Due to rapid development of the industrial and commercial sector, Mainland China agricultural sector has experienced substantial changes in its production structure and profitability. An immediate impact of land reform was constrained expansion in farm size. A declining role for the small farm economy in national economy development, shifting from the provision of basic resources to foster industrial development to dependence on non-farm income in order to sustain agricultural growth. During 1980's-1990's period, China's agriculture found itself in great trouble. To meet the challenge economic conditions, agricultural policy has to be adjusted in a timely fashion in order to prevent the small farm economy from collapsing. The purpose of this study is to measure the effect of economic growth on changes in Mainland China. In order to fulfill the objective of this research, a Cobb-Douglas indirect profit function with a varying parameter is used to identify the factors that effect the changes in agricultural profit on Mainland China. The following hypotheses will be tested: 1.The effect of economic growth on agricultural profit is different for different areas on China. 2.The effect of economic growth on agricultural profit has a negative effect on agricultural profit through input price elasticities. The empirical results of Mainland China are as follows: 1.The increasing use of inputs which are biased toward forestry and fishery production in Shan-Tung, livestock production in Wu-Bei and crops production in Si-Chuan. 2.The total effect of economic growth on Gan-Su and Fu-Chien is negative at first but then becomes positive. This implies tha the growth of agricultural industries and the growth of non-agricultural industries are complementary. 3.The total effect of economic growth on middle provinces and western provinces is positive but at a decreasing rate. This implies that the growth of agricultural industries and the growth of non-agricultural industries are complementary. 4.The total effect of economic growth on An-huei province approaches zero. These empirical results support the hyothesis of diminishing marginal returns and that the total effect of economic growth will decrase as income increases.