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How does the improvement of farmers' financial literacy affect food production? Analysis of behavior and constraints based on element substitution and planting structure adjustment

Author

Listed:
  • Yichao Li

    (College of Management of Sichuan Agricultural University)

  • Xintong Xie

    (Southwest University of Finance and Economics)

  • Guihua Liu

    (College of Management of Sichuan Agricultural University)

  • Dingde Xu

    (College of Management of Sichuan Agricultural University
    Sichuan Center for Rural Development Research, College of Management of Sichuan Agricultural University)

Abstract

Food security is the foundation of national security, yet few studies have explored the impact of financial literacy on food production in the context of deepening rural financial development. Using data from the 2021 China Land Economy Survey, this paper theoretically and empirically analyzes the impact of factor substitution and cropping restructuring behavior on grain production brought about by farmers' financial literacy and further discusses the heterogeneous impact on grain production under different constraints. The results show that: (1) Farmers' overall financial literacy varies widely within the household, and the proportion of planting is still dominated by grain cultivation; (2) The increase of financial literacy has a significant inhibitory effect on grain cultivation area and grain mechanization; (3) Differences in the level of financial literacy and the difficulty of mechanical substitution will lead to heterogeneous effects on outcomes. The study recommends that governments should pay attention to the phenomenon of financial literacy-induced de-fooding. On the one hand, there is a need to make food production more economical and profitable for farmers; on the other hand, there is a need to regulate and advocate for comprehensive financial literacy and to reject profit-seeking.

Suggested Citation

  • Yichao Li & Xintong Xie & Guihua Liu & Dingde Xu, 2024. "How does the improvement of farmers' financial literacy affect food production? Analysis of behavior and constraints based on element substitution and planting structure adjustment," Food Security: The Science, Sociology and Economics of Food Production and Access to Food, Springer;The International Society for Plant Pathology, vol. 16(3), pages 721-733, June.
    • Handle: RePEc:spr:ssefpa:v:16:y:2024:i:3:d:10.1007_s12571-024-01443-2
    DOI: 10.1007/s12571-024-01443-2
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    Cited by:

    1. Huishuang Jin & Hui Liu, 2025. "The Impact of Agricultural Credit on Planting Structure: An Empirical Test of Factor Allocation," Land, MDPI, vol. 14(5), pages 1-22, May.

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