China Agricultural Economic Review

Huo, Xuan; Lin, Mingang

2022 China Agricultural Economic Review

doi: 10.1108/caer-08-2021-0163

This paper aims to review the institutional evolution of China's rural social security system in the past 35 years, focusing on major policy transformations of the rural social security system in a large country, and extract the Chinese experience on developing rural social security.Design/methodology/approach This paper systematically reviews the evolution of rural social security system via organizing policy documents, key events and research literature on the construction of rural social security since the Reform and Opening-up.Findings First, institutional transformation is a profound change in China's rural social security system; second, policy transformation has taken place in the main areas of China's rural social security system, including rural endowment insurance, medical insurance and social assistance; third, the policy evolution of China's rural social security system has a unique experience in a large country.Originality/value China is the country with the largest rural population in the world. The process and experience of transforming the social security system in the vast rural areas of China have important value and reference significance for other developing countries.

Zhang, Meiyi; Luo, Yi; Huang, Dong; Miao, Haimin; Wu, Laping; Zhu, Junfeng

2022 China Agricultural Economic Review

doi: 10.1108/caer-08-2020-0186

The purpose of this study was to estimate on-farm maize storage losses and to empirically analyse the main determinants of maize storage losses in China.Design/methodology/approachBased on a nationwide survey of 1,196 households in 23 provinces (autonomous regions and municipalities) in China, the authors estimated on-farm maize storage losses and used a fractional logit model to analyse the main determinants of maize storage losses in China.FindingsThe results showed that, first, 1.78% of maize was lost during the storage stage in China and that storage loss experienced by smallholders varied across regions. Second, the empirical analysis showed that storage quantities have significant and negative effects on storage losses and that an economy of scale in household storage may exist; the percentage of maize stored for consumption and feed has significant and positive effects on storage losses, which may be related to market requirements and management activities. Third, compared to traditional facilities, silos and warehouses cause lower storage losses, while spraying chemicals and re-drying maize in the storage stage incur higher losses, possibly because to save costs, smallholders conduct loss-reduction activities only when they suffer serious losses, and when taking measures, farmers may sort grains, which also increases losses. Fourth, harvesting maize when it matures is significantly associated with lower storage losses.Research limitations/implicationsTo reduce storage losses, first, farmers' awareness of food saving and loss reduction must be increased. This could be achieved through agricultural training and education regarding food-saving practices. Second, the government could provide subsidies or low-interest credits to encourage farmers to use advanced facilities and promote land transfers to realize economies of scale. Finally, the government should accelerate the construction of smart agriculture systems and the timely monitoring of crop growth to suggest farmers to harvest at the appropriate time.Originality/valueReducing post-harvest loss (PHL) has become an important means of increasing the food supply and reducing resources use in China. This study provides a complete introduction to household maize storage losses and can therefore help characterize the current state of PHL in China, which is of vital importance to food security and food policy.

Moon, Wanki

2022 China Agricultural Economic Review

doi: 10.1108/caer-02-2021-0030

The primary purpose of this paper is to take an in-depth look at the question of whether liberalizing trade in agriculture can generate dynamic productivity gains comparable to those in the manufacturing sector.Design/methodology/approachIn contrast to the manufacturing sector that has generated firm/plant-level trade data, there is a lack of farm-level trade data that are needed for empirical measurement of dynamic productivity gains. Therefore, the authors use thought experiments to analyze the sequence of events that would occur when trade is liberalized for agriculture; delineate the expected behaviors of the actors involved in the trade and draw inferences about whether there would be dynamic productivity gains from agricultural trade.FindingsThe central finding is that there would be little dynamic gain from agricultural trade at the farm level due to the limited role of producers in shaping their international competitiveness. Yet, agricultural trade may generate dynamic gains if states or input supply corporations respond to the freer trade environment by making more investments for research and development (R&D). Further, when intraindustry prevails, there can be productivity gains at the industry level due to the transfer of resources from less to more efficient farm producers.Originality/valueThe findings of the paper are expected to present insights into value for researchers working in the area of agricultural trade; for agricultural trade policymakers in developing countries and for trade negotiators engaged in reforming or designing World Trade Organization (WTO)’s trade rules for agriculture.

