There were two major changes in agriculture around this time.
One was the growing use of iron ploughshares. This meant that heavy, clayey soil could be turned over better than with a wooden ploughshare, so that more grain could be produced. Hence 1 is correct.
Second, people began transplanting paddy. This meant that instead of scattering seed on the ground, from which plants would sprout, saplings were grown and then planted in the fields. Hence 2 is correct.
This led to increased production, as many more plants survived.