The Impact of Farmers' Borrowing Behavior on Agricultural Production Technical Efficiency

TL;DR

This study investigates how farmers' borrowing behavior affects agricultural technical efficiency in China, revealing positive impacts especially among low-income farmers, and offers policy insights for rural financial services.

Contribution

It empirically analyzes the influence of farmers' borrowing behavior on agricultural efficiency using CFPS data, applying SFA and Tobit models, which is a novel combination in this context.

Findings

Borrowing positively impacts agricultural technical efficiency.

Low-income farmers benefit most from borrowing.

Household characteristics influence efficiency levels.

Abstract

The effectiveness of farmer loan policies is crucial for the high-quality development of agriculture and the orderly advancement of the rural revitalization strategy. Exploring the impact of farmers' borrowing behavior on agricultural production technical efficiency holds significant practical value. This paper utilizes data from the 2020 China Family Panel Studies (CFPS) and applies Stochastic Frontier Analysis (SFA) along with the Tobit model for empirical analysis. The study finds that farmers' borrowing behavior positively influences agricultural production technical efficiency, with this effect being especially pronounced among low-income farmers. Additionally, the paper further examines household characteristics, such as household head age, gender, educational level, and the proportion of women in the family, in relation to agricultural production technical efficiency. The findings provide policy recommendations for optimizing rural financial service systems and enhancing agricultural production technical efficiency.