A Small Act Towards Circular Bioeconomy: Adoption of Integrated Crop‐Livestock System and Its Impacts on Fertiliser Use

The integrated crop‐livestock system (ICLS) involves rural households simultaneously engaging in crop cultivation and livestock rearing, embodying the principles of a circular bioeconomy. In this system, crop cultivation produces straw as livestock feed, while livestock rearing generates manure that enriches the soil for crop production. This small‐scale circular model enables farmers to efficiently utilise renewable natural resources, such as crop residues and livestock waste, as sustainable alternatives to non‐renewable, fossil‐based inputs like chemical fertiliser. This paper analyses rice farmers' adoption of ICLS and its impact on fertiliser use using data collected from rural China. This study employs probit two‐stage least squares and the endogenous treatment effect model to address the endogeneity of ICLS adoption. The results indicate that ICLS adoption significantly increases expenditure and application frequency of bio‐fertiliser, while its impact on chemical fertiliser use is insignificant, though negative. The negative effect of ICLS adoption on chemical fertiliser use is only observed among young farmers. ICLS adoption is correlated with an increase in farm revenue. These findings suggest that reducing chemical fertiliser use and increasing bio‐fertiliser use, facilitated by ICLS adoption, do not compromise food security and contribute to the transition towards a circular bioeconomy.