The Short-term Impact of Sustainable Agriculture Policy on Farmers’ Economic Welfare in China

Abstract

Half of the Chinese population still consists of farmers. To increase their productivity, sustainable agriculture offers essential approaches while protecting the environment. Unlike the existing literature focusing on the long-term effects of sustainable agriculture on economic welfare, the current research examines how sustainable agriculture impacts the various aspects of farmers’ welfare in the short term. We used data from the China Health and Retirement Longitudinal Study (CHARLS) and the Chinese National Agricultural Sustainable Development Plan (2015-2030). To investigate the impact of sustainable agriculture policy on economic welfare, we also employed the Difference-in-Differences (DID) model which helped address the endogeneity problem. After the DID regression, we discovered that sustainable agriculture has a negative impact on farmers’ annual household incomes and overall health status. However, it increases the annual working time of farmers and their willingness to participate in agricultural work. To ensure the reproducibility and reliability of the result, we did the robustness test by merely keeping the key independent variables on each regression. We also employed two sets of placebo tests and an alternative DID approach for each key dependent variable. Since all the regressions are robust and all results are significant, the initial hypothesis of this paper was demonstrated. We also propose some policy suggestions based on these results.