Adoption mode of agricultural machinery and food productivity: evidence from China

Abstract

Many researchers argue that the adoption of agricultural mechanization services (AMSs) is an important way for smallholder farmers in China to engage in modern agricultural production. However, the impact of the adoption mode of agricultural machinery on food productivity remains under-analyzed. We investigate the links between the adoption mode of agricultural machinery and food productivity using data on 795 grain farmers collected from the North China Plain. The results indicate that, compared with service outsourcing (SO), self-purchase (SP) improves the technical efficiency of farms; however, it reduces the input efficiency of agricultural machinery. The channel of the effect is that, although SO can reduce the redundancy of agricultural machinery's input, the opportunistic behavior of AMS suppliers and labor supervision problems lead to a decline in agricultural machinery's operation quality. The impact of the adoption mode of agricultural machinery on food productivity is asymmetrical among different types of farmers. Large-scale and professional farmers benefit more from SP, whereas small-scale and part-time farmers benefit more from SO. The AMS is not perfect, and the Chinese government should pay close attention to the loss of technical efficiency in agricultural production caused by the opportunistic behavior of AMS suppliers. Therefore, it is necessary to adjust the agricultural machinery subsidy policy and reduce the transaction cost of AMS.