Determinants and impacts of outsourcing pest and disease management

Abstract

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.

What Are the Effects of Participation in Production Outsourcing? Evidence from Chinese Apple Farmers

“…In the case of heterogeneity between participants and non-participants in the outsourcing of apple production, the PSM model was used to compare apple production efficiency and income differences between participants and non-participants. The decision of farmers to participate in the outsourcing of apple production is the result of self-selection; the apple farmers who have more labor engaged in apple production and a high degree of concurrent business do not need to outsource, but most farmers involved in the outsourcing of apple production usually have a high level of education, many years of apple planting experience, and a large scale of apple planting [36]. Outsourcing participants and non-participants are clearly different in their individual, household, and apple production characteristics, mainly occur because farmers decide whether to participate in outsourcing by themselves (self-selection).…”

Does outsourcing affect agricultural productivity of farmer households? Evidence from China

“…Worldwide rural areas have historically shown weak economic development, and promoting rural development has always been a main goal of governments (Gary and John, 2013; Guo et al , 2019). In rural areas, improving agricultural productivity is an important goal (Ma et al , 2018c; Sun et al , 2018). However, when China reformed and reopened in the 1980s, its economy entered in a period of rapid growth, meanwhile the rapid urbanization that accompanied this growth led a lot of rural labor to migrate and work in urban areas (Xu et al , 2015, 2018).…”

“…Many farmer households choose to outsource some agricultural production to address their lack of labor. Namely, outsourcing means nonfamily members undertake some or all the agricultural production process (Wolf, 2003; Gillespie et al , 2010; Sun et al , 2018).…”

“…Moreover, Marx and Engels (1972) insisted that labor division could increase production efficiency on the premise of achieving agricultural-scale operations. Conversely, empirical research shows that the labor division in agriculture is feasible and effective (Wolf, 2003; Picazo Tadeo and Reig Martínez, 2006; Chen et al , 2012; Sun et al , 2018; Zhang et al , 2018). Wolf (2003) analyzed the farming incomes of 65 dairy farmers from America and noted that outsourcing could produce economies of scale.…”

“…harvesting). Sun et al (2018) explored the relationship between outsourcing and rice yields and found that outsourcing professional services could improve rice yields by 4.1%. In addition, Sheng and Chancellor (2019) and Yi et al (2019) also confirmed that outsourcing could improve agricultural productivity by econometric model.…”