How does the improvement of farmers' financial literacy affect food production? Analysis of behavior and constraints based on element substitution and planting structure adjustment

Yichao Li, Xintong Xie, Guihua Liu and Dingde Xu ()
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Yichao Li: College of Management of Sichuan Agricultural University
Xintong Xie: Southwest University of Finance and Economics
Guihua Liu: College of Management of Sichuan Agricultural University
Dingde Xu: College of Management of Sichuan Agricultural University

Food Security: The Science, Sociology and Economics of Food Production and Access to Food, 2024, vol. 16, issue 3, No 11, 733 pages

Abstract: Abstract Food security is the foundation of national security, yet few studies have explored the impact of financial literacy on food production in the context of deepening rural financial development. Using data from the 2021 China Land Economy Survey, this paper theoretically and empirically analyzes the impact of factor substitution and cropping restructuring behavior on grain production brought about by farmers' financial literacy and further discusses the heterogeneous impact on grain production under different constraints. The results show that: (1) Farmers' overall financial literacy varies widely within the household, and the proportion of planting is still dominated by grain cultivation; (2) The increase of financial literacy has a significant inhibitory effect on grain cultivation area and grain mechanization; (3) Differences in the level of financial literacy and the difficulty of mechanical substitution will lead to heterogeneous effects on outcomes. The study recommends that governments should pay attention to the phenomenon of financial literacy-induced de-fooding. On the one hand, there is a need to make food production more economical and profitable for farmers; on the other hand, there is a need to regulate and advocate for comprehensive financial literacy and to reject profit-seeking.

Keywords: Financial literacy; Food production; Bartik IV; Planting structure; Advanced financial literacy (search for similar items in EconPapers)
Date: 2024
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DOI: 10.1007/s12571-024-01443-2

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