The Demand for Chemical Fertilizers in China

During the past two decades, the tremendous increase in the use of chemical fertilizers compared with other inputs in Chinese agriculture is particularly impressive. This growing use of chemical fertilizers has played a crucial role Chinese agricultural growth. In the future, the use of chemical fertilizers will continue to play an unsubstitutably important role. As land become more scarce, the future growth of Chinese agriculture will mainly depend on technological progress like the adoption of new seed varieties. While the new technologies' effect can only be realized in combination with the use of chemical fertilizers usually. However, the increasing use of chemical fertilizers may cause serious environment problems, such as example is the intrate problem. Thus how to keep agriculture grow continuously to feed her still growing population without deteriorating the fragile environment, hence, how to use chemical fertilizers rationally and efficiently, becomes an urgent theme. The objectives of this paper are to estimate the demand function and account for the growth of chemical fertilizers in China. The main results are as follows. Similar to what have been made clear in other countries by previous studies, the demand for chemical fertilizers in China is affected by its own price negatively and agricultural price positively. Technological progress is a strong force of inducing the use of chemical fertilizers. The adoption of Household Responsibility System improves the use of chemical fertilizers during the institutional reform period. Disaster also has a negative effect. The arguement that labor is a substitute for CFs could not have been empirically verified.