Capital investment
Agriculture benefited from both rural industrialization and commercialization because they led to the creation of new and important sources for agricultural investment. First, vigorously developing rural industries absorbed a great deal of the rural labour force, mostly female, away from farming.
The returns from female labour were higher in spinning, weaving, or silkworm raising than in farming. Second, rapidly growing rural commerce facilitated the expansion of cash crops. The returns from planting cash crops were generally higher than that from planting grain, especially since rice imports were increasing remarkably during the two centuries under study. Both rural industrialization and commercialization increased peasants' income substantially, making it possible for peasants to invest more in their farms. Compared to their predecessors in the Ming period and earlier, Jiangnan peasants in the Qing period could afford more fertilizers and other materials of production such as improved varieties of silk cocoon and mulberry seedlings, charcoal for silkworm raising and silk reeling, and so on. They could also invest more in water control, in land improvement, or in transforming paddies into mulberry groves. The development of rural banking and credit also enabled peasants to get loans or other financial support more easily (Fang Xing 1994; Min-te Pan 1996; Bozhong Li 1999: 491), especially since the real interest rates of rural loans declined in most of the period under study (Fang Xing 1999: 2138—74). It is not surprising that there was a substantial increase in farm investment at this time (Bozhong Li 1984). In mid-nineteenth-century Jiangnan, a common peasant family working 10 mu of land usually owned a property worth 184 thousand copper coins (140 taels of silver). Of that, 118 thousand coins were ‘productive goods’ (land, seeds, farm instruments, fertilizer, fodder, etc.) and the rest were ‘consuming goods’ (food, housing, etc.) (Fang Xing 1999: 2125—9). That is, production expenses were much more than consumption expenses, an indication that farm capital investment was greater than in the past.The improvement of land, advances in farm technology, and increased agricultural investment together ushered in a rise in yields per mu of major crops during the two centuries under study. Although increased yields of wheat and mulberries were insubstantial, yields of other crops increased significantly. For example, cotton yields per mu increased by one fifth, from about 80 to around 100 catties.14 However, this increase was dwarfed by what happened in rice. Earlier studies conclude that there was no increase in rice yields during the period. However, my macro analysis of demand and supply15 leads to quite a contrary conclusion that rice yields rose by nearly a half (47%), from 1.7 shi to 2.5 shi in the period. This is
the greatest increase for any two-century period in pre-modern Jiangnan history (Bozhong Li 1998: 130—1, 1999: 500-1).
3.