Can whole steps of grain production be outsourced? Empirical analysis based on the three provinces of Jiangsu, Jilin, and Sichuan in China

Abstract

The development of outsourcing services for agricultural management such as pest control in China's grain production has been sluggish for a long time, while the level of outsourcing services in harvesting, land preparation and sowing are relatively high. Taking rice and maize production in Jiangsu, Jilin, and Sichuan provinces in China as examples, to discover whether grain production could realize whole steps outsourcing. Two necessary conditions for the supply of outsourcing services are technological progress, which leads to increases in specialized production and economies of scale, and the market scale, which is sufficient to meet the realization of the above potential economies of scale. The results showed that outsourcing services for pest control or harvesting had varying degrees of economies of scale, for which the outsourcing services in pest control were smaller and the marginal growth space of the economies of scale with technological change was also smaller. Determined by the operational characteristics of pest control itself, the market scale of its professional services is small. Therefore, to realize the whole steps outsourcing of grain production, not only is technological innovation required but also more effective policy interventions for overcoming the constraints of market scale. Such interventions include: (1) Optimizing crop layouts between planning regions and reducing land fragmentation; (2) Supplying timely and effective inter-regional agricultural information for service providers with the help of information technology.

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