju et al. (2006) noted that local extension services promoted application rates of 300-390 for wheat/maize, 900 for greenhouse vegetables, and 450 kg/ha of nitrogen for apple orchards. Actual applications in the study averaged at 553 for wheat/maize, 1,358 for greenhouse vegetables, and 661 kg/ha for apple orchards (Ju, Kou,

Zhang, & Christie, 2006, p. 122). Wang et al. (1996) found that their estimated function indicated an optimal fertilizer application as 423.88 kg/ha for a mix of fertilizers (Wang,

Halbrendt, & Johnson, 1996, p. 292). However, the authors note that this estimation should be interpreted with caution because it depends on time series data. Chai et al. (2013) found that

Shandong was one of the provinces with the highest fertilizer overuse (Chai, et al., 2013, p. 20).

They also found that optimal nitrogen fertilizer application ranged from only 110-150 kg/ha

(Chai, et al., 2013, p. 20), and argued that applications above this level can contribute to greenhouse gas emissions. Jia et al. (2015) found that participating farmers were encouraged to maintain nitrogen fertilizer use at about 180 to 210 kg/ha for nitrogen (Jia, Huang, Xiang, &

Powlson, 2015, p. 194).

Modern farmer’s knowledge and application habits appear to be linked to methods learned in the Green Revolution. Working through existing agricultural extension systems in

Shandong, Jia et al. (2015) studied the effectiveness of knowledge training for improved nitrogen technologies (Jia, Huang, Xiang, & Powlson, 2015, p. 190). In their initial surveys, they found that farmers’ knowledge of fertilizer use was strongly rooted in the Green Revolution,

contributing to a belief that heavy nitrogen application is necessary for higher yields. Because of this, Jia et al. (2015) found that many farmers were applying chemical fertilizer at levels much higher than necessary. Higher meant over 300 kg/ha of nitrogen, compared to appropriate levels at 180 kg/ha in their study area (Jia, Huang, Xiang, & Powlson, 2015, p. 197). In contrast, Li et al. (2003) found that in Northeast China, the appropriate level of nitrogen and phosphorus fertilizer should be as low as 127kg/ha and 51kg/ha for rice production, and is 62kg/ha and 49 kg/ha for wheat production (Li, Huang, & Cheng, 2003, p. 146).

The effects of Green Revolution changes were not uniform, and were more important in some regions compared to others. Ju et al.’s (2004) literature review considered the main causes and implications of intensive nitrogen fertilizer use. They found that the intensity of application varies greatly between provinces across China. Citing data from (Editorial Committee of China

Agricultural Yearbook, 2001), some areas had shortages of nitrogen, while many provinces in the east used it excessively (Ju, Liu, Zhang, & Roelcke, 2004, p. 300). Ju et al. (2004) concluded that these high applications were partially due to problems in farmer education (Ju, Liu, Zhang,

& Roelcke, 2004, p. 304). In line with Jia et al.’s (2015) conclusion that habits were strongly rooted in the Green Revolution, they also found that the overall nitrogen balance surpluses began in the late 1970’s and increased over time (Ju, Liu, Zhang, & Roelcke, 2004, p. 301). Ju et al.

(2004) expanded their research beyond Jia et al.’s (2015) main focus on wheat, by including information about fertilizer use for a variety of crops. They found that fertilizer use not only varied between provinces, but also between types of crops. Excessive applications for grain production started in the 1980s, and in the 1990s for cash crops (Ju, Liu, Zhang, & Roelcke,

2004, p. 304). Similarly, Chen and Huffman (2006) found the structure of agricultural

development makes addressing these spatially dependent issues difficult. Much of the benefits and growth in agricultural development have been unevenly distributed. They found the spatial dependency of technical efficiencies created clusters of better access to technology, infrastructure, and labor exchange, while many counties with potential for development were left disadvantaged (Chen & Huffman, 2006, p. 166). Fertilizer use habits in this case are not simply due to a lack of farmer knowledge, but were influenced by their access to agricultural infrastructure and training.

Several studies showed that in these intensive fertilizer use cases, farmers often had little contemporary educational basis for their management decisions. Jia et al. (2015) discussed excessive nitrogen use as a result of misunderstandings created through Green Revolution practices. They argued that because of extension practices in this period, many farmers equated higher usage of fertilizer with higher yields (Jia, Huang, Xiang, & Powlson, 2015, p. 191). Chai et al. (2013) similarly pointed to fertilizer-dependent extension in the 1990’s as a cause of the misunderstanding that more nitrogen means more yields (Chai, et al., 2013, p. 23). Chai et al.

(2013) traced this misinformation to the farmers’ need to ensure their income. Farmers often overused fertilizer because they sought to ensure that they would receive the needed yields

(Chai, et al., 2013, p. 23). Cui et al. (2008) also noted that for the North China Plain, applications of nitrogen fertilizer beyond the crops’ requirements were commonly used to “insure” yields

(Cui, et al., 2008, p. 191).6

6 Cui et al. (2008) cited (Gao, Huang, Wu, & Li, 1999) and (Chen X. , 2003) 16

In China, poverty is considered a key determinant of continued environmental degradation. As Edmonds (1999) discussed, China’s government tends to blame poverty as the source of environmental problems, as it is often argued that cities would not be able to meet basic needs without environmental degradation (Edmonds, 1999, p. 647). The problem is especially found in rural areas, where wages are much lower. Harris (2006) argued that some explanation for apathy regarding the environmental costs of fertilizer use has to do with a history of rural poverty. Because people “want above all else to avoid deprivation…” economic interests take precedent (Harris, 2006, p. 10). Pan (2014) similarly argued that these sort of practices could be better mitigated if options for ensuring income for Chinese farmers were adopted, allowing them to take risks and reduce fertilizer use (Pan, 2014, p. 6658). An in-depth discussion of the role of rural poverty in China’s agricultural system is beyond the scope of this study, but several authors indicated that poverty is an important factor at least in farmer’s decision making processes.

An important topic in the discussion of intensive fertilizer use in the North China Plain is the maize-wheat double cropping system. Ju et al. (2004), briefly mentioned the heavy use of double cropping in the NCP area. Cui et al. (2008) presented the importance of double cropping to the agricultural system in much greater detail. The authors evaluated maize yields in relation to nitrogen fertilizer use in the North China Plain from 2000 to 2005, by comparing soil samples and yields from conventional fields and test fields without nitrogen application. They found that double cropping systems had an effect on the intensity of fertilizer use, methods, and their eventual environmental impacts (Cui, et al., 2008, p. 192). When maize was planted after the winter wheat harvest, and no additional nitrogen fertilizer was applied, maize could capture the

excessive nitrogen applied to the wheat before it progressed to lower soil levels (Cui, et al., 2008, p. 194). Even so, because the yields of both wheat and maize are critical to the farmers, excessive application for both periods continued to be the norm (Cui, et al., 2008, p. 191).7 In another study, Liu et al. (2003) examined the effects of nitrogen fertilizer use and crop yields, using a two-year field experiment in Beijing. The yields measured were based on the maize- wheat double cropping system. The authors found that application rates were intensified by applications in both planting periods. In addition, the intense irrigation needed by the double- cropping system exacerbated problems of nitrogen leaching into lower soil layers (Liu, Ju,

Zhang, Pan, & Christie, 2003, p. 118). Because of the wide-spread use of this maize-wheat double cropping system, especially in the NCP, understanding this system is critical for evaluating potential environmental effects.

Environmental Impacts

The environmental impacts of farming practices have been presented by several authors.

A common focus was to consider how intensive fertilizer use has impacted soil health. Cui et al.

(2008) found that high nitrogen application rates resulted in high levels of soil nitrate-N accumulation during the maize growing season. High levels of accumulation in both the top (0-

90 cm) and the lower (90-180 cm) soil layers indicated that nitrogen was being lost into the lower soil layers, and eventually contaminating the environment (Cui, et al., 2008, p. 192). Li et al. (2015) also found that farming methods that used higher fertilizer applications and more irrigation, led to more nitrogen accumulation in the soil, as well as losses (Li, Hua, Li, Heb, &

Zhang, 2015, p. 30). Li et al. (2003) presented chemical fertilizer use patterns nationally from

7 Cui et al. (2008) citied (Gao, Huang, Wu, & Li, 1999) and (Chen X. , 2003) 18

1980 to 1999. They described the problem of excess fertilizer application. First microorganisms use some of the nutrients, and the top layers of soil absorbed nutrients to its capacity. Any excess fertilizer runs off or leaches into lower soil layers resulting in non-point source pollution.

(Li, Huang, & Cheng, 2003, p. 146). This research has shown that when fertilizer is inappropriately applied, it can contaminate the local environment.

Because double cropping systems are commonly used in the North China Plain, it is understandable that environmental problems could be compounded by multiple, heavy applications every year. Ju et al. (2004) found that nitrogen mainly accumulated in the soil as nitrate, and leached into the deeper soil layers due to high nitrogen fertilizer application rates.

Intensive fertilizer use issues were described in their literature review as unbalanced nitrogen, phosphorus, and potassium applications, “unreasonable rotations” in multiple-cropping systems, and intense irrigation practices. In addition, in the North China Plain this leaching was enhanced by flood irrigation (Ju, Liu, Zhang, & Roelcke, 2004, pp. 301-302). Liu et al. (2008) also discussed the impacts of multiple-cropping systems, noting that excessive nitrogen fertilizer use was very common in the wheat-maize double cropping system (Liu, Ju, Zhang, Pan, & Christie,

2003, p. 112). They found that leaching of NO3-N “increases markedly” under high application of nitrogen. In addition, use of irrigation also contributed to NO3-N moving down to deeper soil layers (Liu, Ju, Zhang, Pan, & Christie, 2003, p. 118). Although high nitrogen fertilizer application had limited effect on NH4-N in lower soil layers, they argued that a strong presence of NO3-N in lower soil levels indicated high risks of nitrogen losses (Liu, Ju, Zhang, Pan, &

Christie, 2003, p. 116). Ju et al. (2007) similarly found that over-application lead to “substantial accumulation of soil nutrients such as NO3-N, [phosphorus], and [potassium],” especially for the

management practices used in greenhouses (Ju, Kou, Christie, Dou, & Zhang, 2007, p. 504).

They also noted that with higher application rates, soil salinity levels were higher (Ju, Kou,

Christie, Dou, & Zhang, 2007, p. 498). With these high levels of accumulation and changes in the soil profile, Ju et al. (2007) concluded that “this situation is so serious that the quality of soil, air and groundwater is deteriorating” (Ju, Kou, Christie, Dou, & Zhang, 2007, p. 504).

Water pollution is a common concern, as chemical fertilizers can be transported into and contaminate water sources. Economy (2007) found that over 75% of urban rivers were too polluted for drinking, or even fishing (Economy, 2007, p. 3). With the agricultural development of the past four decades, nitrogen and phosphorus eutrophication has increased markedly (Yu &

Zhao, 2009, p. 644).8 Ju et al.’s (2004) study pointed to mostly NCP provinces as having the most severe water pollution. Citing research from (Wang, Tian, Zhang, & Li, 1996), Ju et al.

