Time Preferences and green agricultural technology adoption: Field evidence from rice farmers in China

Abstract

Green agricultural technology has the potential to not only alleviate the degradation of soil fertility, but also to improve the agricultural productivity of smallholders. In this paper, taking straw incorporation as an example, experiments were conducted in Chinese villages to directly measure the time preferences of farmers, and an attempt was made to evaluate the contribution of time preferences to farmers' technology adoption behavior. Furthermore, this research aims to assess the moderating role of production scale between the farmer's time preferences and technology adoption. This study is a continuation of previous studies on factors influencing green agricultural technology adoption. The results show that time preferences significantly reduce technology adoption; in particular, farmers who are more present-biased have a lower proportion of technology adoption. This is because farmers with lower discount rates are more sensitive to future income. Further analysis indicates that compared with small-scale farmers, large-scale farmers are more likely to adopt green technology. It is posited that this occurs because large-scale farmers will gain more benefits by adopting green agricultural technology, and thus, they will be more sensitive to high profits in the future. Moreover, the increase of production scale can reduce the inhibitory effect of time preferences on farmers' technology adoption, which means that scale economies play a moderating role between the farmer's time preferences and their technology adoption. Overall, this research provides a micro foundation and policy recommendations for green agricultural technology promotion and sheds light upon how the government can formulate relevant policies to promote green agricultural development.