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The paradox of developing agricultural mechanization services in China: Supporting or kicking out smallholder farmers?

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  • Qiu, Tongwei
  • Shi, Xinjie
  • He, Qinying
  • Luo, Biliang

Abstract

Developing agricultural mechanization services (AMS) is commonly regarded as an important step in the modernization of smallholder farmers in China. However, given the increase in the opportunity costs of agriculture and the high cost of AMS, further study is needed to determine the relationship between AMS and smallholder farmers' exit from agricultural production. In this paper, data from the China Family Panel Survey collected in 2017 and 2019 are used to investigate this issue. Our findings show that the development of AMS reduces the probability that smallholder farmers exit from agricultural production though land abandonment, but increases the probability through land renting-out. Further analysis shows that with the emergence of large farm operators and the increase in land size rented by large farm operators, the development of AMS induces smallholder farmers' exit from agricultural production through both land abandonment and land renting-out. We also find that AMS can increase the market demand for land transfers and the marketization of land rentals, and as land markets develop, AMS induce smallholder farmers' exit through the abandonment of fragmented and distant land plots.

Suggested Citation

  • Qiu, Tongwei & Shi, Xinjie & He, Qinying & Luo, Biliang, 2021. "The paradox of developing agricultural mechanization services in China: Supporting or kicking out smallholder farmers?," China Economic Review, Elsevier, vol. 69(C).
    • Handle: RePEc:eee:chieco:v:69:y:2021:i:c:s1043951x21000985
    DOI: 10.1016/j.chieco.2021.101680
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    More about this item

    Keywords

    Exit from agricultural production; Agricultural mechanization services; Land abandonment; Land transfer;
    All these keywords.

    JEL classification:

    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • Q13 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Markets and Marketing; Cooperatives; Agribusiness
    • Q16 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - R&D; Agricultural Technology; Biofuels; Agricultural Extension Services

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