Effects of Organic Fertilizer Substitution on the Technical Efficiency among Farmers: Evidence from Bohai Rim Region in China

Abstract

Using organic fertilizer to replace chemical fertilizer is an effective way to promote sustainable agricultural development. Based on survey data of 514 farmers from five provinces and cities in the Bohai Rim region of China, collected in 2019, organic fertilizer substitution’s effects on farmers’ technical efficiency were analyzed. The PSM method is used to solve the problem of farmers’ self-selection. Considering the causal relationship between the substitution behavior of organic fertilizer and farmers’ technical efficiency, the IV-Tobit model, 2SLS, and ML estimation methods are used to solve the endogenous problem. The study found that: (1) quality and safety awareness, part-time employment level, participation in insurance, and training significantly promote using organic fertilizers to replace chemical fertilizers; (2) the technical efficiency of farmers who use organic fertilizer to substitute the chemical fertilizers is 0.625, 9.46% higher than their counterparts; and (3) the promotion effect of organic fertilizer substitution on technical efficiency has heterogeneity, which has a significant role among small-scale farmer households with fewer and low-educated family laborers. Regarding the policy implications, it is necessary to strengthen agricultural subsidies by improving the accuracy of policy formulation and implementation, fully considering the heterogeneity of farmers for implementation.