How Rural Industrial Integration Affects Sustainable Farmers’ Income Growth and Agricultural Modernization in China

Promoting rural industrial integration (RII) is crucial for achieving rural revitalization and agricultural modernization. To empirically evaluate the impact of China’s Rural Industrial Integration Demonstration Park (RIIDP) policy, this study treated the RIIDP policy as a natural experiment, and implemented a staggered difference-in-differences model (DID) to examine the policy’s effects on agricultural modernization and farmers’ income. The empirical findings demonstrate statistically significant positive impacts of the policy on farmers’ income, yielding an average annual increase of 2.1% (equivalent to 234 CNY) per capita and the income-increasing effect has sustained dynamic characteristics. The mechanism analysis reveals that the policy promotes the upgrading of agricultural industries and the improvement of production methods, realizing agricultural modernization and sustainable income growth. Heterogeneity analysis uncovers nuanced spatial and socioeconomic variations in policy effectiveness. The income-increasing effects prove particularly pronounced in counties characterized by lower educational level and greater fiscal capacity. Regional analysis further identifies stronger treatment effects in western and northeastern regions compared to eastern and central regions, suggesting diminishing marginal returns in more developed areas. This study provides empirical evidence on the efficacy of a major rural policy, which is conducive to achieving sustainable rural economic development. The findings provide practical guidance for agricultural transition economies seeking to advance agricultural modernization and increase farmers’ income.