Can socialised agricultural services balance equity and efficiency? Analysis from the perspective of government-market relationships

Socialized agricultural services (SASs) are becoming increasingly popular in developing countries to address future farming challenges. In China, there is an ongoing debate in the academic community regarding the equity and efficiency issues arising from whether SASs have a ‘smallholder crowding out’ effect. By using data from the 2018 China Labour Force Dynamics Survey, we first investigate the equity problem of SASs using a Logit model and then analyse the efficiency problem of SASs using the propensity score matching model. Specifically, we examine whether smallholder farmers have equal access to SASs when different entities provide services and whether SASs can effectively increase farmer cultivation returns. We find that smallholder farmers have equal access to SASs and that SASs can significantly improve farmer returns on grain production, meaning SASs can balance efficiency and equity. Furthermore, SASs can enhance the efficiency of land resource allocation by accelerating land transfer, leading to increased returns. These findings indicate that China should accelerate the construction of SAS system, improve relevant rules for the SAS market, and support smallholder farmers in adopting SASs.