Village collective services increase farm household incomes in Sichuan

Researchers Xiaoming Guo and Jiahao Li from the Rural Development Institute at the Sichuan Academy of Social Sciences found that collective agricultural services significantly increase the income of smallholder farm households in Sichuan Province, China.

The study analyzed data from 1,311 smallholders who manage less than thirty mu of land to see how village-level collective economic organizations impact rural earnings. The researchers used a three-tier service network in Sichuan that includes 34,000 providers.

These organizations provide services such as machinery operations, field management, and pest control. The study found that these services specifically help during the active cultivation process. These in-production services provide the most significant economic benefits because they replace manual labor, which is often scarce in areas where young people have moved away. The findings show that collective services help different groups in different ways.

Households with lower education levels see a major boost in income because the collectives provide standardized support and help them navigate complex technologies. The services also provide the highest marginal returns in lower-income villages where commercial market alternatives are less available. The study also identified three main ways these services help farmers. They encourage households to outsource production tasks, increase participation in cooperatives, and improve the quality of cultivated land.

Better village governance, specifically through democratic decision-making and standardized financial management, further magnifies the benefits of these collective services.