(2004) found that in 2001, Shandong, Beijing, Tianjin, Hebei, and Shanxi provinces had about

46% of their groundwater samples exceeding World Health Organization (WHO) limits for safe

-1 drinking water (11.3 mg NO3-N L ) (Ju, Liu, Zhang, & Roelcke, 2004, p. 302). Ground water was also being polluted by surface water, hazardous waste, fertilizers, and pesticides. In the early

2000’s, 90% of the aquifers for cities were polluted, but national policies developed to improve water quality were often not locally enforced (Economy, 2007, p. 3). MacBean (2007) noted that a combination of industrial wastes, untreated sewage, fertilizer and pesticide run-off contributed to water shortages, killed fish, and reduced drinkable supplies. MacBean also found that “in rural areas one in three people lacks access to safe drinking water” (MacBean, 2007, p. 294). Zhang

8 Yu and Zhao’s (2009) literature review cited (Zhang, Wu, Ji, & Kolbe, 2004), (Yin, Yang, Shan, Li, & Wang, 2001), and (Liu, Wu, & Zhang, 2005) 20

et al. (2010) also noted that water contaminants, such as nitrate, nitrite, and chromium can also contribute to cancers in the digestive system (Zhang, et al., 2010, p. 1115)

The risks to water resources are especially problematic in the North China Plain, as the area is known for water shortages, which has increased with increasing local production and populations. The NCP has historically had problems with both drought and flooding, indicated by a saying, “big disaster is when it is raining hard, a small disaster is when it is drizzling, and drought comes when there is no rain” (大雨大灾，小雨小灾，无雨旱灾) (Huafu, Yunzhi,

Jueshu, Junfeng, & Chunyu, 2001, p. 47). As Koleski (2017) noted, “rapid urbanization in dry northern China, pollution, and increases in water demand have stressed existing groundwater supplies,” which required government investment in huge water projects to mitigate this issue

(Koleski, 2017, p. 20). Wang et al. (1996) studied contamination of groundwater drinking sources for Beijing, Tianjin, Hebei and Shandong provinces from 1993-1994. The authors similarly found greater contamination of rural drinking water resources. The authors argued that this was because rural areas rely on local groundwater sources, while cities had improved water infrastructure and more choices between sources (Wang, Tian, Zhang, & Li, 1996, p. 227). They concluded that the increasing and imbalanced nitrogen fertilizer use was the main source of contamination, and that this process had started in the 1980’s (Wang, Tian, Zhang, & Li, 1996, pp. 228-229).Pollution of water resources not only limits people’s access to safe drinking water, but also effects clean water availability for use in economic development.

Policy and Local Response

A common misunderstanding of China’s government is that Beijing has complete authoritarian power over both markets and individuals. However, China in reality has complex 21

interactions between state and private actors. While the state government has the power to create policy, research has shown that actual implementation of these policies remains complicated, and in many cases relies on cooperation from private actors. As Economy (2007) states, “the central government sets the country’s agenda, but it does not control all aspects of its implementation.”

While research considering government policies is limited for fertilizer use or agricultural consequences, strong discussions overall can be found on environmental policy.

Agricultural policy in the 1950’s and 1960’s was more focused on rapid intensification, and little concern for environmental effects. Broadbent (1976) described this mentality as “wage war against nature” (Broadbent, 1976, p. 415). Schmalzer (2016) discussed several important policy changes in the socialist period, and argued that agricultural science was inseparable from state ideology at that time. For example, because the foreign term “Green Revolution” subverted socialist ideals of politically-connected science, this agricultural development was referred to as

“scientific farming” (科学种田) (Schmalzer, 2016, p. 4). Schmalzer found that socialist period agricultural policy mostly focused on shaking up the agricultural system and pushing production beyond previous limits. She described how the government established the Rural Scientific

Experiment Movement (农村科学实验运动), where experiment groups were formed with peasants, “educated youth,” and politically appointed local cadres (Schmalzer, 2016, pp. 4-5).

Socialist goals meant that societal status needed to be evened out, so intellectuals would be sent to the countryside, and peasants were valorized in propaganda (Schmalzer, 2016, pp. 4-5). The

“educated youth” in this case were youth with some level of education who were sent to rural areas to work with peasants and technicians and meet state agricultural goals through scientific experimentation (Schmalzer, 2016, p. 154). Schmalzer (2016) found that for agricultural policy,

“the state further actively sought to create such hybridity with policies aimed at turning intellectuals into peasants and peasants into intellectuals, or at harnessing native and foreign resources to one yoke.” (Schmalzer, 2016, p. 37)

Another important policy of the socialist period was the Great Leap Forward, a mandate introduced in the 1960’s intended to push development “at the speed and geographic scale the world had never seen”. However, Schmalzer (2016) pointed out that the goals of this mandate were “unrealistic,” and forced rural industrialization at the expense of agricultural production, leading into the Great Leap Forward Famine (Schmalzer, 2016, p. 38). Schmalzer argued that this policy failure had lasting implications for future agricultural policy, and made farmers more wary of new government experiments (Schmalzer, 2016, p. 198).

By the 1960’s, evidence of environmental problems had already begun to appear, such as increasing resistance problems for pesticides, but agricultural development was still the key priority, so things changed little (Schmalzer, 2016, p. 55). However, as MacBean (2007) pointed out, environmental awareness began to increase in the 1970’s after two major disasters: black beaches and dead fish in Dalian, and contaminated fish being sold in Beijing (MacBean, 2007, p.

298). As both MacBean (2007) and Edmonds (1999) mentioned, the increasing awareness led to the first ever China National Conference on Environmental Protection in 1973, and finally the adoption of The Environmental Protection Law in 1979, and the full adoption in 1989 (MacBean,

2007, pp. 298-299) (Edmonds, 1999, p. 641). But even with this policy, actual implementation remained problematic. Planning in the 1970’s was controversial because many still believed the economy should be the main focus, and so the environmental policies were not very effective

(Edmonds, 1999, p. 641).

Several authors found some positive changes in policy since the 1970’s, such as in state ideology. These changes came as the environmental effects of previous intensive growth policies become more and more apparent. MacBean (2007) argued that China has moved from broad, vaguely worded laws to an increasingly “sophisticated” legal frameworks over the past 35 years

(MacBean, 2007). China had also set up a ministry, The State Environmental Protection

Administration (SEPA), now called the Ministry of Ecology and Environment, dedicated to environmental goals [Economy (2007), MacBean (2007), and Edmonds (1999). MacBean

(2007)]. SEPA had set up “Pollution Prevention Boards” at multiple levels of government, and has sanctioned power to evaluate compliance, enforce environmental law, and conduct surprise inspections (MacBean, 2007, pp. 299-300). SEPA set a bold plan in 2005 to introduce the

“Green GDP” campaign. It was intended to determine the cost of degradation and pollution nationwide. Ultimately, however, the program failed because of resistance from other state agencies (Economy, 2007).

China’s Five-Year Economic Plans are also used to indicate the changes in government attitudes concerning environmental health. Koleski (2017) examined the 13th

Five-Year Plan (2016-2020), and found that environmental efforts for the 12th Five-Year

Plan (2011-2015) were moderately successful when it came to industrial pollution.

Official Chinese data and independent research found the Chinese government largely met its 12th Five Year Plan targets for carbon emissions reductions (Koleski, 2017, p.

16). While actual implementation of environmental policy was limited in certain cases, others like Koleski (2017) points to some successes.

Limited discussion of policy specific to chemical fertilizer use was presented in research.

However, some environmental policy-focused articles refer to chemical fertilizer impacts with limited specificity. Huang (2011) argued that laws for chemical fertilizer pollution had many shortcomings, and that most environmental laws were focused on city and industrial sources

(Huang W. , 2011, p. 193). Another commonly referenced problem was lack of enforcement. As

MacBean (2007) argued, China “on paper” had progressive laws to protect the environment, but tended to be weak in practice due to corruption, conflicting goals and local problems, and “layers of administration” between Beijing and rural towns (MacBean, 2007, pp. 292-293). Economy

(2007) gave an example of the central government’s efforts to rapidly improve environmental conditions leading up to the 2008 Olympics in Beijing. While some success were seen in Beijing, the targets were not met in other major cities, because the officials in other provinces were not held to those policies (Economy, 2007, p. 1). Bold policies introduced by SEPA have had similar difficulties of actualization, especially since the ministry was understaffed and local officials had few incentives to comply (Economy, 2007, p. 6). As Koleski (2017) noted, local officials did not have proper incentive to enforce policy, as government evaluations of officials were based on

“economic growth and social stability” (Koleski, 2017, p. 17). Even if policy existed to address fertilizer pollution, enforcement often could not meet the goals.

Huang (2011) looked at agricultural subsidy policies. His research provided a unique perspective, because the results showed how China’s agricultural policy was even incentivizing fertilizer pollution to a degree. Huang (2011) noted that China’s government used a subsidy policy to support the chemical fertilizer industry and promoted agricultural development, called

“preferential treatment + price limits + subsidies” policies. In addition, to help with rural

poverty, policies were placed in 2003 to raise grain prices, provide income supplements, and establish chemical fertilizer use (Huang W. , 2011, p. 193).9 Xin et al. (2012) mentioned these subsidy policies as well, and noted that both fertilizer use and grain production increased rapidly after 2004. They argued that these results showed the policy was largely effective at inducing growth (Xin, Li, & Tan, 2012, p. 649). Li et al. (2014) argued that part of the reason these subsidies for farmers were so effective, was that they stabilized grain prices. This was an important step to improve farmer confidence in grains after the large drops in grain prices in the

1990’s Asian Financial Crisis (Li Y. , et al., 2014, p. 23). Using data analysis, Huang (2011) concluded that “preferential treatment + price limits + subsidies” policies were the root policy cause of excess fertilizer use. With these policies, increasing economic development and peasant salaries led to increasing fertilizer use (Huang W. , 2011, p. 194). Huang (2011) did not argue that subsidies to industry and transfers to peasants should be stopped, rather that transfer payments should be increased for peasants and carry stipulations for environmental sustainability

(Huang W. , 2011, p. 196).

Other studies showed mixed results for Chinese citizens’ reception of environmental policy. Public apathy towards these issues was common, especially for people like farmers, whose livelihoods were deeply affected by any changes to agricultural practices. Alternatively, environmental problems were a source of social unrest when citizens had direct experience.

Harris (2006) found in a review of public environmental concern surveys in China, that part of the problem was in the central government’s perceived authoritarian power, so people often had the attitude that “it’s the government’s problem” (Harris, 2006, p. 11). Schmalzer (2016),

9 Huang (2011) cited research from (Li & Qi, 2008) and (Leng & Leng, 2005) 26

referencing agricultural policy in general, found that just because the government held totalitarian control, it did not mean it did not struggle with convincing people to follow policies.

Tasks commanded by the government often conflicted with local conditions and values

(Schmalzer, 2016, p. 130). Harris (2008) added that rural and poor people were the least concerned about overall environmental health, and tended to be concerned about issues that affect them locally (Harris, 2006, p. 8). Even when the government sets environmental health as a priority, risks of resistance were on the local scale.

With the increasing threat of environmental disasters, such as the lake and fish contamination disasters in the 1970’s, more public interest in environmental health has emerged.

As Economy (2007) argues, environmental health was not considered an immediate problem to the Communist Party, but the threat of social instability due to environmental problems was

(Economy, 2007, p. 5). The author found that unchecked pollution led to an estimated 51,000 protests in 2005, sometimes resorting to violence if protests were not successful. Economy

(2007) argued that the biggest fear for China’s government was that environmental failures may instigate action for political change (Economy, 2007, p. 6). Economy (2007) did not give explicit detail about the targets of these protests, but other research suggests that environmental social unrest was mostly focused in educated, urban areas. Liu and Mu (2016) found that people in

China overall were apathetic about climate issues, but in urban areas and on the eastern coastline it was “a rather important social issue” (Liu & Mu, 2016, pp. 124-125). Similarly, environmental concern was dependent on whether a person had a higher education level, lived in a city, and how apparent environmental problems were in their area (Harris, 2006, p. 7). This may be some indication of the contrast between rural farmer’s attitudes and knowledge about the environment.

Agriculture and environmental health have an inseparable relationship, but how that relationship was perceived has changed over time. In China, the dynamics between humans and the environment have changed not only in the agricultural system, but also in industrialization, and more recently the rise of consumerism. Before the 1970’s, China used price suppression to address the “food problem” as an undeveloped country (Yu & Zhao, 2009, pp. 639-640).

However, with the rapid growth of agricultural production, China now faces the problems of a modern agricultural economy: the need to balance feeding a nation, providing raw materials for a growing economy, and retaining the health of the environment and its resources.

Research has shown that since the 1950’s, China has gone through many system changes including changes in technologies, legal structures, societal dynamics, national ideologies, and environmental policy. The role of the Green Revolution is difficult to discern in this case because this time period changed in so many other ways than just the introduction of new seed varieties and modern chemical fertilizer applications. For example, even though some of the Green

Revolution technologies were already present in the 1960’s, China’s unique approach to agricultural science complicated its introduction. China was unique in that its agricultural science system was inseparable from the politics of the Communist Party (Schmalzer, 2016, p. 4). As

Schmalzer (2016) showed, China’s brand of scientific farming produced exceptional results in some cases, and disastrous ones in others. Despite foreign intentions of preventing the spread of communism through the Green Revolution package (Schmalzer, 2016, p. 3), China was able to pick and choose aspects that fit into state ideology and goals for agricultural development.