Zhou, Jiehong; Jin, Yu; Wang, Yu; Liang, Qiao

2022 China Agricultural Economic Review

doi: 10.1108/caer-06-2020-0156

Food markets are characterized by asymmetric information between suppliers and consumers, which causes inefficiency of market and food safety risks. This paper studies how the food quality and safety information disclosed by the government affects the hazard analysis and critical control point (HACCP) certification decision of meat producers. The heterogeneity of the effects across different regions, provinces with different meat output scales and provinces with different intensities of food safety regulation is evaluated.Design/methodology/approachThis paper applies a unique database comprising information from multiple sources. Food quality and safety information disclosure is indicated by the number of failure records of food sampling inspections by the government in 2015–2018. Fixed-effect model is used in the analyses.FindingsThe results demonstrate that food quality and safety information disclosure has a significant effect on the HACCP certification adoption by meat producers. The effect is heterogeneous across geographic regions, i.e. this effect is larger in the east and the middle of China than that in the west and the northeast. The heterogeneity across regions may be caused by the variance in meat output scales and fiscal expenditures on food safety among provinces.Originality/valueThis research is one of the preliminary attempts to understand how producers respond in terms of HACCP certification to the amount of food quality and safety information disclosed by the government, based on the case of meat industry in China.

Wang, Xiuhua; Fu, Yang

2022 China Agricultural Economic Review

doi: 10.1108/caer-08-2020-0189

Digital finance has the transformative power to realise financial inclusion. However, evidence on the relationship between digital finance and poverty reduction remains limited. This study examines the mitigating effects of digital financial inclusion (DFI) on vulnerability to poverty in rural China, explores potential mechanisms at the micro-level, and investigates the external conditions for DFI to validate these effects.Design/methodology/approachRural household data from the China Labour Force Dynamics Survey and the regional DFI index compiled by Peking University are used. The probit and mediation effect models are employed to assess the impacts of the DFI on vulnerability to poverty and explore its mechanisms, with an appropriate instrumental variable to mitigate potential endogeneity.FindingsDFI can mitigate vulnerability to poverty in Chinese rural households. Specifically, both sub-indices – coverage breadth and depth of use – have a significant effect. Further analyses based on the mediation model show that improving agricultural productivity, stimulating entrepreneurial activities and promoting non-agricultural employment are the core mechanisms for alleviating poverty vulnerability. Heterogeneity analysis shows that DFI is pro-poor and benefits those who lack economic opportunities. Moreover, adequate endowment in rural households, such as production and human capital, is an external condition for digital finance to mitigate vulnerability to poverty.Originality/valueThis study is among the first to examine the vulnerability-mitigation effects from the perspective of digital finance development, relying on data from a large-scale, nationwide household survey and the regional DFI index. It also checks for the mechanisms and heterogeneity of the effects, which prove the effects can help balance efficiency and equity.

Zheng, Hongyun; Ma, Wanglin; Guo, Yanzhi; Zhou, Xiaoshi

2022 China Agricultural Economic Review

doi: 10.1108/caer-10-2020-0251

The purpose of this study is to investigate the interactive relationship between non-farm employment and mechanization service expenditure.Design/methodology/approachThe study employs an innovative two-stage probit least squares (2SPLS) model to analyze the survey data collected from 1,148 rural households in China. This model not only simultaneously estimates the impact of non-farm employment on mechanization service expenditure and the impact of mechanization service expenditure on non-farm employment, but also addresses endogeneity issues associated with these two activities.FindingsThe empirical results show that non-farm employment and mechanization service expenditure are jointly determined. In particular, the study finds that non-farm employment significantly increases mechanization service expenditure, and vice versa. The results are confirmed by an estimation that captures a dichotomous decision of mechanization service usage. The interactive effects of non-farm employment on mechanization service expenditure are heterogeneous between male and female household heads and among households with different member sizes. Further analyses reveal that (1) mechanization service expenditure increases with increasing non-farm working time; (2) local non-farm employment, rather than provincial non-farm employment, has a larger impact on mechanization service expenditure; and (3) the number of household members employed in non-farm works does not affect mechanization service expenditure significantly.Originality/valueAlthough mechanization service markets are rapidly growing in many developing and transition countries, little is known about how service purchasing interacts with farmers' decisions to work in the non-farm sector. This study makes the first attempt by investigating the interactive effects of non-farm employment on mechanization service expenditure in rural China. The findings provide significant evidence for policymakers in China and other countries in their efforts to generate non-farm work opportunities and promote agricultural mechanization, with the aim of boosting rural development and improving farm economic performance.

