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

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.

KEYWORDS:

• Farm productivity
• agricultural mechanization services
• farm size
• inverted U-shaped relationship

JEL CLASSIFICATION:

• Q12
• Q16

Disclosure statement

No potential conflict of interest was reported by the author(s).

Notes

¹ Source: United States Department of Agriculture.

² The share of wheat production completed by AMS is equal to the proportion of the land scale operated by tractor ploughing, machine sowing and machine yield services; these services are assigned the same weight.

³ High-quality land is defined as first-class land. In rural China, arable land is divided into several levels, and first-class land is the best.

⁴ The development of AMS at the village level is proxied for by the proportion of land area operated by AMS to the total land area at the village level.

Additional information

Funding

This work was supported by the National Social Science Fund of China [20FGLA004].