Threshold effect found in how farm services drive green productivity in China

Agricultural socialized services (ASS) — machinery rental, hired labor and technical consulting that cover the full production chain — can lift the green productivity of Chinese farms, but only once service provision crosses a measurable threshold, according to a new peer-reviewed study. Below that critical point, the effect on green total factor productivity is actually negative; above it, the effect turns significantly positive. The finding comes from an analysis of 7,794 farming households across 24 provinces, tracked using China Family Panel Studies (CFPS) data from 2014 to 2022.

The research, led by Tingyi Yang of the School of Economics and Management at Xi’an University of Technology, was published in ENGINEERING Agriculture under the title “Impact mechanisms and pathways of agricultural socialized services on agricultural green production in China under its dual-carbon goals” (DOI: 10.15302/J-FASE-2026676). The work is framed against China’s national targets of peaking carbon emissions by 2030 and achieving carbon neutrality by 2060. Agriculture accounts for roughly 25 percent of the country’s total greenhouse gas emissions, which has turned the green transformation of farming from an optional goal into a policy requirement.

Smallholders, however, face what the authors describe as a triple dilemma: insufficient funds, high costs and a lack of technical knowledge, all of which make it difficult to promote green technologies. ASS have been regarded as a key breakthrough because they allow individual farmers to access machinery, labor and expertise without owning them outright. Whether these services genuinely drive greener production — and under what conditions — had remained an open empirical question.

Methodologically, the study measured household-level agricultural green total factor productivity (AGTFP) using the slack-based measure global Malmquist–Luenberger (SBM-GML) index. To capture household circumstances, the team built a comprehensive index of rural household resource endowments spanning five dimensions — natural, economic, human, physical and social capital — with 21 indicators weighted through the entropy weight method. The analysis then applied a panel fixed-effects model, a moderation effect model, a dynamic panel threshold model and GMM estimation to the household panel data.

Three central results emerged. First, rural household resource endowments significantly and positively moderate the green effectiveness of ASS: households with richer resources are better able to use the services to achieve green efficiency gains. In other words, the same service provision produces different outcomes depending on what a household brings to the table in terms of land, capital, labor, skills and social connections.

Second, the threshold effect reveals what the authors call “critical point logic” in service provision. When service provision falls below the threshold, its impact on green productivity is negative; once the threshold is crossed, the effect immediately becomes significantly positive. This means that partial or limited service adoption may fail to deliver — or may even undermine — green productivity, while sufficiently comprehensive service provision shifts the outcome decisively in the green direction.

Third, the study identifies dual heterogeneity across regions and farm scales. Northeast China, with a mechanization rate of 98.2 percent and advantages in scale operation, shows the most prominent service effects. Large-scale farms of 0.4 hectares or more show significant green effects from services, while the effects for smallholders are not significant. This pattern suggests that the benefits of ASS are not distributed evenly across the farming population.

The authors argue that these findings address three gaps in the earlier literature: the lack of rigorous empirical testing based on large-scale panel data, the unopened “black box” of mechanisms — including how resource endowments moderate the relationship, whether non-linear thresholds exist, and whether farmers in different regions and at different scales respond consistently — and the long-standing absence of accurate household-level measurement of green total factor productivity. According to the study, these gaps had encouraged “one-size-fits-all” policymaking that was difficult to adapt to local conditions, leaving the green benefits of ASS unrealized.

For policy, the study proposes a three-pillar framework integrating endowment empowerment, differentiated strategies and multi-criteria carbon governance. The authors confirm that ASS can bring smallholders onto the track of modern agriculture, but only if resource empowerment lowers the adoption threshold — a point they link to the agricultural production trusteeship service projects promoted by China’s Ministry of Agriculture and Rural Affairs. They also propose an environmental–economic–livelihood three-dimensional assessment framework that incorporates indicators such as carbon emissions per unit of output and the share of green agricultural output value, moving agricultural carbon governance toward something “measurable and manageable”.

The scale heterogeneity finding carries a warning: if policies benefit only large farms, smallholders may be further marginalized. The study is presented as responding to agricultural emission-reduction demands under the dual-carbon goals while offering a micro-level pathway for the rural revitalization strategy. As with any observational panel analysis, the results describe associations and estimated effects within the studied households and provinces rather than guaranteed outcomes, but the threshold pattern offers a concrete benchmark for policymakers deciding how much service provision is enough to make green farming pay off.

Subject of Research: The effects and mechanisms of agricultural socialized services on agricultural green total factor productivity in China under dual-carbon goals.

Article Title: Under dual-carbon goals, how effective are agricultural socialized services? Data from nearly 8000 farming households reveal a “threshold effect”

Article References: Under dual-carbon goals, how effective are agricultural socialized services? Data from nearly 8000 farming households reveal a “threshold effect”. Original publication (Bibliographic details unavailable.)

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Keywords: agricultural socialized services, green total factor productivity, China, dual-carbon goals, threshold effect, smallholders, resource endowments, panel data, carbon emissions, rural policy, farm mechanization, CFPS