Abstract This paper adds to the debate on the impact of market reforms versus structural reforms in explaining agricultural output growth in China. A multiple-output stochastic frontier and a technical inefficiency equation are estimated using provincial data on the rural economy from 1986 to 1995. Grain self-sufficiency policies and incomplete market reforms in the 1980's and 1990's led to allocative inefficiency. Agricultural disinvestment shrunk the production frontier and the fragmentation of land holdings reduced technical efficiency. China's rural economic reform is far from being complete. J. Comp. Econ. , September 2001, 29 (3), pp. 527–541. University of California–Davis, Davis, California 95616. Copyright 2001 Academic Press. Journal of Economic Literature Classification Numbers: 047, Q12, Q15.