Do ICTs Boost Agricultural Productivity?

Zhu Qiubo ( ) 1, Bai Junfei ( ) 2, 3*, Peng Chao ( ) 4 and Zhu Chen ( ) 1朱秋博 白军飞 彭超 朱晨

1

College of Economics and Management, China Agricultural University, Beijing, China

2

Beijing Food Safety Policy and Strategy Research Base, Beijing, China

3

National Agricultural and Rural Development Research Institute, China Agricultural University

4

Research Center for Rural Economy, Ministry of Agriculture and Rural Affairs, Beijing, China

Abstract:

Based on panel data from the Rural Fixed Point Survey of the Ministry of Agriculture over the period 2004-2016 and supplementary survey data on information and communications technology (ICT) applications in the countryside, this paper employs the difference in differences (DID) method to analyze the effects of ICT applications on rural households’ agricultural total factor productivity (TFP) with mobile phone signal, internet and 3G mobile network connections as indicators, and decomposes and evaluates the constituent factors. Our findings reveal a positive effect of ICTs on rural households’ TFP, which primarily stemmed from rising agricultural technical efficiency. However, ICTs exerted no significant effect on agricultural technical progress during this paper’s data period due to limited rural human capital. These findings are consistent with robustness test results based on counterfactual and matching methods.

Keywords:

ICT applications, agricultural total factor productivity (TFP), agricultural technical progress, agricultural technical efficiency

JEL Classification Codes: D24, Q12, Q16

DOI: 10.19602/j.chinaeconomist.2020.11.02

1. Introduction

In the new era of Chinese socialism, China’s economy has started to transition from rapid growth to high-quality development. As part of the modern economic system, China’s agricultural sector has entered a critical stage of restructuring and shift towards higher quality and efficiency. China must increase agricultural productivity if it is to complete agricultural supply-side structural reforms and agriculture modernization. The Report to the 19th CPC National Congress called for raising total factor productivity (TFP), improving the quality of economic growth, implementing the “countryside rejuvenation strategy,” and modernizing agricultural production and operation as key elements of the strategy. The No.1 Central Document of 2018 further called for a shift of priority from agricultural yield to quality, innovation, and competitiveness. As China strives to modernize its agricultural sector, discussions on the key drivers of agricultural TFP growth are of great practical relevance.

The Chinese government has always attached great importance to information and communication technologies (ICTs) in agriculture, which play a unique role in optimizing resource allocation. Since