Cai, Yi; Qi, Wene; Yi, Famin

2022 China Agricultural Economic Review

doi: 10.1108/caer-11-2020-0260

The purpose of this study is to examine the effects of mobile Internet adoption on technology adoption extensity.Design/methodology/approachThis study uses cross-sectional data collected in 2018 from 932 smallholder litchi farmers in Guangdong Province and Guangxi Province in southern China. A Poisson regression with endogenous treatment effects (ETPR) model is applied to estimate the effects of mobile Internet adoption on technology adoption extensity.FindingsThe ETPR model results indicate that mobile Internet adoption can significantly enhance technology adoption extensity. In addition, the extensity of technology adoption is also determined by education level, training, share of litchi farming income, guidebook use and cooperative membership. Disaggregated analyses further confirm the positive impact of mobile Internet adoption on the number of capital- and labor-intensive technologies adopted.Originality/valueThis study contributes to the literature on agricultural technology adoption. The findings highlight the need to facilitate modern agricultural technology penetration by promoting the use of mobile Internet technologies.

He, Ling-Yun; Zhang, Hongzhen

2022 China Agricultural Economic Review

doi: 10.1108/caer-11-2020-0280

Inspired by the comparison of charity donations among candidates in rural elections, the authors linked the non-profit motives of charity to corporate pollution emissions. And on this basis, the authors aim to provide theoretical and empirical explanations for the relationship between corporate philanthropy and pollution. The authors find that the desire to pursue more pollution emissions stimulates the firm's philanthropy, which is similar to the public welfare donations in rural elections.Design/methodology/approachFirstly, the authors construct a game-theoretical framework consisting of an entrepreneur and a bureaucrat to study the environmental cost of corporate philanthropy through the impact on pollution emission by the firm. Secondly, the authors used various empirical methods, including hybrid OLS, IV-2SLS, PSM, etc., to empirically test the impact of a firm's philanthropy on corporate pollution emissions. Finally, the authors use the output and abatement input as intermediary variables and apply the intermediary effect model to test the impact mechanism between corporate philanthropy and corporate pollution emissions.FindingsTheoretical model finds that the firm invests more in philanthropy discharges more emissions when the theoretical model is in political equilibrium. Besides, empirical results show that corporate philanthropy will lead to more pollution emissions by reducing abatement input and increasing production. Finally, the heterogeneity test finds that compared with state-owned enterprises, the intention of non-state-owned enterprises' philanthropy for more pollution emission is more obvious. Moreover, the improvement of regional environmental regulation can significantly inhibit the realization of corporate philanthropy's poor motive.Practical implicationsThe results have obvious policy implications for China's future policy-making. Firstly, regulatory agencies should pay close attention to the charitable behaviors of firms with serious negative environmental externalities, and prevent them from replacing more pollution emissions with philanthropy. Besides, due to weak environmental supervision in rural areas, rural polluting enterprises will be more inclined to make charitable donations to the village collective to obtain more emission rights. Therefore, the government should strengthen environmental supervision in rural areas to prevent enterprises from wanton pollution.Originality/valueBy constructing a game-theoretical framework consisting of an entrepreneur and a bureaucrat, the authors expound on corporate philanthropy's pollution motivation and decision-making mechanism for the first time in theory. Besides, this paper finds that the desire to pursue more pollution emissions also stimulates the firm's philanthropy. This paper expands the literature on corporate charitable donation motivations.

