One longstanding research issue in agricultural marketing is the relationship between farm marketing channels and farm profitability. Due to the increasing consumer demand for food safety, direct‐to‐consumer marketing channels have been promoted. However, recent evidence shows that the adoption rate of farms that use direct‐to‐consumer marketing channels is still low, and it is not clear whether they can increase farm profitability. This study contributes to this issue in several ways. First, we examine whether the choice of different marketing channels, including sales to wholesalers, wholesale markets, and direct‐to‐consumer outlets by farm households affects farm profitability. Second, we discuss the mechanism behind these evident effects. We construct a large‐scale sample of fruit and vegetable farms drawn from the 2015 Taiwanese Agriculture Census Survey and estimate a semiparametric multivalued treatment effect model. Although the government is promoting direct marketing, we find that wholesale markets are the most profitable marketing channel for farms in Taiwan. Furthermore, results from the quantile analysis shows that this finding is more pronounced for farms with higher profits. With respect to the mechanism behind these observed effects, we find that profit differentials between marketing channels are likely attributable to the use of pesticides and fertilizers on farm production. [EconLit Citations: Q12, Q13].
Given the increasing threat of climate change to agriculture, determining how to achieve farm sustainability is important for researchers and policy makers. Among others, protected cultivation has been proposed as a possible adaptive solution at the farm level. This study contributes to this research topic by quantifying the effects of the use of protected cultivation facilities on farm sustainability. In contrast to previous studies that relied on small-scale random surveys, a population-based sample of fruit, flower and vegetable farms was drawn from the Agricultural Census Survey in Taiwan. Propensity score matching, inverse probability weighting and inverse probability weighting regression adjustment methods were applied. Empirical results show that the use of protected cultivation facilities increases farm profit by 68–73%, other things being equal. This finding is persistent when farms suffer from disaster shocks. Moreover, the changes in farm labor use can be seen as a mechanism behind the positive effect of the protected cultivation facility use on farm profit. Our findings suggest that agricultural authority can consider subsidizing farms to increase the adoption of protected cultivation facilities to mitigate the risks resulting from natural disaster shocks.
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