A Macro Perspective on the Relationship between Farm Size and Agrochemicals Use in China

Agrochemicals are overused in China. One strategy to reduce agrochemical use is to increase farm size because of the potential effect of economy of scale. Existing studies at a micro scale present mixed and often conflicting results on the relationship between agrochemical use and farm size. This study aimed to assess that relationship from a macro perspective using an aggregated panel dataset in 30 provinces in China from 2009 to 2016. The empirical results confirm the existence of both economy and diseconomy of scale effects on agrochemical use in China. The agrochemical application rates decreased as the proportion of farms between 0.667 and 2 ha increased. The diseconomy of scale existed when significantly larger farms, such as the farms larger than 3.34 ha, continued to emerge. Given the fact that 78.6% of farms are under 0.667 ha in China, our results suggest that the reduction strategy based on only expanding farm size might achieve some initial success in reducing agrochemical use, but the effect would fade away and be reversed as significantly large farms continue to emerge. These results have significant policy implications as China is proactively developing and implementing various policies and strategies to modernize its agriculture toward achieving its sustainability goals.