Outsourcing Agricultural Production: Evidence from Rice Farmers in Zhejiang Province

China has recorded positive grain production growth rates for the past eleven consecutive years. This is a remarkable achievement given that China’s rapid industrialization and urbanization has led to a vast reduction of arable land and agricultural labor to non-agricultural sectors. While there are many factors contributing to this happy outcome of China’s grain production, one contributing factor that has begun to receive increasing attention is the emergence of agricultural outsourcing, a new rural institution that has emerged in recent years. This study aims to contribute to the limited but growing literature on agricultural outsourcing in China. Specifically, this study analyzes factors affecting farmers’ decisions to outsource any or some production tasks using data from rice farmers in Zhejiang province. Results from a logistic model show that farm size, prices, and government subsidy encourage farmers to outsource while ownership of agricultural machines and land fragmentation have negative effects on farmers decisions to outsource any task. Results also showed that determinants of outsourcing decisions vary with the production tasks that farmers outsourced.

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Conference Paper/ Presentation
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JEL Codes:
D24; O12; O13

 Record created 2017-04-01, last modified 2018-01-23

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