This study examined the effects of China's grain subsidy program, the largest food self-sufficiency project in the developing countries, on grain-sown areas within a context of liquidity constraints. A large household level panel was used to evaluate how the subsidy affects the cultivation schedule of farm households through the relaxation of households' liquidity constraints. Results suggest that in general, the grain subsidy program significantly improved farm householdsÕ grain planting areas for liquidity-constrained households. This finding provides a more comprehensive understanding of the effects of ChinaÕs grain subsidy than previous studies.
Purpose
The purpose of this paper is to investigate the determinants and impacts of outsourcing pest and disease management on rice production in China.
Design/methodology/approach
A multinomial endogenous treatment effects model which accounts for selection bias was used.
Findings
The results show that outsourcing decisions are driven mainly by the size of the farm, the age of the household head and other household characteristics. Further, the authors find that outsourcing labor for pest and disease control has no significant effect on pest control cost and rice yields, though it reduces the number of pesticide applications. Conversely, outsourcing of professional services can increase rice yields by 4.1 percent, and at the same time it increases pest and disease control costs by 50.6 percent. However, it is found that outsourcing of professional services exerts no significant impact on the farm profitability.
Practical implications
This study suggests that households with large farm size are more likely to outsource professional services and, therefore, service providers and governments should target those farmers to provide incentives and create greater awareness of the benefits from the outsourcing of professional services. Moreover, the increase in yields along with the government subsidy justifies the outsourcing of professional services by farmers. However, service providers and policy makers have a lot of leeway to come up with cheaper methods for pest and disease management in rice production.
Originality/value
This study is the first attempt to simultaneously evaluate the determinants and impacts of outsourcing pest and disease management on rice production in China.
This paper addresses the impacts of liquidity constraints on household postharvest commodity selling behavior. Using data collected from China's maize farmers, we find that households with debt, in general, sell their maize much earlier than debt‐free households, thus potentially losing inter‐temporal arbitrage opportunities. Segmenting our sample into wealthy and poor households, we find that the relationship between a liquidity constraint and postharvest sales is apparent only among poor households. Using the occurrence of an illness in children or an elderly household member as an instrument for liquidity, we control for potential endogeneity associated with liquidity. We find that poor households in which there were children or elderly people with sicknesses in previous years are more likely to sell maize early than other poor households.
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