Similarly, the strongest adoption of the Green Revolution innovations occurred in tandem with

China’s reforms in the 1970’s and 1980’s. The market was liberalized, communes were

disbanded and farmers became more individually responsible for production, the market for chemical fertilizers became more widely available, and new seed varieties were spreading.

China’s agricultural system changed from multiple angles, so what could be considered the

Green Revolution in this context depends on a variety of factors.

From an environmental health standpoint, the most important of these changes was the strong emphasis on production. Prioritizing production as an immediate goal allowed for environmental health concerns to be pushed to the side, resulting in the modern idea that “[the natural world] exists for the benefit of people” (Harris, 2006, p. 8). China has been able to maintain its scarce arable land for thousands of years using uniquely balanced traditional practices. Complex systems were developed to return nutrients to the soil naturally, even using nightsoil collected from the cities as organic fertilizer (Xue, 2005, p. 42). With the change in the attitudes towards the natural world, these traditional ties have been broken, risking environmental health in favor of a production first attitude. Although China is certainly not the only country struggling with the risks that come with modern agricultural systems, the problems is accentuated by other major sources of pollution and contamination of resources.

Addressing these environmental impacts are problematic from a policy standpoint. The research has shown a mix of apathy and anger from the public regarding environmental problems. These conflicting relationships make it difficult to create incentives for the government to act, and incentives for the population to cooperate. The prioritization of continued economic growth will continue to pull government resources away from any environmental goals that are developed. Even as agencies like SEPA are adopted, and independent NGO’s emerge, policy has been shown to have limited real-world success. Instead, environmental policy has

long existed in name only in large scale problems, while action has only been taken in small- scale, immediate problems. The effectiveness of government intervention has therefore been focused on those issues most easily identifiable to the public, because environmental problems become a concern only when they are clearly visible, such as in the case of the black beaches in

Dalian (MacBean, 2007, p. 298). Because the environmental problems of unbalanced fertilizer applications work through non-point source pollution, and are not immediately visible to the general public, addressing this issue will not be a highly held priority, and will remain difficult to enforce.

Looking back on China’s rapid development since the 1950’s, research has shown that the three major transformations had impacted the current agricultural system. In the Socialist

Period, promotion of scientific farming and overall intensification led to changes in the agricultural system’s relationship with the environment. The Socialist Period, therefore, marked a divergence from the traditional farming that had characterized China for centuries. Even as concerns rose for the environmental costs of this new relationship, the trend of “war against nature” (Broadbent, 1976, p. 415) continued as a legacy of this transformation. Despite failings such as the Great Leap Forward famine, the combination of new Green Revolution technologies and a government priority for modernization, led to rapid increases in production. This relied on adjusting farm management practices, which have allowed China to reach many of the goals of a modern agricultural economy. The Reform Period marked the beginning of China’s unique combination of socialism and market economy. Choices of farm management were returned to farmers, who entered the new liberal market backed by their experiences and lessons from the

Socialist Period and armed with Green Revolution technologies. An understanding of China’s post-1950’s agricultural history provides a necessary perspective of unique farming conditions.

Chapter 2: China’s Agricultural Economy

Any discussion of China’s economic development would not be complete without special attention to agriculture, as China has been an agrarian society for centuries. Traditional agricultural history was marked by adoption of key innovations, such as plows (Parayil, 2001, p.

975), and a complex system of manure collection and application (Xue, 2005, p. 42) , which had dramatic improvements in societal and economic development. These innovations were historical markers of development. A more recent set of innovations has marked development in the modern era: The Green Revolution.

Green Revolution efforts from foreign agencies relied on the importance of agricultural development in overall economic development (Parayil, 2001, p. 971). Diffusion of Green

Revolution innovations were seen as a way to prevent the spread of communism during the Cold

War, by improving the conditions of the rural poor in developing nations (Schmalzer, 2016, p.

3). At the beginning of this revolution, China’s agricultural system was clearly lagging.

Traditional methods, backwards policies, lack of farmer training, and most importantly, limits to available arable land, were serious constraints to adequate outputs to feed a growing population.

The objective of this study is to demonstrate that out of the entire Green Revolution package, introduction of chemical fertilizers and their associated application methods was one of the important contributors to Green Revolution economic changes in China. However, these advances were not adopted without costs, both economically and environmentally.

Fertilizer, Land Use, and Efficiency

One of the long-lasting effects of the Green revolution package in China was the introduction of chemical fertilizers. In China, fertilizer was the most easily adjusted agricultural

input because land was limited by small plot sizes. Yu and Zhao (2009) found that with limited ability to increase arable land, fertilizer presented an important opportunity for further agricultural progress (Yu & Zhao, 2009, p. 637). Zhuo and Huffman reached similar conclusions.

They succinctly stated, “in China, land is scarce and labor is abundant” (Chen & Huffman, 2006, p. 152). The average farm size in China has often been less than a hectare (Yang, Huang, Zhang,

& Reardon, 2013, p. 1255), less than 2.5 acres. In addition, even those 2.5 acres of land are very fragmented because of the way Chinese villages divide farmland between farmers. Even agricultural machinery that was already in use in the US was inappropriate for China. As Cho et al. (2007) found in their study of the spatial variation of agricultural input elasticities, many areas of China could not easily adopt farm machinery due to hilly terrain. North and northeast China, which includes the NCP, is an exception with its relatively flat farmland (Cho, Chen, Yen, &

English, 2007, p. 150). Machinery is also not very efficient to use for many farmers because of their fragmented allocation of plots. With the combination of limited land, machinery, and an already saturated labor market in much of China, chemical fertilizer was the most appropriate option to increase yield during the Green Revolution.

With China’s Green Revolution and Reform Period policy changes, production increased, launching China into a level that would be expected of a “modernized” agricultural economy.

Huang et al. (2008) demonstrated that from the 1970’s to the 1980’s, the growth rates of the agricultural economy jumped. The authors found that overall grain production increased 4.7% yearly from 1978 to 1984. Production for rice, wheat, and maize specifically grew by 4.5, 8.3,

and 3.7% in the same period (Huang, Otsuka, & Rozelle, 2008, p. 479).10 Yu and Zhao (2009) similarly found that from 1978 to 2007, grain outputs (wheat, maize, and rice) increased by 64%, or 305 megatons to 501 megatons of production.11 As they stated, “the yields of maize and wheat almost tripled, and the yields of rice almost doubled in China from 1965 through 2002” (Yu &

Zhao, 2009, p. 634). Because of these results, Yu and Zhao (2009) concluded that “fertilizer is the largest contributor in physical inputs to agricultural growth in China,” noting that this input explained “21.7% of the agricultural growth from 1965 to 1993” (Yu & Zhao, 2009, p. 637).

Fertilizer is discussed as one of the most important contributors to this rapid growth. After the introduction of chemical fertilizers during China’s Green Revolution, fertilizer application rates increased to push these high yields. As Li et al. (2012) noted, “nitrogen [fertilizer] plays an important role in grain production in China. Since the 1950s, grain production has increased greatly with increasing [nitrogen] consumption” (Li, He, & Jin, 2012, p. 1193). The introduction of nitrogen and other chemical fertilizers was a critical part of increasing production.

However, research has shown that the increasing rate of fertilizer application has led to decreasing returns on outputs. Li et al. (2012) found that the partial factor productivity of nitrogen fertilizer decreased from 1000 kilograms of grain per kilogram of nitrogen in the

1950’s, to only 100 kilograms in the 1970’s, and has continued to decrease at a steady pace. By

2008, partial factor productivity was as low as 30 kilograms of grain (Li, He, & Jin, 2012, p.

1196). Li et al. (2012) noted that this decrease in partial factor productivity was “partially due to the increase in [nitrogen] application rate” (Li, He, & Jin, 2012, p. 1193). In recent years,

10 Huang et al. (2008) used data from (Annual Yearbook) and (Annual Agricultural Yearbook) for regression analysis. 11 Yu and Zhao used the (National Bureau of Statistics of China, 1978-2007) as their data source. 34

however, fertilizer use in grain production has begun to be overshadowed by vegetables, as

China’s consumer preferences have changed. Xin et al. (2012) found that from 1998 to 2008, fertilizer use increased 31.9%. In this time period, the increase in vegetable and fruit production accounted for 71.6% of the total increases in fertilizer use. However, grains still accounted for

16.3% of the increase (Xin, Li, & Tan, 2012, p. 646). In comparison to other types of crops, Xin et al. (2012) found that fertilizer use for grain had even decreased in the eastern provinces. These decreases were largely due to decreases in grain sown area, and not so much from changes in application habits (Xin, Li, & Tan, 2012, pp. 647-648, 651). Even so, Wang et al. (1996) argued that that chemical fertilizer use will continue to grow because of yield responses and increasing fertilizer supply (Wang, Halbrendt, & Johnson, 1996, p. 293). While fertilizer applications have become less effective, the demand for high applications continues to fit production goals.

Application Habits

With the increasing application rates and limited effect on overall outputs, concerns that fertilizer was being used in surplus widened. Yu and Zhao (2009) stated as fertilizer use increased, the Diminishing Law of Marginal Return came to regulate Chinese agriculture (Yu &

Zhao, 2009, p. 637). Wang et al. (1996) studied the impacts of fertilizers and communes on grain production in China. They found evidence of diminishing marginal impact of increasing fertilizer applications from 1952-1993 (Wang, Halbrendt, & Johnson, 1996, p. 292). While Li et al. (2012) showed that this was not necessarily true of all provinces across China, they found evidence that the problem had become especially important in areas of intense agricultural focus (Li, He, &

Jin, 2012, p. 1191). Cho et al. (2007) also found strong spatial disparity in the efficiency of different agricultural inputs. Using a geographically weighted model, the authors calculated the

elasticity of land, labor, fertilizer, and mechanical power for the gross value of agricultural outputs in seven regions of China. Their provincial categorizations are shown in Table 1. Their classification of North China roughly corresponds to the area described as the North China Plain.

North and central China indicate the highest elasticities for fertilizers. While eastern, southwest, and northwest China all show relatively low elasticities for fertilizer inputs (Cho, Chen, Yen, &

English, 2007, p. 150).

The problem of fertilizer over-application stems from unbalanced application of nitrogen, phosphorous, and potassium. Li et al. (2012) found that over 37% of nitrogen fertilizer, approximately 10.6 million tons, in 2008 was in surplus, which only contributed to pollution by leaching into the ground (Li, He, & Jin, 2012, p. 1195). Xin et al. (2012) also found that the spatial patterns of fertilizer use has been changing over time. From the 1998-2008 period, consumption of chemical fertilizer has been moving out of the east, and into central and western

China (Xin, Li, & Tan, 2012, p. 648). Even with these changes, other research has shown that provinces such as those in the NCP still have problems with intensive fertilizer use. The appropriate level of application for different soil types, climates, and crops has been studied extensively from a scientific view. Examples of this sort of research include Liu et al. (2003), Ju et al. (2006), Chai et al. (2013), Jia et al. (2015), and Li et al. (2003). The problem is that while the knowledge exists, transfer to farmers and extension agents has become problematic. These application habits lead to serious long-term consequences for China and its farmers.

Research showed a variety of conditions that impact farmer choices for fertilizer use. As

Jia et al. (2015) discussed, during the Green Revolution, farmers were often encouraged to rely on chemical fertilizers. Because of this, misinformation about fertilizers has been widespread. As

Jia et al. (2015) noted that almost 44% of farmers mistakenly believed that fertilizer use would lead to high yields without any limit in wheat production. Their results showed that farmers in the study area relied too much on their experience during the Green Revolution, when they concluded it was always appropriate to apply high rates of fertilizer to achieve high yields (Jia,

Huang, Xiang, & Powlson, 2015, p. 196). For years, extension efforts were devoted to encouraging the adoption of chemical fertilizers, and the necessity of their use became ingrained in how farming families looked at agriculture. It was necessary to emphasize the importance and potential of the highly effective chemical fertilizers, because they were necessary inputs for

Green Revolution high-yield crops (Parayil, 2001, p. 975).

