| Hog-raising industry is one of the traditional competitive industries of our agriculture and an important source of meat for urban and rural citizens, which plays an imperative role in agricultural economics. The development of hog production did not only meet the demand of pork and its products, but also contribute a lot to the farmers’income increase, rural labor employment, transformation of grains and stimulating the development of related industries. But epidemic occurred in2007increased the risk of hog-raising and exerted an important influence on hog production, and many farmers were forced to quit this industry. According to Ministry of Agriculture, epidemic of highly pathogenic porcine reproductive and respiratory syndrome (HPPRRS) occurred in25provinces in2007, affecting143,221pigs,39,455of which were dead. The production of hog was greatly decreased by28%affected by the epidemic.Since reform and opening policy, enormous changes have taken place on the income constitution of Chinese farmers. Judging from its constitution, salary income took larger and larger proportions in farmers’total income, non-farm income took15%of total household income in1981,32%in1995, and this proportion reached52.98%in2007. At the same time, the proportion of household production (especially agricultural production) income kept falling, this proportion was62.86%in1995, and fell to38.90%in2007. Labor resource is the most active resource in farmers’household, farmers tend to allocate labors to more efficient department under fixed system. After the reform and opening policy was issued, institutional barriers to the transfer of labors to urban decreased, according to economic theories, farmers would allocate their time between agricultural and non-farm production until marginal benefits of their equals.Thus, with the increasing proportion of non-farm income and the increasing risk of hog production, traditional hog-raising provides smaller and smaller proportion of cash, more and more farmers quit hog-raising. Hog raising households provide about40%of total hog production, which inevitably lead to the price fluctuation of pork prices and affected the development of hog industry.So under this background, the overall objective of this research was to empirical study the effect of non-farm employment on farmers’decision-making of hog production with farmers of Sichuan and Jiangsu as objects; with the increasing of risk of hog raising, what the influence of risk preference on farmers’decision-making? How non-farm income affects farmers’risk preference? What the differences between act of hog production in Sichuan and Jiangsu with large gap between the economic situations in two provinces? Did the increase of non-farm income enlarged or narrowed this gap? Investigation of these questions had profound theoretical and actual meanings on the perfection of hog production supportive policy and insurance of a stable supply of pork.Major conclusions of this research were listed as follows:1. Farmers’desire of hog raising decreases with the increase of non-farm income. Based on the analysis of the variation of the amount, cost and benefit hog raising in Sichuan and Jiangsu, devoted labors and the citizens’income constitution:hog industry played a vital role in animal husbandry in our country, animal husbandry took a relative higher proportion in farmers’income, hog raising is an important producing activity of rural citizens; hog-raising in Sichuan and Jiangsu played a vital role in our country, and kept stably developing since2006, the raising amount and decreased production sharply affected by epidemics in2007, but gradually recovered since then. In recent years, household hog production decreased year by year, but because of its large scale, household hog production will still affect the pork supply to some extent. With the process of urbanization, great changes had occurred on the composition of rural citizens’income, the amount of labors devoted to hog production keeps falling, while non-farm employment increased. If this trend continued, the development of hog industry will be greatly affected.2. Judged from the total samples, non-farm income negatively related to hog raising decisions. Empirical study were performed on the relationship between non-farm income and hog raising based on the questionnaires for Jiangsu and Sichuan hog raising households. Non-farm income were found to be negatively related to hog raising decisions, the higher non-farm income, the less farmers desired to raise pigs. The possible reason is:on the one hand, non-farm income released the farmers from the restrain of cash, they no longer depend on the traditional hog raising to obtain cash, on the other hand, with the increase of non-farm income, the opportunity cost of hog raising increased which drive the farmers out of hog raising.3. When non-farm income keeps at a high level, non-farm income would be positively related to hog raising decision. The relationship between non-farm income and hog raising could be shown by an "U" curve. To gain more insight to the relationship between non-farm income and hog raising, the samples were grouped according to their non-farm income, namely the low non-farm income group and high non-farm income group. Two groups showed different features of hog raising decision making by regression respectively: for high non-farm income group, non-farm income positively related to raising scales, indicating that when non-farm income reached a certain level, non-farm income could promote agricultural production after meeting their basic needs, non-farm income could increase the investment on agriculture and promote the development of agricultural production in a long term. For low non-farm income group, negatively related to hog raising decisions. The relationship between non-farm income and hog raising could be shown by an "U" curve, at primary phase, with the increase of non-farm income, farmers quit hog raising with a certain amount of cash, when the income raised to a higher level, more disposable cash could be used to enlarge the scale of hog raising, and traditional households raising were transferred into scaled raising. This conformed to the plan of the government, which was proposed in "Guidance for the development of hog production" in2008that financial subsidies could be provided for hog raising households who reached a certain scale.4. Non-farm income affected farmers’risk preference. Non-farm income was mostly obtained by working in the city, the experiences of working not only increased their material capital, but also increased their life experience, techniques and human relationships. The accumulation of physical and incorporeal capital changed the farmers’ value, making them the more rational and opening characters of modern citizens. So they get over the traditional reserved and risk-escaping character of small farmers to be more modern. Further empirical study indicated that farmers’risk character was affected by non-farm income, the difficulty of credit acquisition, the developing state of local financial market. The higher non-farm income, the more farmers preferred risks, they were positively related; the more perfectly local financial market developed, the easier farmer could get credit, the more risks farmers are willing to take, e.g. the looser exterior restrains, the more risks could be dispersed, the smaller tendency of farmers avoidance of risks. The farmers’preference of risks affected the decision making of hog raising. The risk of hog raising was higher than other production. As shown by the empirical analysis, the farmers’ preference of risks affected the decision making of hog raising, they were positively related. This indicated that, with the continuous increase of natural risks (epidemic risks) and market risks of hog raising, only risk-preferred farmers chose to enlarge raising scale, risk-avoiding and neutral farmers would decrease raising amount or quit.5. Regional difference existed between farmers’ decision making of hog raising in Jiangsu and Sichuan and non-farm income was one of the major cause of this difference. The result of regression showed that farmers in Sichuan more tended to raise hogs compared with those in Jiangsu, indicating that the act of hog raising possessed regional characters. Further, Blinder-Oaxaca were applied to resolve the regional difference, results demonstrated that significant regional differences existed. Non-farm income had different influences on farmers’decision making. Regional regression demonstrated that this variable negatively related to farmers’ decision making with different effects. The relative coefficient was-0.624for Sichuan samples, while-1.623for Jiangsu. It is concluded that regional difference existed between farmers’ decision making of hog production Jiangsu and Sichuan, the influence on Jiangsu was larger than that in Sichuan. Of all the differences, the most effective factor was non-farm income, whose contribution rate reached40.22%.According to the above conclusions, suggestions on the perfection of hog raising supportive policy were proposed in this paper:carry out progressive raising subsidies and enlarge benefited scales; perfect credit mechanism and provide financial support to enlarge hog raising scales; taking regional differences into consideration and make targeted policies; encourage farmers to return and venture and enlarge hog raising scales. |
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