The Value of Straw: The Effect of Comprehensive Utilization of Crop Straw on Grain Output

Comprehensive utilization of crop straw (CUCS) is a critical pathway toward sustainable agricultural development, synergizing food security and carbon neutrality goals. However, there remains a lack of systematic empirical evidence regarding its macro-level productivity associations and the conditions under which they materialize. Based on China’s provincial panel data from 2011 to 2023, this paper takes the CUCS pilot policy launched in 2016 as a quasi-natural experiment and employs the difference-in-differences (DID) model to examine the association between CUCS and grain yield, along with its moderating factors and environmental co-benefits. This study yields four main findings. First, CUCS is associated with higher grain yield in pilot regions, and this finding remains robust after a series of endogeneity and robustness checks. Second, the positive association between CUCS and grain output appears to be moderated by fiscal support and innovation–entrepreneurship. The relationship is more pronounced in regions with higher fiscal expenditures on agriculture and environmental protection, as well as more agricultural patents and agricultural enterprises. Third, heterogeneity analysis suggests that the CUCS–grain output association tends to be stronger in regions with richer groundwater resources and more agricultural meteorological observation stations. Fourth, extended analysis indicates that CUCS is also associated with lower particulate matter and agricultural carbon emissions, a pattern consistent with synergistic environmental benefits. By integrating economic and environmental dimensions into a unified analytical framework, this study provides empirical evidence on the contribution of comprehensive straw utilization to grain output and highlights the enabling role of fiscal and innovation environments. These findings offer integrated evidence from China for the policy evaluation of climate-smart agriculture and contribute to the broader sustainable development agenda.