In their literature review, Chai et al. (2012) found that with little social security opportunities available to the rural poor, application habits have inadvertently become a way for farmers to “insure” high yields, and their incomes (Chai, et al., 2013, p. 23).12 This is partially involved in urban-rural income inequalities, exacerbated by the Hukou system limiting options for labor migration (Huang, Otsuka, & Rozelle, 2008, p. 476). In their study of the labor composition of China’s rural populations, Mohapatra et al. (2005) found that rural development has contributed greatly to a gradual transition to more complex rural industry employment

(Mohapatra, Rozelle, & Huang, 2005, p. 1037). Mohapatra et al. (2005) found a strong decrease in agriculture’s share of rural occupations from 1988 to 1995, and an increase in more complicated occupations, such as local rural industry. This translates to increases in rural wages

(Mohapatra, Rozelle, & Huang, 2005, p. 1047). Yang et al. (2013) similarly noted that the introduction of the household responsibility system in the Reform Period, led to a decline in the

12 Chai et al. (2013) cited (Ma, 1999), (Zhao, 2006), and (Ju, et al., 2009) 37

rural population working in agriculture, from 95% in 1978 to only 65% in 2010 (Yang, Huang,

Zhang, & Reardon, 2013, p. 1246).13

Even as rural wages changed, citizens are disadvantaged when it comes to public services and welfare. Wang (2013) found the rural population relied on meagre and unstable social services up to the late 2000s and also relied on social support provided by neighborhood communities (Wang S. , 2013, p. 57). With lack of social insurance, farmers essentially had no guaranteed income. In addition, China’s unique mix of capitalist and socialist market controls made creating incentives difficult. Farmers have land use rights given by the state for a certain period of time, but the permanent ownership rights are held collectively. As Wang et al. (1996) argued, collective land ownership is problematic for application because farmers only have the incentive to think of the short term in their decisions. Wang et al. (1996) cited research from

Zhang and Makeham (1992), who found that farm land markets have changed drastically since the 1940’s, mainly because land is no longer seen as means for a way of life, but as an opportunity for gaining wealth (Zhang & Makeham, 1992, p. 153). Farmers are therefore more likely to choose short-term outputs over long term land health (Wang, Halbrendt, & Johnson,

1996, pp. 294-295). Farmers must make rational decisions given their own interests, but have less concern for long-term effects.

Pressures to not only feed the nation, but also support industrial development, made it difficult for farmers and extension agents to reduce the intensity of production. Using data from the (Annual Yearbook), Yu and Zhao (2009) found that from 1978, the total population in China increased from 963 million to over 1.3 billion, or a 37% increase in just less than 30 years.

13 Yang et al. (2013) cited research from (Lin, 1992) 38

Meanwhile, the already limited available agricultural land had decreased from 120 to 105 million hectares for grain. This loss was caused by the expansion of China’s cities, or by the land becoming unsuitable for farming due to human activities and pollution (Yu & Zhao, 2009, p.

634).14 Huang et al. (2008) also found that most of the farms surveyed in 2007 were smaller than those in the 1980’s (Huang, Otsuka, & Rozelle, 2008, p. 3). Land availability is an important consideration in fertilizer use habits. As Xin et al. (2012) found, grain sown area had a large impact on fertilizer use, and more and more former grain land was being used for vegetables, tea, and fruit. Grain fertilizer use is more affected by grain sown area than fertilizer use per sown area. In addition, they concluded that increases in grain sown area explained 76.4% of growth in grain fertilizer consumption from 1998-2008 (Xin, Li, & Tan, 2012, p. 651). The agricultural system was being stressed to produce more while farmers were being limited by increasing constraints.

With these strains, it was difficult to convince farmers to take the perceived risks of changing applications. Huang et al. (2008) found this problem was accentuated because contemporary extension agents are often poorly trained and funded (Huang, Otsuka, & Rozelle,

2008, p. 494). Jia et al. (2015) noted that, after extension systems were decentralized in the

Reform Era, extension staff became reliant on local governments rather than the central state for their funding. Because of this, extension agents had little incentive to address national environmental goals, and in many cases agents are forced to engage in commercial activities, such as selling seeds or fertilizers, to secure their payroll (Jia, Huang, Xiang, & Powlson, 2015,

14 Yu and Zhao (2009) cited research from (Rozelle, Veeck, & Huang, 1997) and (Brown, 1995). 39

pp. 192-193).15 These commercial activities indicate that a lack of adequate support and resources for extension services forces agents to engage in the business side of agriculture (Jia et al. 203). Here, the strong economic pressures on both extension agents and farmers can cause both to favor the “safety” of high fertilizer application rates.

Long-Term Effects

Choices for fertilizer application are ingrained in the knowledge-base of China’s farmers.

Conversely, problems from intensive fertilizer use can feed back into the costs of farm management. From the most basic view, unbalanced fertilizer use is a waste of inputs. Research shows that farmers are applying too much nitrogen, and not enough potassium and phosphorus.

Wang et al. (1996) noted that nitrogen fertilizers were the most widely produced and imported in

China. Since the 1970’s use has not been well balanced with potassium and phosphorus, reducing nitrogen response (Wang, Halbrendt, & Johnson, 1996, p. 293).16 Li et al. (2012) found that although grain production has increased since the Green Revolution, the partial factor productivity of nitrogen fertilizers has decreased rapidly (Li, He, & Jin, 2012, p. 1193). The decrease in partial factor productivity was problematic because farmers were receiving less grain outputs in response to increasing nitrogen inputs. As Yu and Zhao (2009) argued, improvement of this problem mostly relied on the development of human capital for farmers, because the

Green Revolution agricultural production was more complicated than the traditional system.

Therefore, farmers needed more knowledge to manage production (Yu & Zhao, 2009, p. 641).

Without continuing education through agricultural extension, it was difficult for farmers to keep

15 Jia et al. (2015) cited (Zhi, Huang, & Zhang, 2007)

16 Wang et al. (1996) cites research from (Stone, 1986), (An, 1989), and (Smil, 1993) 40

up with the demands of increasingly complex agricultural knowledge. As Jia et al. (2015) showed in their study, adjusting to more efficient and well-planned application methods, was estimated to lead to “economic gains of over US $200 per hectare” (Jia, Huang, Xiang, &

Powlson, 2015, p. 190). The method they introduced was called “Improved Nitrogen

Technologies,” and was intended to help farmers determine the most appropriate fertilizer applications for their conditions (Jia, Huang, Xiang, & Powlson, 2015, p. 190). Reducing application rates has benefits. However, limited knowledge resources and an overburdened extension system, made it difficult to create change.

Farmers were indirectly disadvantaged by the growth they contributed to. As more and more farmers adopted the recommended systems of planting, production increased, and contributed to overall economic growth. As Huang et al. (2008) emphasized, after the 1980’s

China began to shift away from its agricultural-based economy to an industrial one (Huang,

Otsuka, & Rozelle, 2008, pp. 481-482). Mohapatra et al. (2005) found that the makeup of labor allocations in China shifted away from traditional agriculture to more complex occupations

(Mohapatra, Rozelle, & Huang, 2005, p. 1025). Even as wages and living standards rose in the urban centers, farmers were relatively left behind. The rural poverty rate decreased and incomes increased since the Green Revolution (Yu & Zhao, 2009, p. 635)17 (Wang, Yang, & Zhang,

2011, p. 83). However, as Yu and Zhao (2009) noted, income disparity had substantially increased between farmers and urban residents since 1984 (Yu & Zhao, 2009, p. 643). Farmers were not proportionally benefitting from the growth in the agricultural system.

17 Yu and Zhao cite data from (The World Bank, 2008). 41

Water pollution in China is affected by non-point source pollution, which is essentially leaching of excess fertilizer or pesticides into the soil system, eventually reaching major bodies of water. As for soil pollution, Jia et al. (2015) found excessive nitrogen fertilizer (N-fertilizer) use lead to soil acidification in China, which had major implications for the sustainability of grain production (Jia, Huang, Xiang, & Powlson, 2015, p. 190).18 Soil erosion, which can also be connected to the effects of intensive farming activities, now affects over 19% of China’s land area (Wang, Yang, & Zhang, 2011, p. 85). Environmental problems can affect the livelihoods of farmers and opportunities for production in the long-term. Polluted water limits available fresh and clean water sources for rural farmers to not only use on their crops, but also for their own safe personal consumption. Soil acidification, chemical accumulation, and soil erosion will mean less land will be available for farming in the future (Wang S. , 2013, pp. 60-61). Wang et al.

(2011) described the “vicious cycle” of the “poverty-environment trap,” meaning that poverty in rural areas contributes to environmental pollution because the rural poor have less opportunities, means, and incentives to prevent it. In the cycle, pollution eventually causes further harm to rural populations (Wang, Yang, & Zhang, 2011, p. 78). Wang et al. (2011) continued that these effects are spatially dependent, as the ability to prevent and cope with these consequences relies on local

“economic prosperity” (Wang, Yang, & Zhang, 2011, p. 85). These consequences should be considered as a cost to Green Revolution-led agricultural development in China.

18 Jia et al. (2015) cited (Guo, et al., 2010). 42

Methods

Data on China’s agricultural system is analyzed from 1960-2016. Panel data was collected from the China Statistical Yearbook using China Data Online (All China Marketing

Research Company, Ltd, 2018). The dataset is separated by 27 provinces and autonomous regions, and 4 municipalities. For convenience, when grouped together all 27 provinces and autonomous regions, and 4 municipalities are referred to as “provinces” and not distinguished.

Data includes yearly statistics of agricultural conditions, including weight of grain outputs

(including maize, wheat, and rice), total power of agricultural machinery, irrigated farm area, consumption of chemical fertilizers, and the total sown area of grain crops.

The models used assumes that farmers make choices to maximize their profits. Both the revenue from grain yields and the costs of farm management depends on these choices, so farmers are able to maximize profits by choosing agricultural inputs.

휋 = 푓(퐺푟푎𝑖푛, 풂품풓풊풄풖풍풕풖풓풂풍 풊풏풑풖풕풔)= 푟푒푣푒푛푢푒 − 풄풐풔풕풔

Farmers are also assumed to be price takers, and because they take both grain (output) and agricultural input prices as given, farmers are concerned with making choices about outputs and inputs for profit maximization (Varian, 1992, p. 25). In the absence of data on grain prices and agricultural inputs costs, this study is concerned with farmer’s choices for agricultural inputs, and the resulting effect on outputs:

휋 = 푃푌 − 푪풐풔풕풔

Where Y is grain yields, P is grain prices, and Costs are costs to farmers for agricultural production. Costs to farmers are a function of the costs of agricultural inputs, including fertilizer, seeds, machinery, fuel, irrigation, pesticides, and land leases for example:

퐶표푠푡푠 = 푓(푓푒푟푡𝑖푙𝑖푧푒푟, 푠푒푒푑푠, 푚푎푐ℎ𝑖푛푒푟푦, 푓푢푒푙, 𝑖푟푟𝑖푔푎푡𝑖표푛, 푝푒푠푡𝑖푐𝑖푑푒푠, 푙푎푛푑 푙푒푎푠푒푠)

Grain yields depend on a certain combination of agricultural inputs:

푌 = 푓(풂품풓풊풄풖풍풕풖풓풂풍 풊풏풑풖풕풔)

Based on the function of grain yields and agricultural inputs, this research measures the effects of several agricultural inputs on yields, including total power of agricultural machinery, irrigated farm area, consumption of chemical fertilizers, and the total sown area of grain crops.

Because China encompasses a large geographic area, with many different climate, soil, and topography conditions between regions, analysis also controlled for differences between provincial grain productions. The main research interest is in the North China Plain, so conditions in this region must be controlled for as well. The function below is used as a basis to model grain production in China:

(1) 푌 = 훽0 + 훽1퐹 + 훽2푀 + 훽3퐼 + 훽4푆 + 휷풑푷 + 휷푫풕

Where Y is the yearly grain production in 10,000 metric tons, β0 is the constant, F is consumption of chemical fertilizers in 10,000 metric tons, M is agricultural machinery in 10,000 kilowatts, I is irrigated area of farmland in 1,000 hectares, and S is total sown area of grain crops in 1,000 hectares. P is the individual effects of all 30 provincial binary variables. The dataset had 31 provinces. The thirty provincial binary variables are fixed effects that control for differences in agricultural conditions between provinces. 44

Seven provinces were in the North China Plain: Beijing Municipality, Tianjin Municipality,

Hebei, Jiangsu, Anhui, Henan, and Shandong. The locations are in northeastern China surrounding the Bohai Sea. The North China Plain is considered one of China’s main “grain baskets” (Li Y. , et al., 2014, p. 21). Shanxi province, which shares Hebei and Henan’s western borders, is omitted from the regression so that it can serve as a comparative basis for other provincial variables. Shanxi was chosen to be omitted because it is close to the North China

Plain, but not in it, so a reasonable comparison could be made of the intensity of grain production between these regions.

