Agricultural Production Services, Farm Size and Chemical Fertilizer Use in China’s Maize Production

Abstract

Although various previous studies have explored the relationship between agricultural service adoption and its economic impact, little is known about how it may affect environmental quality, especially chemical fertilizer application. Our study examines the effects of agricultural production services (APSs) on chemical fertilizer use, as well as the effects mediated by farm size, using a national representative survey data set comprising 1321 farm households from 132 villages in China. We show that farms adopting APSs tend to decrease the usage of chemical fertilizer and, thus, have less deviation from optimal chemical fertilizer application. Farms with large sizes are more likely to reduce the usage of chemical fertilizer. Moreover, farm size has a significant mediating effect on the relationship between APS adoption and chemical fertilizer use. In particular, farms adopting APSs are more likely to expand farm size, resulting in chemical fertilizer reduction. Our results suggest that APSs contribute to promoting the scale operation and environmental quality in agriculture.