Adoption and income effects of new agricultural technology on family farms in China

Abstract

Family farms are the main force that promotes the direct application of new agricultural technology to production. So what are the factors that affect the adoption of new agricultural technology by family farms, and can the adoption of new technology increase the operating income of family farms? Using cross-sectional data from 847 family farms, this study examines the determinants and impacts of multiple new agricultural technologies adoption on family farms’ income in China. To account for selection bias from both observable and unobservable factors, an endogenous switching regression model is employed to evaluate the effects of new agricultural technology on family farms’ income. The empirical results show that the adoption of new agricultural technology is affected by the endowment of farmers and the characteristics of family farms. After controlling for the selection bias, the adoption of new agricultural technologies has a positive and significant impact on family farms’ income. And the impact on the non-adopter family farms is much larger than adopter family farms. Heterogeneity analysis indicates that family farms with a larger area of arable land earn more from the adoption of new technologies than small farms. In all types of technology investigated, the new methods of pest control and the new chemical fertilizer technology have a relatively large impact on family farms’ income, while the new mechanical technology has the least impact on family farms’ income. The adoption of new technologies by family farms is more important for promoting the progress of agricultural science and technology. Therefore, it is necessary to take effective measures to overcome the obstacles to the adoption of new agricultural technologies and pay more attention to the use of new agricultural technologies to improve agricultural production efficiency.