Dt represents the decade binary variables at decade t, for 1970-1979, 1980-1989, 1990-1999,

2000-2009, and 2010-2016. The variable for 1960-1969 was omitted in the model so that changes in decades could be compared to the early modern agricultural development.

Interactions are added to the model to consider the conditions in the North China Plain. For a province in the model that is in the North China Plain, NCP = 1. NCP=0 for all other provinces.

The second model adds an interaction of NCP and the decade variables, Dt.

(2) 푌 = 훽0 + 훽1퐹 + 훽2푀 + 훽3퐼 + 훽4푆 + 휷풑푷 + 휷푫풕 + 휷[푵푪푷 ∗ 푫풕]

The third model adds only interactions between NCP and F, M, S, and I:

(3) 푌 = 훽0 + 훽1퐹 + 훽2푀 + 훽3퐼 + 훽4푆 + 휷풑푷 + 휷푫풕 + 훽5[푁퐶푃 ∗ 퐹] + 훽6[푁퐶푃 ∗ 푀] +

훽7[푁퐶푃 ∗ 퐼] + 훽8[푁퐶푃 ∗ 푆]

The fourth model includes NCP interactions of both decade variables and basic agricultural inputs.

(4) 푌 = 훽0 + 훽1퐹 + 훽2푀 + 훽3퐼 + 훽4푆 + 휷풑푷 + 휷푫풕 + 훽5[푁퐶푃 ∗ 퐹] + 훽6[푁퐶푃 ∗ 푀] +

훽7[푁퐶푃 ∗ 퐼] + 훽8[푁퐶푃 ∗ 푆] + 휷[푵푪푷 ∗ 푫풕]

Results

The results of the OLS Regressions are presented in Table 2. Regression 4, includes all relevant variables, and has the highest R2 and Adjusted R2. Regression 1 includes basic agricultural inputs, provincial binary variables, and decade variables. This is the simplest regression, and is used as a base for Regressions 2, 3, and 4. Regression 1 is estimated to explain

96.2% of grain outputs by weight in China. Excluding some provincial variables, all other variables are significant in Regression 1. For basic agricultural inputs, the variables all have positive relationships to grain production. Shanxi Province is excluded from the provincial binary variables to provide a basis of comparison. These provincial fixed effects control for differences in agricultural conditions between provinces. This includes controlling for different types of grain production between regions, such as rice production in southern China and wheat production in northern China. Other conditions could include regional rainfall patterns, a province’s access to rivers for irrigation, or even differences in farm plot fragmentation. In

Regression 1, North China Plain provinces have mixed relationships with grain production.

While all seven are statistically significant, only Beijing and Tianjin municipalities have positive signs. This means that Beijing and Tianjin produced more grain in comparison to Shanxi province, with all other factors held constant. Some externality makes Beijing and Tianjin different than other North China Plain provinces in this model. All decade variables are statistically significant, and show a pattern of increased grain production in comparison to the

1960’s.

Regression 2 builds off of Regression 1 by adding interactions between a North China

Plain binary variable and decade variables. Regression 2 is estimated to explain 96.5% of grain 47

outputs by weight in China. Except for some decade interactions and some of the provincial variables, all other variables are significant. As in Regression 1, all variables for basic agricultural inputs have a positive sign. Excluding some provincial variables, all other variables are statistically significant in Regression 2. Beijing and Tianjin remain the only two variables of the NCP that have a positive relationship with grain production. In this model, Beijing and

Tianjin are the only NCP municipalities that have higher grain production than Shanxi. All decade variables are still statistically significant, and have relatively similar results as found in

Regression 1. Only two of the decade interactions with the NCP are statistically significant,

1980-1989 and 2000-2010. From 1980-1989, the North China Plain had greater grain production than in the 1960’s, in comparison to other provinces. From 2000-2010, the North China Plain had less grain production than in comparison to other provinces. In other decades, the North

China Plain was not statistically different from other provinces in that time.

Regression 3 builds off of Regression 1 by adding interactions between the North China

Plain binary variable and basic agricultural input variables. It does not include the interactions between a North China Plain binary variable and decade variables as in Regression 2. Regression

3 is estimated to explain 96.4% of grain outputs in China. In this model, some provincial binary variables are not statistically different from grain outputs for Shanxi. All other variables are statistically significant. As in the two previous models, decade variables are statistically significant, and show increases in each subsequent decade in comparison to the 1960’s.

Regression 3, changes the way NCP effects are treated. Binary variables for North China

Plain provinces in this model all have a positive relationship with grain outputs, and are all statistically significant. However, looking at NCP interactions with basic agricultural inputs, the

interactions with agricultural machinery, irrigation, and grain sown area all have a negative sign.

This works as a reduced effect for the use of these inputs in the NCP. The interaction of the

North China Plain and chemical fertilizer use is the only variable here with a positive relationship. This may be related to specific farming structures in the NCP, and because more specific information about the type of grains produced (as grains can include wheat, maize, and rice), the balance of fertilizers, and the uses of agricultural machinery is not available in this dataset.

Regression 4 has interactions between the NCP variable and both basic agricultural inputs and decade variables. Of all four models, this has the highest R2 and Adjusted R2, although not by much more. As expected for basic agricultural inputs, all variables are statistically significant and have a positive relationship with grain outputs. For power of agricultural machinery, an increase in 10,000 kW of power results in 2,700 metric tons of grain. An increase in 1,000 hectares of irrigated land results in 3,820 metric tons of grain, and for every 1,000 hectares of sown area of grain, there is 2,600 metric tons of grain produced. For every 10,000 metric tons of chemical fertilizers used, there are 22,640 metric tons of grain. As in Regression 3, all 7 North

China Plain binary variable coefficients are statistically significant, and have a positive relationship with grain production.

For the decade variables, all four models included decades are statistically significant, and show increases in grain outputs in comparison to the 1960’s. From 1970-1979, 1.395 million metric tons more grain was produced each year than in the 1960’s. This increased rapidly to

3.046 million more metric tons of grain production in the 1980’s, and 3.351 million metric tons more in the 1990’s than in the 1960’. In the early 2000’s, grain production was only 1.585

million metric tons more than in 1960. By 2010, grain production jumped rapidly again to 4.914 million metric tons more than in the 1960’s. Figure 3 shows the average provincial grain production from 1960 to 2016.

In this model, like in Regression 2, the interactions between the NCP variable and the decade variables, only the periods of 1980-1989, and 2000-2010 are statistically significant. In the 1980’s decade, NCP provinces produced 1.744 million more metric tons of grain per year than other provinces. This might reflect the intensification of agriculture in this area during the

Green Revolution and the introduction of the Household Responsibility System. However, in the early 2000’s, NCP provinces produced 2.696 million metric tons less grain. This may be related to the downturn in the 2000’s for the basic decade variables.

Three additional regressions were completed, in order to compare the effects of provincial conditions and changes in production over time. In Regression 5, provincial binary variables are removed from the basic model. In regression 6, provincial variable are included, but decade binary variables are removed. Finally, in Regression 7, both provincial and decade variables are removed. Results are presented in Table 3.

The R2 and adjusted R2 of these three regressions are all less than the results for

Regressions 1, 2, 3, and 4. In Regression 5, all variables are statistically significant. Total power of agricultural machinery has a negative relationship to grain production, while irrigated area, chemical fertilizers, and total sown area all have positive effects. Decade variables show changes in grain production over time in comparison to production in the 1960’s, which has overall increased dramatically in this model.

In Regression 6, excluding some provincial control variables, all other variables are statistically significant. Machinery, irrigated area, chemical fertilizer use, and total sown grain area all have a positive effect on grain production. Results for North China Plain provincial variables are very similar to the results from Regressions 1 and 2, in that only Beijing and

Tianjin are estimated to have higher grain production that Shanxi when all other factors are held constant. This model has no control for changes in production conditions and technology over time. Finally, Regression 7 only included the four basic agricultural inputs. This model still explains 88% of grain production in China. However, agricultural machinery is not statistically significant. The relationship between agricultural machinery and grain production in these models to not fit with expectations, and point to other externalities that need to be controlled for with provincial and decade variables.

Discussion

Basic Agricultural Inputs

Although land conditions in China often make it difficult to use machinery, its availability would help increase the productivity of farms large enough to employ them.

Agricultural machinery is becoming more and more available. Yang et al. (2013) showed that machinery use increased rapidly from 1985 to 2009. They argued that this likely explained why outputs did not decline with the loss of labor in this period. Farmers began to replace animal power with farm machinery, and by 2009 only 20 animals were being used per 100 farm families

(Yang, Huang, Zhang, & Reardon, 2013, p. 1247). While farmers who purchase their own machinery mostly rely on small tractors, more options for larger machinery are available through

Combine Service Enterprises. These enterprises are able to spread out the fixed costs of large agricultural machinery by serving across provinces and renting to many farmers (Yang, Huang,

Zhang, & Reardon, 2013, p. 1249). While Yang et al. (2013) covered machinery in much greater detail, the variable of total power of agricultural machinery is at least able to control for the changes in machinery availability. In Regression 4, for every 10,000 kW of power for agricultural machinery, with all other factors held constant, there is 2,700 metric tons of grain.

Increased use of agricultural machinery may become more important to production growth in

China, if smaller farm plots are joined into larger farm operations.

Similarly, irrigated area of land had a positive relationship with grain outputs, and every

1,000 hectares of irrigated land is estimated to result in 3,820 metric tons of grain yield. A couple of reasons could be driving this result. First, the irrigation of cropland is simply needed for growth, just as soil and sunlight are needed. With the intensification of agricultural production, 52

and the transformation of landscapes into arable land, in some regions, such as in the NCP, irrigation may be necessary to maintain water access for crops. Secondly, this result may also reflect some externalities not directly measured in the Regression 4 model, but controlled for in the provincial fixed effects. Namely, because the data used provincial grain production by weight, there is no distinction between wheat, maize, and rice production. Rice has different irrigation needs than wheat and maize, and so it is difficult to tell from this result the real relationship between irrigation and grain production.

Total grain sown area also has a positive sign in the Regression 4 model, which would make sense because the more land is used for grain, the greater the provincial grain production.

The results show that for every 1,000 hectares of grain sown area, there is 2,600 metric tons of grain production, holding other agricultural inputs constant. Land is important in this research because it show the opportunities for agricultural production. Because China faces problems of land fragmentation (Yang, Huang, Zhang, & Reardon, 2013, p. 1255), as well as loss of land to urbanization and environmental contamination (Yu & Zhao, 2009, p. 634),19 the availability of arable land should not be ignored in policy. Further research should seek to somehow control for the variability of plot sizes in China, because grain sown area only informs provincial totals, and nothing about the sizes of farms in reality. Larger plot sizes could expect better grain yields per hectare because they are more efficient and better able to take advantage of new technologies, such as large farm machinery.

19 Yu and Zhao (2009) cited research from (Rozelle, Veeck, & Huang, 1997) and (Brown, 1995). 53

Consumption of chemical fertilizers has an obviously positive effect on grain production.

