Did product certification and e-commerce benefit agricultural producers in China?

Abstract

This study investigates the impacts of product certification and e-commerce on various production and profitability outcomes for grain and cash crop producers in China, using nationally representative survey data. Employing multinomial endogenous switching regression (MESR) estimations, we find that agricultural producers who adopt e-commerce, product certification, or both strategies have significant price premium, increased sales revenue, and greater profitability, despite the increased production costs, with cash crop producer and large-scale producers gaining more benefits. Additionally, we find a synergistic effect: agricultural producers benefit more from adopting both product certification and e-commerce simultaneously than the sum of the effects of adopting two strategies separately. This positive reinforcement between the two strategies is more pronounced among cash crop producers compared to grain crop producers, as well as among larger-scale producers compared to their small-scale counterparts. These findings provide valuable policy implications for assisting agricultural producers in adopting suitable strategies, thereby enhancing their competitiveness and profitability within the global value chains of agri-food.