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How does agribusiness-led contract farming affect the rural common prosperity: empirical evidence from China

Year: 2026

Type: article

Abstract: Agribusiness-led contract farming is widely recognized as an institutional arrangement that reduces transaction costs and stabilizes smallholder incomes, yet its macro-level implications for rural common prosperity remain insufficiently understood. Using prefecture-level panel data from 272 Chinese cities over 2015–2023, this study empirically examines how agribusiness-led contract farming affects rural common prosperity through the dual lenses of affluence and sharing. Baseline estimates show that agribusiness-led contract farming significantly raises rural disposable income while narrowing both inter-city rural income gap and urban–rural income disparities. These effects operate through enhancing agricultural labor productivity and facilitating non-agricultural employment. Heterogeneity analyses reveal stronger impacts in industrially weak, remote, and economically lagging regions. Spatial econometric estimates further indicate that the positive spillover effects of agribusiness-led contract farming depend more on economic connectivity than on geographic proximity alone. Policy implications include scaling up agribusiness-led contract farming in underdeveloped areas, strengthening rural vocational training, and fostering inter-regional value-chain linkages.

Source: Frontiers in Sustainable Food Systems

DOI: 10.3389/fsufs.2026.1946413

Authors: Zhengyue Shen, Tingting Liu, Bingnan Guo, Ning Ding, Jing Cheng

Institutions: Jiangsu University of Science and Technology, Columbia University

Language: English

Topic: Agricultural Innovations and Practices

Subfield: General Agricultural and Biological Sciences

Field: Agricultural and Biological Sciences

Domain: Life Sciences

SDGs: Decent work and economic growth, No poverty, Zero hunger, Reduced inequalities

Open Access status: gold

Estimated APC paid: $2,353