In the Regression 4 model for every 10,000 metric tons of chemical fertilizers used, it results in

22,640 metric tons of grain production with all other factors held constant. This result is important because it reflects the impact of chemical fertilizer introduction into China’s agricultural system. Figure 1 shows the change in chemical fertilizer use over time. China had very little in the way of chemical fertilizer industries at the beginning of the 1960’s (Broadbent,

1976, p. 416), and this can be seen in the graph as well. Fertilizer use generally rises until about

1977, when there is a sharp decline in use. The reviewed research has little explanation for this decline. However, this may be related to the upheaval and restructuring after Chairman Mao’s death in 1976, and the arrest of the Gang of Four. The Gang of Four were top leaders in China who were accused of and arrested for trying to usurp power from Mao’s successor, Hua Guofeng

(Schmalzer, 2016, p. 45). Because much of the agricultural economy was still under central state control at that time, such as state owned enterprises and commune farming structures, the political upheaval may have somehow affected availability. Another possible explanation for these changes in fertilizer consumption may have to do with rising oil costs during the 1970’s due to the oil crisis. Increases in fuel costs would make transportation of chemical fertilizers more difficult, and less cost effective as an agricultural input. Further research is needed to better understand this trend.

Decade Changes in Grain Production

All four regressions show a pattern of changing grain production over time in China.

Based on Regression 4, in the 1970’s provincial production is estimated to be 1.395 million metric tons more than in the 1960’s. In the 1980’s and 1990’s, production is estimated to be

3.046 and 3.351 million metric tons greater than the 1960’s. The inclusion of these binary variables serves as a control for changes in technology and improvement of farm management over time. However, in this model, results for the 2000-2009 period are surprisingly low. In this decade, grain production is only estimated to be 1.585 million tons greater than in the 1960’s.

This production is comparatively close to the 1970’s, and does not nearly match the production seen in the previous two decades. This dip in grain production can also be seen in Figure 2 which shows that from 1998 to about 2003, average grain production decreased. This effect was most sharply seen for average production for North China Plain Provinces.

A possible explanation for this change could be the Asian Financial Crisis in 1998.

Although a more thorough analysis of this trend is beyond the scope of this study, the crisis did put pressure on China’s exports to other Asian countries. Fang and Gao (1999) found an almost

10% drop in exports to other Asian countries in 1998 (Fang & Xiao, 1999). Li et al. (2014) explicitly argued that the Asian financial crisis had a direct effect on grain production, as grain prices dropped in the aftermath. China responded by transitioning grain croplands into cash crop production (Li Y. , et al., 2014, p. 21). This may explain why provincial fertilizer use was unchanged in the same period, because this resource was still being applied to other crop types.

Despite this dip, the data showed the growth of grain production had recovered by 2010. Li et al.

(2014) mainly attributed this to farmers’ subsidies that helped to stabilize grain prices (Li Y. , et al., 2014, p. 23). In addition, farm taxes were eliminated in 2004 (Li Y. , et al., 2013). From

2010-2016 production was estimated to be 4.914 million metric tons greater than in the 1960’s.

Estimation of the North China Plain

In the first two regressions, Beijing and Tianjin Municipalities were the only North China

Plain province variables that had had a positive relationship with grain production. However, In

Regressions 3 and 4, all the NCP provinces are positive. These two regressions include interactions between the NCP binary variable and the basic agricultural inputs, which helps to control for some unique conditions in the North China Plain. Holding these interaction variables fixed, Regression 4 shows that grain production is more intensive for these NCP provinces in comparison to Shanxi province.

The intense grain production in the North China Plain fits with the available literature, since these provinces are well known for their wheat and maize production. As shown in Figure

3, in the dataset used for this research, the seven provinces included in the North China Plain have been responsible for at least 30% of national grain production (All China Marketing

Research Company, Ltd, 2018). Cui et al. (2008) described how in the NCP, maize was often grown in the summer and wheat in the winter (Cui, et al., 2008, p. 188). In an effort for farmers to ensure high yields for both grains, they will apply fertilizer in both periods, even if it is not necessary (Cui, et al., 2008, p. 191).20 However, as Cui et al. (2008) found, the double cropping system also presents an opportunity to reduce fertilizer losses. Instead of applying large amounts of nitrogen fertilizer in both periods, they suggested instead that fertilizer use could be reduced in the maize growing season, so that the maize can “capture” the excessive chemical fertilizers from the wheat season (Cui, et al., 2008, p. 194). This could not only reduce the chemical

20 Cui et al. (2008) cited (Gao, Huang, Wu, & Li, 1999) and (Chen X. , 2003). 56

fertilizer losses into the environment, but also minimize the costs of fertilizers for farmers.

Because the North China Plain is responsible for so much of China’s chemical fertilizer use, and grain production, the better adaption of the double cropping system could improve the efficient use of these resources.

The North China Plain interactions show the differences between this intense region and the rest of China. First, looking at the decade interactions, only the 1980-1989 and 2000-2009 decades are statistically significant. For the 1980’s, provinces in the North China Plain were estimated to produce 1.744 million more metric tons of grain than other provinces. The combined effect is that an NCP province was estimated to produce 4.79 million metric tons more grain than in the 1960’s. This indicated the massive intensification of agriculture in this region in the 1980s. Changes in the Reform Period may have been especially important to farm choices in the North China Plain. As the grain-based quota and tax system was removed, and farmers gained more autonomy, choices could be made based on market prices. In contrast, in the early

2000’s, NCP provinces were hit especially hard by the dip in grain production in this decade.

NCP provinces produced 2.696 million metric tons less grain in comparison to other provinces.

In addition, the combined effect shows that NCP provinces produced about 1.1 million tons less grain than in 1960, holding all other variables constant. Again, in Figure 2 the dip in average grain production is much more dramatic for the NCP, which may represent some important changes for the agricultural system in that area. Because agriculture in this area was so dependent on grains, price changes in the early 2000’s disrupted the growth of grain production as farmers moved to other crops.

The interactions of the basic agricultural inputs and the North China Plain show the difference in these factors in comparison to the rest of China. For provinces in the NCP, there is a combined effect of 1,130 metric tons of grain produced for every 10,000 kilowatts of agricultural machinery, which 1,570 metric tons less grain produced per 10,000 kW than the average province in China. Although land in the NCP is relatively flat, which would make it more suitable for machinery use (Cho, Chen, Yen, & English, 2007, p. 150), this relationship may be related to the problems of land fragmentation and small plot sizes. If this is true, then additional agricultural machinery would not be as effective in the NCP.

The effect of grain sown area is also reduced for the NCP in comparison to other provinces. For NCP provinces, each additional 1,000 hectares of grain sown area has a combined effect of 790 metric tons of grain produced, 1,810 metric tons less grain than non-NCP provinces. Because of the intense grain production in this region, it seems counterintuitive that the NCP would produce less per every additional hectare of grain sown area than other provinces. However, this result may reflect some differences in arable land restrictions for this region. Although the North China plain has relatively flat land, which is good for grain production, this model is not able to control for plot size. An additional 1,000 hectares of grain sown area in the NCP may be less effective than in other provinces if the hectares are very fragmented. Future research should better control for differences in plot sizes between regions to better understand this effect.

The North China Plain provinces also had a reduced effect of irrigated area on grain production. For every 1,000 hectares of irrigated area, NCP provinces produced 2,490 metric tons less grain than other provinces. Because the NCP has historically had problems with water

availability (Huafu, Yunzhi, Jueshu, Junfeng, & Chunyu, 2001, p. 47), it would seem that irrigation would have a positive effect on yields. However, the NCP’s most common crops are wheat and maize. Rice is more commonly grown in southern China. Because rice has greater irrigation requirements than other grains, these results may reflect some differences in regional irrigation needs. Unfortunately, because the data does not include information about plot sizes, as well as the ratios of wheat, rice, and maize grown, it is difficult to make inferences from this information. Even so, the addition of land and agricultural machinery to agricultural inputs has a reduced effect on grain outputs compared to other provinces.

The interaction of the North China Plain variable and chemical fertilizer use shows that fertilizer use has a stronger effect in the region. NCP provinces on average produce 42,950 metric tons of grain for every 10,000 metric tons of chemical fertilizers, 20,310 more metric tons than other provinces with other variables held constant. Chemical fertilizers likely have such a strong effect on grain yields in this region because of the intensity of grain production, especially with the common use of double cropping (Cui, et al., 2008, p. 192). Because the data has yearly, rather than seasonally or monthly, reports on production, fertilizer applications and grain yields for both harvests are included in one report. Although research has shown that farmers often use chemical fertilizer in both growing periods, there are options for more efficient use of fertilizer applications in double cropping systems, such as Cui et al. (2008) found that maize could capture some of the excess fertilizer applied in the wheat season (Cui, et al., 2008, p. 194). These results show that options for agricultural inputs like sown area, irrigation, and agricultural machinery are limited for farmers in the NCP, but the intense use of chemical fertilizers can have strong results.

Agricultural Transformations

The available research distinguishes three major transformations of China’s agricultural system: the Socialist Period, the Green Revolution, and the Reform Period. Considering the data used in this model, these transformations are not as easily determined. This is because changes in each transformation fed into another. So that rapid growth in the Reform Period is not independent of changes started in the Socialist Period. Rather than being its own distinct period, the Green Revolution was an intermediate change that affected both periods. In the Socialist

Period, fertilizer use rose sharply as more and more farmers gained access to modern agriculture materials. During the Reform Period, the model showed a jump of 3.046 million more tons of grain production compared to the 1960’s, with all other factors held constant. Farmers began to apply lessons learned for intensification from the Socialist Period, using the Green Revolution package, to continue increasing grain production since the 1980’s. The model showed that Green

Revolution technologies themselves have been critical to this development, as shown in the results for the chemical fertilizer, irrigation, and agricultural machinery variables. Although the individual effects of these transformations are not easily distinguished from each other, they all made important changes that affected the system seen today.

China’s transformation in the Socialist Period presents a unique adoption of Green

Revolution technologies. Rather than participate directly with foreign agencies that had developed the program, as India and Mexico had, China gained indirect access, and styled their own Green Revolution as “Scientific Farming.” As Schmalzer’s (2016) research showed, scientific farming was inseparable from socialism, as diffusion of these innovations relied on direct state intervention: developing communes, collectivizing land, and creating direct contact

between technicians and peasants in experimentation (Schmalzer, 2016, p. 38). In the 1970’s,

China remained a black box to the rest of the world. It was able to access and utilize these developments, with its own socialist interpretation, while subverting western goals of preventing the spread of communism. As China began its agricultural intensification, serious constraints due to land fragmentation, and access to modern farm machinery made chemical fertilizer use one of the most critical changes in inputs. These constraints, as well as the benefits of fertilizer, were accentuated by China’s closed door policies at the time. While farm machinery could not be easily imported from other countries, once the basic knowledge of chemical fertilizer technologies reached China, the country was able to self-sufficiently develop its own industry

(Schmalzer, 2016, p. 144).

Despite the success of China’s “green revolution cultivated in red revolutionary soil”

(Schmalzer, 2016, p. 79), flaws in the system and the government’s goals led to the catastrophic failure of the Great Leap Forward Famine. The “unrealistic production quotas” for rural industrialization directed focuses away from production of staple foods (Schmalzer, 2016, pp.

38-39). Local officials, whose performance was judge on economic development and social stability, were incentivized to exaggerate food production reports to the state to secure their positions. This led to inadequate planning at the central government level. The models estimated in this paper are likely biased due to reporting problems in this period. Farmers and their collectives were responsible for paying taxes in the form of food quotas (Lin, 1992, p. 36), essentially paying the state in grain rather than with money, a system that existed up until the

1980’s. The central government allocated more of the food they received to the cities not only because they misjudged how much food was actually available, but also because feeding urban

industrialization and social stability in cities was favored over rural areas. Famine in the city was a much larger problem for securing state authority, as revolts or protests were hard to start in the countryside. Even so, changes in the Socialist Period have continuing implications for the contemporary agricultural system. This period marks the beginning of intensive agriculture under modernization in China.

Policy Implications

Intensive agricultural production and heavy use of chemical fertilizers in China pose risks to contemporary environmental health. This is because as more soil and water resources become contaminated, keeping up with this intense production growth becomes more difficult. With limited data on China’s historical environmental conditions, the model is not able to directly measure any possible costs to the agricultural system. In addition, because the source and destination of non-point source pollution is not easily identifiable, measuring this problem at a national remains difficult, if even possible. It could be that grain sown area for NCP had a diminished effect compared to other provinces because soil in that region is worn out. As Liu et al. (2003) found as well, use of irrigation and heavy rains can also exacerbate nitrogen leaching

(Liu, Ju, Zhang, Pan, & Christie, 2003, p. 118). Even though the model does not capture any environmental costs explicitly, the agricultural system still shows some unsustainable trends.

