Market Accessibility and Agricultural Development in Prewar China

Abstract

Improvement in transport efficiency has commonly been recognized as an important factor conducive to agricultural development in lowincome countries.' Higher farmstead prices for agricultural products, which accompany improved transport and marketing facilities, encourage specialization in cash-crop cultivation and enhance farm productivity based on mobilization of previously unutilized or underutilized resources. This paper attempts to inquire into such economic effects as might have resulted from advances in transport technology on the agrarian economy of pre-World War II China. Accessibility to (nonlocal) agricultural markets, defined as the reciprocal of total transfer cost, is shown to have definite influences on average farm output. Rational responses on the part of Chinese peasants to economic incentives emanating from improvement in transport conditions therefore engendered a spatial continuum of agricultural productivity at the farm level. The process of change characterized by agricultural commercialization and regional specialization in production, though undeniably stimulated by the construction of railways and motor roads, was ultimately constrained by the limited scope of such investments and other artificial barriers to interregional trade development.