Based on the introduction of modern agriculture, relationship between land circulation and modern agriculture is discussed. This relationship is reflected mainly in two aspects. Firstly, land circulation is a necessary requirement for the development of modern agriculture, which can speed up the adjustment of agricultural structure and realize the scale management, accelerate the transfer of the rural population and improve the agricultural income, enhance the risk resisting ability of agriculture and the response of agriculture to market challenges. Secondly, development of modern agriculture must be based on land circulation. Land circulation can not only provide resource allocation basis for modern agriculture, but also offer economic benefit basis for modern agriculture. 2007 China Statistical Yearbook, agricultural product output (Y), agricultural employees (L) and other relevant data in 19 provinces are obtained. CES production function is used to reflect the agricultural employees (L), agricultural capital investment (K) and agricultural product output (Y), in order to calculate the agricultural production function. Result shows that contribution of labor force to output is negative, while the contribution of capita to output is positive. Meanwhile, the substitution elasticity of capital for labor is 1.11, indicating that every 1% increase of labor force will lead to the 1.11% enhancement of farmers’ capital.


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