Rice harvest losses caused by agency slack in China: a mediation analysis

Xue Qu, Daizo Kojima, Laping Wu and Mitsuyoshi Ando

Applied Economics, 2023, vol. 55, issue 10, 1129-1141

Abstract: This study built mediation analysis models to test the hypothesis that a moral hazard-measured as whether harvest operators’ work attitudes are serious-mediates the effects of mechanical harvest outsourcing on rice harvest losses based on a 1106-household survey in China. The major findings are as follows. First, the average rice harvest loss rate in 2016 in China was approximately 3.65%, equalling eight million tons of rice or one million hectares of farmland. Second, after addressing the potential endogeneity, we preliminarily found the mediation effect using the three-step method. The adjusted product of coefficients method from the Sobel test, distribution of the product test, and Markov Chain Monte Carlo test all indicated the significance of the mediation effect arising from work attitudes. Third, we observed the mediation effect through moral hazard for large-scale farmers, but not when farmers used combine harvesters. These results supported the presence of a moral hazard in mechanical harvest outsourcing and showed that combine harvesting could facilitate harvest loss reduction. Policymakers should consider regulating the principal – agent relationship in harvest outsourcing and encourage land transfers to form large-scale farms to promote combine harvesting. These are critical in achieving the sustainable development goal of halving food loss and waste worldwide.

Date: 2023
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DOI: 10.1080/00036846.2022.2096862

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