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IARRP team reveals the impact mechanism of farmers' risk preference on the adoption of agricultural innovation technology

By IARRP | Updated: 2023-03-15

The Innovation Team of Agricultural Allocation and Regional Development of the Institute of Agricultural Resources and Regional Planning (IARRP) of the Chinese Academy of Agricultural Sciences (CAAS) conducted in-depth research on the promotion status, existing problems and improvement paths of innovative seeds in China's grain production areas. Meanwhille, this paper revealed the impact of risk preference on the adoption of agricultural innovative seeds from the perspective of farmers, and introduced the mechanism of interlinked credit and insurance contract. The findings and research conclusions provide a scientific theoretical basis and decision-making reference for improving the adoption rate of agricultural innovation seeds. The relevant research results were published in the Journal of Innovation & Knowledge under the title of "Risk Preference, Interlinked Credit and Insurance Contract and Agricultural Innovative Technology Adoption".

The researcher Li Jianping pointed out that ensuring the stable and safe supply of food and important agricultural products is the top priority in building a strong agricultural country, especially for a country with a large population like China. In 2022, improved varieties made a 45% contribution to the increase of grain production, providing essential support for successive bumper grain harvests and the stable production and supply of important agricultural products. However, the current promotion of agricultural innovative seeds mainly relies on government power, and farmers are not very enthusiastic in understanding and adopting them, which has become a bottleneck problem plaguing the effective implementation of this technology. Among them, individual farmers' risk aversion and credit rationing are important impeding forces. Clarifying the key influencing factors of the promotion of innovative seeds and explaining policies are the key to solving current technology promotion problems, and is essential to realize becoming an "agricultural power" and implementing the "food crop production strategy based on farmland management and technological application".

Based on the micro-survey data of 688 grain farmers, this study uses the method of experimental economics to empirically analyze the influence of farmers' risk preference and interlinked credit and insurance contract on the adoption of innovative seeds. The study found that farmers with higher risk tolerance are more likely to adopt innovative seeds, and the application of interlinked credit and insurance contract directly promotes the adoption of innovative seeds by farmers, and indirectly improves the application of innovative seeds by alleviating farmers' risk aversion and risk rationing.

The research results have the following theoretical and practical significances. First, the theoretical mechanism of risk preference and interlinked credit and insurance contract affecting the adoption of innovative technologies by farmers is systematically proposed, and empirical verification is carried out using a large amount of research data. Second, the introduction of experimental economics into the research framework overcomes the disadvantages of inaccurate data surveys and endogeneity caused by traditional questionnaire surveys. Third, it effectively strengthens the systematic promotion and utilization of innovative seed technologies, and provides a decision-making basis for government departments to formulate policies for increasing grain production in grain-producing areas and farmers' incomes.

Postdoctor Wu Haixia from the IARRP is the first author of the paper, and researcher Li Jianping is the corresponding author. The research results were funded by the National Modern Agricultural Industrial Technology System, the National Natural Science Foundation of China and other projects.

It is reported that the Journal of Innovation & Knowledge is a well-known journal in the field of management, dedicating to promoting the development of theory, practical innovation and knowledge in various fields, such as economics, business and management, engineering, science and education. In the Web of Science, its JCR division is in Q1, and it is also in the Q1 division of the Chinese Academy of Sciences. This journal is a top one in the subject field, and in the field of business and management, it ranks 15th in the world, with an Impact factor of 11.22.

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