Chemical fertilizer consumption and grain production (excluding the 1998 financial crisis), especially in the North China Plain, has increased steadily since the 1980’s. However, grain sown area has actually decreased from the 1960’s, as shown in Figure 4. High use of chemical fertilizers runs the risks of soil and water contamination, potentially harming future agricultural production by harming soil health.

It should be noted that this model measures chemical fertilizers as aggregate consumption, but in reality a variety of chemical fertilizers must be properly balanced.

Agricultural management habits in China have come to rely heavily on nitrogen, with limited attention to phosphorous and potassium (Ju, Liu, Zhang, & Roelcke, 2004, pp. 301-302) (Li, He,

& Jin, 2012, p. 1195) (Wang, Halbrendt, & Johnson, 1996, p. 293).21 As Li et al. (2012) has shown, however, the partial factor productivity of nitrogen for grain production has dropped rapidly since the 1950’s (Li, He, & Jin, 2012, p. 1196). Imbalanced, heavy use of chemical fertilizers has limited effect on grain yields, and only contributes to soil and water degradation due to leaching (especially of nitrogen). Future research should more accurately measure the consumption of different fertilizers, and the effects on unbalanced use.

This model is based on the assumption that China’s farmers make choices to maximize their profits. This would make sense, as farmers make choices about the available inputs given the prices they face. For example, this assumption explains why grain production decreased in the late 1990’s in response to changes in grain prices. Research has also shown that due to

China’s land use versus land ownership laws, profits in the short term are more heavily weighed over long-term soil health (Zhang & Makeham, 1992, p. 153) (Wang, Halbrendt, & Johnson,

1996, pp. 294-295). Farmers are further incentivized to look at the short-term in making their choices because of these policies. The long-term effects in a way become “the government’s problem” (Harris, 2006, p. 11).

21 Wang et al. (1996) cited research from (Stone, 1986), (An, 1989), and (Smil, 1993) 63

Chemical fertilizer use has been shown to have a complicated role in farmer’s choices.

Misunderstandings and limited extension education have left many farmers to rely on the idea that using more fertilizers will guarantee yields. Huang (2011) found that fertilizer consumption is inelastic to fertilizer price changes, because farmers believe that it is a necessary input and cannot be reduced. Government intervention through the “preferential treatment + price limits + subsidies” policies further interferes in the market economy (Huang W. , 2011, pp. 194-195).

Huang (2011) argued that these subsidies to fertilizer companies should be instead used as transfer payments to support farmers’ incomes, carrying a stipulation that fertilizer use must be more sustainably controlled (Huang W. , 2011, p. 196). While China greatly reduced government intervention during the Reform Period, subsidy intervention in the fertilizer economy can be contradictory to environmental policy goals.

Farmer’s choices are also influenced by strong risk aversion. In this case, it is not enough to simply educate farmers on fertilizer use issues, but they must be made confident in any changes to risk their main source of income. Farmer’s livelihoods depend greatly on their profits.

Farmers not only need to make careful choices about which crops they grow, but also on using adequate inputs for high enough crop yields. Research has shown that intense chemical fertilizer use is perceived as a way to ensure crop yields (Chai, et al., 2013, p. 23) (Cui, et al., 2008, p.

191). With fragmented and small plots, as well as the small margins farmers operate on, the perceived risks to any changes are greatly amplified. One way to address this issue is to prove methods in the field. In the Socialist Period, agricultural experimentation was completed on the local scale, and demonstration fields were used to convince farmers of new methods by presenting the tangible results (Schmalzer, 2016, p. 39). While the Socialist Period suffered from

problems of social upheaval and intellectual persecution, the idea of widespread use of demonstration fields was beneficial to the agricultural system. Sponsored reintroduction of this program could be useful to connecting agricultural goals to the ground level.

An option for adjusting farmer’s management choices includes creating incentive programs for ecologically friendly projects completed at the local level. For example, money from the government subsidies programs could be used to develop riparian zones in key areas that would slow the contamination of waterways. For example, the government could create transfer payments that adequately cover a farmer’s income and costs to establish these zones.

The 13th Five Year Plan noted goals for establishing crop rotation and fallow systems

(Compilation and Translation Bureau, 2016, p. 52). If some sort of steady compensation system is established, one that farmers can learn to trust, these sorts of plans can address two issues at once: protecting the environment while creating a more steady income for rural farmers.

Addressing China’s environmental problems is also undermined by public apathy, particularly to environmental issues that are less pronounced. As the available research has shown, people who live in urban areas tend to display more concern about environmental issues.

This is because this population has better education, and have greater incomes. In addition, concern also relies on how tangible environmental issues are to a population (Harris, 2006, p. 8).

In the case of unbalanced, intensive fertilizer use, non-point source pollution has hardly been noticed. This is because by the very nature of non-point source pollution, being diffuse, an identifiable source difficult to blame. In addition, the effects of this pollution are not easily identifiable or pose an immediate problem to the general public, in contrast to smog pollution for example. Non-point source pollution does not have an obvious effect on the source location,

rather the effects are a combination of intensive use over several farm plots. The effect is compounded by many farm sources, and transported away to affect water and soil quality elsewhere as it enters the environmental system. While non-point source pollution poses a threat to soil and water quality, with limited social attention to this issue, policy incentives are limited.

As Huang (2011) noted, most environmental laws are more concerned with city and industrial pollution sources, while rural environmental law remains inadequate (Huang W. , 2011, p. 193).

Policy response to fertilizer problems specifically will remain slow until social concern increases.

China’s environmental health will also depend on overall development. China has long blamed poverty for the widespread environmental degradation (Edmonds, 1999, p. 647). As the population gains access to better services, steady incomes, and education, they will not only develop greater awareness of the issue, but also have the means to act on it. As of now, farmers rely on ensuring their yields, and do not have the ability to take risks on changing their farm practices. Even in urban areas, people may not have the time, resources, or even knowledge to be concerned about non-point source pollution. This can change with further development in the future. As Zhang et al. (2010) noted, the environmental Kuznets curve posits that conditions worsen at first with economic development, but then later improve as development reaches a certain level. Zhang argued that both phases of degradation and improvement do not necessarily exist naturally, and can be greatly affected by policy choices and technology (Zhang, et al.,

2010).

China has shown promise when environmental concerns are made a real priority. For example, in the 11th Five Year Plan, China was able to reduce carbon dioxide emissions per unit

of GDP from 2005 levels by 33.8% (Wei, p. 3). Koleski (2017) similarly concluded that the 12th

Five Year Plan showed moderate success as well, when it came to industrial pollution (Koleski,

2017, p. 16). Policy in China is highly dependent on these Five Year Plans, which establish official government goals. Campaigns developed for each of the Five Year Plans can have a great impact on refocusing national attention and creating fast-paced changes. The Five Year

Plan can be used to create real incentives for local cadres to implement environmental policy, by adding environmental health to their evaluation criteria. Cadre attention could be adjusted from purely economic and social stability concerns to include environmental concerns.

Although these Five Year Plans have shown progress in addressing salient social issues, further attention is still needed towards the consequences of intensive agriculture. The 13th Five

Year Plan specifically mentions chemical fertilizers, stating that “we will carry out the initiative to achieve zero growth in the use of chemical fertilizers and pesticides…” (Compilation and

Translation Bureau, 2016, p. 52). As the People’s Daily article reported (Chang Q. , 2017), this goal has already been reached. However, with the rapid changes in China’s agricultural system since the 1950’s, zero growth may only be a starting point for addressing environmental risks.

Improvement of chemical fertilizer use, for example, entails not just reducing applications, but also better balance and timing. In the long-term, other constraints, such as land fragmentation, will need to be addressed as well if drastic changes are to be made to fertilizer use. As part of these changes, the Five Year Plan should also focus on better adapting the agricultural extension system. Not only are local officials incentivized to focus on purely social and economic development concerns, but the extension agents are forced to work on the commercial side of agriculture. Because extension agents in China can no longer rely on state funding for their

paychecks and program expenses, many have been forced to turn to selling or marketing seeds, chemical fertilizer, and pesticides (Jia, Huang, Xiang, & Powlson, 2015, p. 193). This problem greatly contradicts any state goals for environmental protection, as agents will have a bias towards promoting high applications. In addition, extension services and agricultural university research are disconnected in contemporary China. In the Socialist Period, extension and experimentation were inseparable through the system of three-in-one groups (Schmalzer, 2016, p. 38). Now, extension services are handled by the Ministry of Agriculture, while agricultural universities are handled by the Ministry of Education, with no direct interaction between them.

This delays new research, and education opportunities from reaching farmers, and could reinforce the intensive agriculture lessons learned in the Green Revolution as a stable way to manage a farm.

Direct regulation of non-point source pollution will remain difficult. Incentive programs, such as payments for riparian zones and fallow fields, can help to reduce the impacts of chemical fertilizer use. However, regulation relies on great organization, a clear definition of plot ownership, and large-scale measurement of soil and water health. China’s current agricultural system does not have the means to meet these needs. Chemical fertilizer regulation will need to be balanced with further changes in the agricultural structure. Land fragmentation of farms will need to be reduced to make pollution issues more traceable. This will also allow for better organization of enforcement efforts. Funding for extension services will need to be stabilized so that agents will be free to focus on working with environmental policy, rather than depending on side commercial agriculture activities. Finally, stronger connections between agricultural

universities and extension services need to be developed so that implementation of policy is adequately backed by technology and science.

Conclusions

The objectives of this paper were to explore fertilizer use in the North China Plain, and to analyze the impacts of fertilizer use on the environment and agricultural economy. Previous research has shown three major transformations of China’s agricultural system, including the

Socialist Period, Green Revolution, and the Reform Period. In only a few decades China went through drastic changes and adopted key innovations of a modern agricultural system.

With and R2 of 0.967 and an adjusted R2 of 0.965, Regression 4 best described grain production in China from 1960 to 2016. Regression 4 measures grain outputs as a function of agricultural inputs and conditions:

퐺푟푎𝑖푛 푂푢푡푝푢푡 = 훽0 + 훽1퐶ℎ푒푚𝑖푐푎푙 퐹푒푟푡𝑖푙𝑖푧푒푟 + 훽2 퐴푔푟𝑖푐푢푙푡푢푟푎푙 푀푎푐ℎ𝑖푛푒푟푦

+ 훽3 퐼푟푟𝑖푔푎푡푒푑 퐴푟푒푎 + 훽4퐺푟푎𝑖푛 푆표푤푛 퐴푟푒푎

+ 휷풑푷풓풐풗풊풏풄풊풂풍 푩풊풏풂풓풚 푽풂풓풊풂풃풍풆풔 + 휷푫풆풄풂풅풆 풗풂풓풊풂풃풍풆풔

+ 훽5푁표푟푡ℎ 퐶ℎ𝑖푛푎 푃푙푎𝑖푛 퐹푒푟푡𝑖푙𝑖푧푒푟 + 훽6푁퐶푃 퐴푔푟𝑖푐푢푙푡푢푟푎푙 푀푎푐ℎ𝑖푛푒푟푦

+ 훽7푁퐶푃 퐼푟푟𝑖푔푎푡푒푑 퐴푟푒푎 + 훽8푁퐶푃 퐺푟푎𝑖푛 푆표푤푛 퐴푟푒푎

+ 휷푵푪푷 푫풆풄풂풅풆 푽풂풓풊풂풃풍풆풔

This model included basic agricultural inputs, provincial binary variables, decade variables, and interaction variables for the North China Plain provinces. Basic agricultural inputs such as total power of agricultural machinery, irrigated area, consumption of chemical fertilizers, and sown area of grain crops were all statistically significant and had a positive relationship with grain outputs. For power of agricultural machinery, an increase in 10,000 kW of power resulted in

2,700 metric tons of grain. An increase in 1,000 hectares of irrigated land resulted in 3,820

metric tons of grain, and for every 1,000 hectares of sown area of grain, there was 2,600 metric tons of grain produced. For every 10,000 metric tons of chemical fertilizers used, there were

22,640 metric tons of grain. All 7 North China Plain binary variable coefficients were statistically significant, and had a positive relationship with grain production, meaning that all seven provinces have greater grain production than Shanxi, holding other factors constant.

