How can information and communication technologies influence farmers’ agricultural income and labor productivity? Micro evidence from China

Abstract

ABSTRACT Based on a panel data from the National Rural Fixed Point Survey of China, this study explored the effects of information and communication technologies (ICTs) on agricultural income and labour productivity of Chinese farmers using fixed effects models and two-stage least square estimations. The results indicate that the deployment of mobile 3 G led to a reduction in both farmers’ agricultural income and agricultural net income by CNY 560.64 and 331.2, respectively, because ICTs prompted farmers to engage in off-farm employment, thereby allocating less time and input to farming activities. Village access to Internet and 3 G increased farmers’ labour productivity, measured by agricultural net income per day, with increments of CNY 2.09 and 11.15, respectively. ICTs also decreased farmers’ grain production, production cost, fertilizer use, and increased grain productivity. Furthermore, ICTs exhibited a spill-over effect, with non-users in Internet-connected villages demonstrating higher labour productivity compared to those in villages without Internet access. These results imply that agricultural labour productivity can be enhanced by employing ICTs for China and countries with small-scale farms. Nonetheless, greater attention should be paid to the potential trade-offs between the income growth facilitated by ICTs in rural out-migration and the decline in agricultural income and grain production.