Is small beautiful? Links between agricultural mechanization services and the productivity of different-sized farms

Abstract

ABSTRACT Developing agricultural mechanization services is commonly regarded as an important approach to pushing smallholder farmers engaging in modern agricultural production in China. However, whether smallholder farmers can benefit more from agricultural mechanization services is ambiguous. Using household-level data collected from Henan province in China, this study investigates the effect of agricultural mechanization services on the productivity of different-sized farms. The results indicate that the productivity of medium farms benefits more from agricultural mechanization services rather than small and large farms. Further analysis shows that medium farms are more likely to adopt agricultural mechanization services and reveals a positive relationship between the adoption of agricultural mechanization services and farm productivity. The higher rate of adoption of agricultural mechanization services and the related higher productivity of medium farms can be explained by the tendency of large farms to invest in self-owned agricultural machinery and the likelihood that small farms will input more labourers in wheat production. Although Chinese governments aim to develop the social service in agriculture for smallholder farmers, it seems that they do not get positive responses.