Thesis (M.Sc.) - Asian Institute of Technology, 1993

A thesis submitted in partial fulfillment of the requirements for the degree of Master of Science.

This study investigates, describes and analyzes the existence of the agricultural service in t he Southeast China where rural industry has rapidly developed since 1980s. Key informant interviews were used to collect information on the institutional framework under which the agricultural service is organized . A structured survey for both the village agricultural station and farmers was used to collect data on economic concerns with the agricultural service and household farming . The transaction cost approach to economics together with the theory of farm management economics were employed for various economic analyses and discussions. The impacts of the agricultural service were traced in a complex village economic system. The results indicate t hat the agricultural service greatly reduces the high production costs as well as transaction costs caused by diseconomies of scale in the small scale farming system. It makes small scale farmers possible to make use of farm machines and other moderTI productive means leading to sustainable development of agriculture. The results also indicate that the subsidized agricultural services are provided for labor substitution in agriculture to satisfy the increasing demand for labor in rural industry, and that the subsidies spent in agricultural service are traded off by the profit gained in rural industry. The micro- level knowledge about the agricultural service, could be inserted to the macro-level policy formulation regarding agricultural and rural development in China.