Evolution of a Development Model for Fruit Industry Against Background of Rising Labor Cost: Intensive or Extensive Adjustment?

Abstract

As an important starting point for optimizing the structure of agricultural products and implementing green production methods, the direction of orchard management development is directly related to the success of “supply side” reform in the fruit industry in China. However, in the context of the progressive rise of labor force, is the labor force still capable of the high labor intensity and fine cultivation management needed, such as for pruning? In this paper, based on the micro-production data of peach farmers in different provinces, we set up a decision model of fruit trees management to analyze the effects of changes in the labor cost on orchard management’s input for farmers with different trading characteristics under the information asymmetry theory. The results show that with the increase of labor force cost, although the total labor investment of farmer households has somewhat reduced, significant differences exist in the distribution of labor investment between the different farmers due to the different labor demands from the various trading characteristics. By repeated transactions that transmit information of quality, farmers can get a high marginal price of fruit, and these relatively repeated transactions further increase the labor investment of fine management. Foreseeably, the rising of rural labor cost will have a negative impact on fine cultivation management in the fruit and nut industries, which have the same management methods for pruning and flower (fruit) thinning. Therefore, this paper offers relevant policy recommendations for the support of agriculture products brand, optimization of production tools, expansion of operation scale, and the establishment of networks of companies, aimed at sharing skilled labor for the execution of quality work, etc.