Path to reducing pesticide input: Is agricultural production outsourcing effective?

Excessive pesticide application in intensive agricultural systems poses serious environmental and health risks, yet the pathway to reducing pesticide input while maintaining crop yields remains debated. Existing approaches focus predominantly on the application stage itself, through technological substitution or regulatory mandates, with limited attention to upstream production processes. This study investigates whether agricultural production outsourcing contributes to the reduction of pesticide input in wheat production in China through a systemic prevention pathway. Using panel data from the China Land Economic Survey (CLES, 2020–2022) and employing a comprehensive identification strategy that combines propensity score matching, two-stage least squares, and double machine learning, we find that agricultural production outsourcing significantly reduces wheat pesticide expenditure by 41–57 yuan per mu (approximately 35 to 40%). This effect is mainly concentrated in upstream and midstream operations that influence baseline pest pressure rather than the spraying process itself, confirming that outsourcing suppresses chemical demand at source before any application decision is made. The pesticide-reducing effect is significantly larger for wheat than for rice, reflecting differences in mechanization compatibility, pest ecology, and the maturity of the service market. Mechanism analysis identifies three channels: improved mechanization levels, economies of scale arising from land concentration, and increased commercialization rates. These findings suggest that organizational innovation in the agricultural service market provides an incentive-compatible pathway for smallholder systems to achieve a balance between productivity and environmental sustainability, complementing existing regulatory and technological approaches to pesticide governance.