The adoption of organic soil amendments and farm economic performance: Evidence from wheat production in China

Abstract

This study examines the determinants of adoption of organic soil amendments (OSAs) such as organic fertiliser and farmyard manure and its impact on crop yields and net returns, using household survey data of 558 wheat farmers in China. We employ an endogenous switching regression model to account for selection bias stemming from both observable and unobservable factors. The empirical results show that household size, dependency ratio, machine ownership and non-paid labour are main factors that determine farmers’ decision to adopt OSA, and the OSA adoption has a positive and statistically significant impact on wheat yields and net returns. In particular, the treatment effects of OSA adoption are to increase wheat yields and net returns by appropriately 22 and 24 per cent, respectively. Moreover, disaggregated analysis by farm size reveals that large-scale households tend to obtain higher wheat yields and net returns than their small-scale counterparts.