Chen, Zhigang; Zhang, Ying; Zhou, Li

2022 China Agricultural Economic Review

doi: 10.1108/caer-07-2020-0169

Finance is crucial to boosting agricultural development in developing countries. This paper aims to investigate the effects of rural formal and informal financial access on agricultural technical efficiency (TE) in China.Design/methodology/approachBased on the survey data of demonstrative family farms in Langxi county, Anhui province and Wuhan city, Hubei province in central China in 2017, this research assesses agricultural TE by using a three-stage DEA model. It adopts the tobit model to evaluate the effects of formal and informal financial access on TE, and to explore the heterogeneous effects by types, management states and scales. It uses the OLS regression and PSM method to check the robustness, and applies the IV-Tobit method to solve the endogeneity. The authors apply the mediation effect model to explore the channels through which financial access impacts TE.FindingsFamily farms' average TE reaches 13.9%, which shows much room for improvement under the given technical conditions and constant inputs. The research confirms the advantage of formal financial access in raising TE relative to informal financial access. The heterogeneous analysis documents more prominent effects of formal financial access on enhancing TE of aquaculture, hybrid, demonstration and large farms. The mediating effect model reveals that the enhancing TE effect of formal financial access derives from improved machinery investment and family labor division rather than land circulation.Originality/valueThe research clarifies finance into formal and informal finance. The results have considerable policy implications for rural financial policies in China.

Yu, Chuanjiang; Jia, Nan; Li, Wenqi; Wu, Rui

2022 China Agricultural Economic Review

doi: 10.1108/caer-10-2020-0255

This paper examines the impact and mechanism of China's digital inclusive finance on rural consumption upgrade. First, the impact of the development of digital inclusive finance on the upgrading of rural household consumption structure is to be theoretically analyzed and empirically tested. Secondly, in terms of heterogeneity analysis, it pays attention to the age heterogeneity of users that digital inclusive finance influencing rural residents' developmental consumption upgrade, which is related to the issue of intergenerational “digital gap”. Thirdly, the mechanism of digital inclusive finance in promoting rural consumption upgrade is to be investigated. Finally, how to promote the role of digital inclusive finance in upgrading the structure of rural consumption to a developmental demand level will be showed.Design/methodology/approachFrom the perspective of the micro-household, this study is conducted by using the instrumental variable (IV) method, with 2SLS model and IV-Tobit model, based on the matched city-level data of Digital Inclusive Financial Index (DIFI) with the Chinese Household Financial Survey (CHFS). “The relief degree of land surface” is an ideal instrumental variable of digital inclusive finance, for including regional altitude difference and terrain factors of regional area, has theoretical influence on the development of digital inclusive finance, and is not affected by other economic variables.FindingsThe conclusions show that the digital inclusive finance plays a significant role in promoting the rural households' developmental consumption, but has no significant effect on the rural households' survival-type consumption and hedonistic consumption. Furthermore, this paper examines the impact and mechanism of China's digital inclusive finance on rural consumption upgrade. First, the impact of the development of digital inclusive finance on the upgrading of rural household consumption structure is to be theoretically analyzed and empirically tested. Secondly, it is discovered that digital inclusive finance is age heterogeneous in promoting the upgrade of consumption structure of rural household, and its effect on the elderly is weaker than that on the young for the intergenerational “digital gap”. Thirdly, these conclusions reveal that the digital inclusive finance does affect the consumption of rural residents through three mechanisms: increasing income and wealth, easing liquidity constraints and facilitating payment methods. Finally, how to promote the role of digital inclusive finance in upgrading the structure of rural consumption to a developmental demand level will be showed.Originality/valueThe current research on the relationship between digital inclusive finance and rural consumption only stays at the level of total rural consumption and has not stressed the structural problems of rural consumption. Can digital inclusive finance promote the upgrade of rural consumption structure? To what level can digital inclusive finance promote the upgrading of rural consumption structure? Therefore, it is of great theoretical value to study the upgrading of rural consumption structure from the micro level. Can the current digital inclusive finance benefit the elderly and help break the vulnerability of the elderly to enjoy finance? In this regard, evidence of heterogeneity remains to be provided.