A Study on the Impact of Non-agricultural Use of Agricultural Land in Shandong Province on Economic Growth

Abstract

China's farmland has been shifted to factories, roads, and housing faster than at any point in its history—and Shandong has been at the front of that wave. The conversion helped push the province's GDP up for years, but it has also eaten into grain acreage, strained the Yellow River basin's ecology, and left displaced rural households with few alternatives, costs that now gnaw at the very growth it fed. Given the needs of urbanization and industrialization, it is essential to effectively address the negative impacts of farmland non-agriculturalization while meeting the demand for expanded land use. To ensure that farmland non-agriculturalization promotes economic growth and urbanization in certain regions, it is crucial to clarify the relationship between the two and implement appropriate measures to manage related challenges. Taking Shandong Province as a case study, this paper investigates the relationship between farmland non-agriculturalization and economic growth. Using a combination of literature review and empirical research methods, we collected 20 years of data from Shandong and applied the C-D production function model to analyze the contribution of farmland non-agriculturalization to economic growth, concluding that it is a significant factor. The pace of farmland non-agriculturalization in Shandong has been rapid, with a substantial increase in the proportion of non-agricultural land use, making it a major engine of economic growth. This transformation has promoted industrialization and urbanization, stimulated investment and consumption, created employment opportunities, improved living standards, increased tax revenues, and driven optimization and upgrading of the industrial structure. By calculating the contribution rate of farmland non-agriculturalization to economic growth, we derive conclusions and propose recommendations for sustainable development based on local conditions. These suggestions aim to prevent minor problems from escalating and avoid over-reliance on farmland non-agriculturalization, which could lead to negative consequences such as reduced arable land, heightened food security risks, ecological damage, employment and social insurance challenges, and illegal non-agricultural land occupation in some areas.