Why China’s AMS Market Is Difficult to Develop Sustainably: Evidence from the North China Plain

The agricultural machinery service (AMS) market enables China to rapidly realize agricultural mechanization on the basis of smallholder farmers. Academics generally believe that China has created a model of agricultural mechanization that matches small-scale farmers with large-scale machinery. Howev...

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Bibliographic Details
Published in:Sustainability 2023-01, Vol.15 (1), p.204
Main Authors: Wei, Suhao, Lu, Yangxiao
Format: Article
Language:English
Subjects:
Agricultural equipment
Agricultural equipment and supplies industry
Agricultural industry
Agricultural machinery
Agricultural production
Agricultural research
Efficiency
Farm equipment
Farm machinery
Farmers
International economic relations
Machinery
Magneto-electric machines
Market segmentation
Mechanization
Profits
Small-scale farming
Subsidies
Surveys
Sustainable development
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Summary:The agricultural machinery service (AMS) market enables China to rapidly realize agricultural mechanization on the basis of smallholder farmers. Academics generally believe that China has created a model of agricultural mechanization that matches small-scale farmers with large-scale machinery. However, in recent years, the transformation of the AMS market from prosperity to decline has been under-analyzed. This paper used farm and AMS supplier survey data from the North China Plain to estimate the links between acquaintance transactions, segmentation of the AMS market and losses in terms of transaction efficiency. We found that although the AMS from acquaintances is more expensive and less efficient than from non-acquaintances, farmers still buy from acquaintances because this reduces the transaction costs of the AMS. However, acquaintance transactions have led to the segmentation of the AMS market, reducing the transaction efficiency of the AMS. The AMS market has gradually changed from open to closed in China. The Chinese government should determine how to adjust policies to promote the sustainable development of the AMS market.
ISSN:2071-1050
2071-1050
DOI:10.3390/su15010204