Question

What do you think is the impact of non-farming activities on the farming sector

Answer 1

 Although evidence abounds that the development of rural nonfarm activitieshave increased rural household income and contributed to rural development, theunderlying structure and mechanism of the linkage between agricultural productivity andnon-farm activities is poorly understood. Using a unique panel dataset of Chinesevillages, this article examines the mechanism by which non-farm activities influenceagricultural productivity. I find that Chinese villages’ non-farm revenue has a significantpositive effect on agricultural land productivity. Although non-farm activities dowithdraw labor out of agriculture and therefore dampen land productivity, that negativeeffect is negligible in comparison with the land productivity improvement brought bynonfarm revenue-financed infrastructure capital investment.