Decade variables showed the increases in grain outputs in comparison to the 1960’s.

Production increased rapidly from 1960 to 2016, except for a dip in the 2000-2010 period. This dip was found to be related to the Asian Financial Crisis and the resulting drop in grain prices.

The North China Plain interactions revealed that increases in grain production in the 1980’s were stronger in the North China Plain. In this period, NCP provinces were estimated to produce 1.744 million metric tons more grain than other provinces. However, The NCP’s grain production was hit harder than other provinces during the Asian Financial Crisis, and was estimated to produce

2.696 million metric tons less compared to other provinces. NCP interactions with basic agricultural inputs revealed that additional machinery, irrigated area, and grain sown area had a reduced effect compared to non-NCP provinces. Chemical fertilizer consumption, however, was shown to be more effective for grain production in the NCP. An additional 10,000 metric tons of chemical fertilizers used in an NCP province produced 20,310 more metric tons of grain.

The Socialist Period marked the beginning of the agricultural transition. Government restructuring of agricultural policy, promotion of farming intensification and transforming of landscapes, and the emphasis on cooperation between peasants and the urban educated all fed into communist goals of “scientific farming.” While some of these efforts proved disastrous, it was successful in that it helped a backwards agricultural system rapidly adjust to a new political

order. China had access to Green Revolution innovations at this time, but was able to pick and choose innovations that best fit within political goals. The strongest effects of the Green

Revolution innovations were not felt until the 1980’s, as reforms allowed greater liberalization of the agricultural market, and allowed individual farmers to make production decisions. As the models used in this paper showed, grain production dramatically increased compared to what had been seen in the 1960’s, and production has continued to grow.

Fertilizer played an important role in this development. The available research has shown that the introduction of chemical fertilizers were best suited for increasing agricultural production, as land, labor, and machinery conditions could not easily be changed. Fertilizer use has increased steadily since the early 1980’s, and was shown in the model to be a key input for grain production. This is especially true for the North China Plain, where inputs like cultivated land area, agricultural machinery, and irrigated land area were shown to be less effective than in other provinces. However, chemical fertilizers used in the North China Plain have a greater effect on grain yields compared to other provinces. Because much of China’s grain is produced in this region, the adoption of chemical fertilizers there was a critical component of the regional

Green Revolution agricultural development. This case study demonstrates that although China relies on a largely centralized government, the agricultural system and its policies needs to be heavily adapted to local conditions.

Intense production and heavy or unbalanced applications of fertilizers poses risks to environmental health. China’s relationship with nature has changed since the 1950’s, and the production at any cost attitude means that environmental health risks were largely ignored. In the

1970’s, as environmental disasters began to emerge, more attention was given in policy, but

enforcement remained ineffective. While the models employed in this paper did not directly capture the costs of environmental harm, the risks of soil acidification, contamination, and degradation have been clearly shown in previous research. The North China Plain is especially at risk for this, as intense double-cropping, heavy and unbalanced fertilizer applications, and unpredictable water availability characterize the region. Water and soil quality have already shown signs of degradation, linked to non-point source pollution, and problems will continue unless drastic changes are made.

While China’s agricultural and environmental policy have shown failings in the past, great opportunities remain for improvement. Remnants of government intervention in the agricultural market make it possible to control fertilizer problems, if environmental policy is made a greater priority. For example, as Huang (2011) argued, subsidies created to help domestic fertilizer producers could be instead used as transfer payments to peasants (Huang W. , 2011, p.

196). Securing rural livelihoods, and incentivizing sustainable practices. Extension services should also be better funded and trained. While the Socialist Period showed many failings, it was able to show that improved cooperation between farmers and agents could help the system meet central government goals.

Future agricultural system development should be focused on better organizing central goals with local enactment. Greater cooperation between the Ministry of Agriculture, the

Ministry of Ecology and Environment (formerly SEPA), and the Ministry of Education needs to be fostered so that government resources, policies, and funds are better targeted. While China’s central government has strong authoritarian power in an urban context, enforcement at the rural level remains problematic. Government reform at the local, rural level is a large hurdle not be

easily addressed, but policies can still be developed to incentivize cooperation with agricultural and environmental goals.

The People’s Daily’s 2017 announcement has shown that improvement is possible when addressing these costs are made a priority. Continued progress must be managed carefully by the central government. With recently developing threats to China’s trade interdependence with the

United States, it has become more difficult for the agricultural system to meet food security goals. China’s system will need to adjust to greater self-dependency as imports of pork, soybeans, nuts, and fruits from the United States will face huge tariffs in retaliation to newly announced U.S. tariffs against China (Merelli, 2018). Balancing these major changes against the nation’s carrying capacity for agriculture will have consequences for intensive fertilizer use.

China has been able to maintain the same arable land for thousands of years of their agrarian society’s history. Modern environmental risks must continue to be managed to allow farming to continue for years to come.

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Appendix: Tables and Figures

TABLE 1

CATEGORIZATION OF PROVINCE AREAS IN (CHO, CHEN, YEN, & ENGLISH, 2007, P. 145)

North Northeast East South Central Southwest Northwest Neimenggu Heilongjiang Shandong Hong Kong Henan Guangxi Shanxi (Inner Mongolia) Beijing Jilin Jiangsu Guangdong Hubei Guizhou Ningxia Hebei Liaoning Anhui Fujian Hunan Yunnan Gansu Shanxi Shanghai Sichuan Qinghai Tianjin Zhejiang Xizang Xinjiang Jiangxi

TABLE 2

REGRESSIONS OF GRAIN PRODUCTION (GRAIN WEIGHT) ON AGRICULTURAL INPUTS AND CONDITIONS IN CHINA, 1960-2016 Regression 1 Regression 2 Regression 3 Regression 4 Simple With NCP With NCP and NCP and both regression and decade agricultural decade and interactions input input interactions interactions Basic Agricultural Inputs Total Power of 0.130*** 0.168*** 0.278*** 0.270*** Agricultural Machinery (0.0143) (0.0154) (0.0326) (0.0340) (10000 kw) Irrigated Area (1000 0.281*** 0.263*** 0.392*** 0.382*** hectares) (0.0188) (0.0196) (0.0368) (0.0363) Consumption of 3.371*** 3.308*** 2.539*** 2.264*** Chemical Fertilizers (0.224) (0.219) (0.324) (0.322) (10000 tons) Total Sown area of 0.249*** 0.252*** 0.259*** 0.260*** Grain Crops (1000 (0.0162) (0.0158) (0.0185) (0.0183) hectares) North China Plain Beijing Municipality 547.0*** 591.8*** 885.3*** 856.9*** (68.74) (79.45) (85.07) (92.11) Tianjin Municipality 517.2*** 559.1*** 847.9*** 820.0*** (68.76) (78.38) (84.17) (90.41) Hebei Province -1125.2*** -1138.6*** 683.9** 751.8** (98.32) (101.3) (344.3) (346.2) Jiangsu Province -200.0** -149.1* 1295.6*** 1394.3*** (84.98) (87.75) (298.4) (303.2) Anhui Province -213.3*** -184.2** 1234.8*** 1284.8*** (77.38) (85.12) (282.5) (288.5) Shandong Province -953.5*** -945.3*** 976.7** 1078.5*** (114.0) (114.3) (387.5) (391.6) Henan Province -797.9*** -787.1*** 1221.9*** 1316.4*** (119.1) (121.2) (405.0) (409.3) Provincial Control Variables (Non-NCP) -- * -- * --* --*

Decade Variables 1970-1979 119.4*** 150.7*** 114.1*** 139.5*** (29.87) (35.13) (29.42) (36.31) 1980-1989 384.1*** 346.5*** 341.5*** 304.6*** (29.64) (34.16) (30.19) (38.19) 82

1990-1999 404.1*** 379.2*** 340.3*** 335.1*** (32.71) (35.83) (35.50) (45.53) 2000-2010 211.5*** 230.6*** 98.67** 158.5*** (37.40) (39.49) (43.90) (56.05) 2010-2016 710.1*** 619.6*** 442.2*** 491.4*** (99.92) (104.1) (118.5) (138.2) North China Plain Variable Interactions North China Plain 1970- -91.66 -41.06 1979 (57.03) (59.79) North China Plain 1980- 114.8** 174.4*** 1989 (55.79) (60.81) North China Plain 1990- 0.630 55.92 1999 (57.52) (70.67) North China Plain 2000- -313.9*** -269.6*** 2009 (66.55) (87.85) North China Plain 2010- -299.5 -293.0 2016 (237.2) (267.6) North China Plain and -0.193*** -0.157*** agricultural machinery (0.0353) (0.0386) North China Plain and -0.218*** -0.249*** irrigation (0.0438) (0.0454) North China Plain and 1.661*** 2.031*** Chemical fertilizer use (0.416) (0.429) North China Plain and -0.171*** -0.181*** grain sown area (0.0401) (0.0412) Constant -881.7*** -894.8*** -1070.0*** -1049.7*** (72.95) (72.46) (76.75) (75.76) Observations 1074 1074 1074 1074 R2 0.962 0.965 0.964 0.967 Adjusted R2 0.960 0.963 0.963 0.965 Standard errors in parentheses * p < 0.10, ** p < 0.05, *** p < 0.01

TABLE 3

REGRESSIONS OF GRAIN PRODUCTION (GRAIN WEIGHT) ON AGRICULTURAL INPUTS AND CONDITIONS IN CHINA, WITH AND WITHOUT PROVINCIAL AND DECADE VARIABLES, 1960-2016 Regression 5 Regression 6 Regression 7 Without Without decade Without provincial variables provincial or variables decade variables Basic Agricultural Inputs Total Power of Agricultural -0.0549*** 0.139*** -0.0276 Machinery(10000 kw) (0.0161) (0.0157) (0.0171) Irrigated Area(1000 0.0485*** 0.336*** 0.0472*** hectares) (0.0147) (0.0207) (0.0160) Consumption of Chemical 6.031*** 3.641*** 6.436*** Fertilizers(10000 tons) (0.253) (0.242) (0.268) Grain Crops(1000 hectares) 0.198*** 0.236*** 0.180*** Total Sown area (0.00605) (0.0176) (0.00631) Decade Variables 1970-1979 181.1*** (42.40) 1980-1989 520.6*** (40.10) 1990-1999 525.4*** (43.04) 2000-2010 362.1*** (50.06) 2010-2016 725.1*** (137.7) North China Plain Beijing 576.3*** (78.10) Tianjin 529.3*** (78.01) Hebei -1213.1*** (112.9) Jiangsu -333.1*** (95.56) Anhui -201.7** (87.88) Shandong -1101.8*** (127.9) Henan -873.4*** (133.9)

Provincial Control Variables (Non-NCP) --* Constant -396.9*** -685.5*** 8.246 (40.19) (78.14) (19.69) Observations 1074 1074 1074 R2 0.904 0.947 0.879 Adjusted R2 0.903 0.946 0.878 Standard errors in parentheses * p < 0.10, ** p < 0.05, *** p < 0.01

Figure 1:

Average Provincial Chemical Fertilizer Consumption (10,000 metric tons) 1960-2015

350

300

250

200

86 150

100

1960 1962 1964 1966 1968 1970 1972 1974 1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014

NCP Average National Average Non-NCP Average

Figure 2: China Average Provincial Grain Production (10,000 metric tons)

National Average NCP Average Non-NCP average

3000

2500

2000

87 1500

1000

500

19601962196419661968197019721974197619781980198219841986198819901992199419961998200020022004200620082010201220142016

Figure 3: Percent NCP Grain Production of National Grain Production Based on Decade Averages

100%

90%

80%

70% 65.85% 64.67% 65.40% 70.18% 68.11% 66.84% 60%

50%

40%

30%

20% 34.15% 35.33% 34.60% 29.82% 31.89% 33.16% 10%

0% 1960-1969 1970-1979 1980-1989 1990-2000 2000-2009 2010-2016

Percent NCP Grain Production Percent Non-NCP Grain Production

Figure 4: Grain Sown Area (1,000 Hectares) by Decade Average

7000

6000

5000

4000

3000

2000

1000

0 1960-1969 1970-1979 1980-1989 1990-1999 2000-2009 2010-2016

NCP Average Non-NCP Average National Average