Labor Exit Without Land Exit: Off-Farm Employment and Farmers’ Adoption of Agricultural Production Trusteeship in China

Abstract

Agricultural production trusteeship (APT) represents an innovative model of agricultural socialized services in which specialized service organizations provide scaled operations to smallholders without transferring land rights. It can effectively address rural labor shortages while contributing to China’s grain security and agricultural modernization by improving production efficiency and promoting more sustainable resource allocation. Using survey data from farm households across six Shandong cities, this study applies an Ordered Probit model to examine how off-farm employment influences farmers’ adoption of APT, together with its underlying mechanisms and heterogeneous patterns. The results show that a higher share of household labor engaged in off-farm employment is associated with a higher probability of APT adoption. This association is stronger under flexible employment model and weaker as the location of off-farm work becomes more distant. Mechanism analysis shows capital endowment mediates the association between off-farm employment and APT adoption, with physical capital having the strongest effect and economic capital the weakest. Higher risk perception weakens the positive effect of off-farm employment on farmers’ adoption of APT. These findings provide novel evidence and practical policy implications for improving APT implementation and facilitating smallholders’ effective participation in modern agricultural production systems.