Farm households’ rice production behavior in China under a separability assumption: A metaheuristic optimization approach

Abstract

AbstractThe production behavior of farm households has been a topic of interest for a long time. We explore the optimal production strategies from a household's perspective under the assumption of separability between consumption and production. The data used for this study come from farm households located in five provinces of China. To identify the impacts of various parameters on farmers' production behavior, optimal solutions and the households' actual production behaviors are compared. Results show that most of the households overinvested on farm land, labor force, materials, and machinery. Compared to existing production efficiency estimates, households, regardless of size, and exhibit different degrees of nonseparability. The sensitivity analysis shows a similar result, but finds that large households become more efficient if they have a higher production coefficient. The optimized result obtained in this paper not only provides farmers with decision‐support information on efficient resource allocation, but also helps policymakers to formulate better agricultural policies.Recommendations for Resource ManagersA household production model is constructed to assess whether production and consumption behaviors are different among Chinese farmers. A genetic algorithm that belongs to a metaheuristic cluster is applied to search for the optimal solution, given the parameters obtained from using a ridge regression model. The following implications could be recommended based on the findings of the paper: The goodness of the convergence of the algorithm helps to find the optimal rice production decision, when facing a large number of input variables. The evidence that can support the separability among farm household's production behavior which to some degree supports nonseparability. As some of the external parameters, such as nonagricultural income, as well as farm scale, are increased, the optimal solution shows the separability among some households. Unless farm size is increased substantially, there is a need to support farmers in production behavior so that they can be efficient and profitable rather than just subsistent.