Economic benefits of agricultural mechanization services: An analysis of maize farmers

Abstract

With the rapid growth and development of the mechanization service market, purchasing mechanization services has become an important pathway for smallholder farmers to access mechanization. This study estimates the impacts of agricultural mechanization services on maize yield, household income, and income diversification, utilizing the 2020 China Rural Revitalization Survey data. This study treats mechanization service adoption as a dichotomous decision and examines adoption intensity, employing a conditional mixed process (CMP) model to address endogeneity. The results show that the adoption of mechanization services significantly increases maize yield, household income, and income diversification. Meanwhile, increasing the intensity of mechanization service adoption increases maize yield and income diversification, but does not significantly affect household income. We also found that rural households with low dependency ratios, large-scale farmers, and those living in the better-developed eastern and central regions (relative to the western region) are more likely to adopt mechanization services. Our findings highlight the crucial role of agricultural mechanization services in enhancing farmers' economic well-being, underscoring the need for government initiatives further to promote the development of mechanization services in rural areas.