The impact of toilet revolution on fertilizer usages in rural China

China’s traditional self-sufficient economy has maintained a close relationship between agricultural production and rural livelihoods for thousands of years, with human waste playing a crucial role in closing the nutrient cycle. However, the recent toilet revolution program in rural China, spurred by significant government investments in sanitation infrastructure, presents a potential disruption to this age-old nutrient cycle. Leveraging an extensive panel dataset from China’s official Fixed Observation Rural Survey (FORS) spanning 2009 to 2018 focusing on 21,747 farming households, we estimate the impact of adopting indoor sanitary toilets on household decisions regarding manure and chemical fertilizer usages using a two-way fixed effects (TWFE) approach. We further utilize the toilet revolution policy implementation at the village level as the instrumental variable for individual having toilets. We find that the introduction of indoor sanitation facilities leads to a notable decrease in both the probability of manure application and the amount of manure used by households, while concurrently increasing the chemical fertilizer usage and in particular the urea usage. Our study underscores the intricate interplay between advancements in rural sanitation, agricultural production decision-making, and the unintended environmental consequences arising from improved living standards in developing countries.