Effect of agricultural products safety production technologies on elasticity of substitution

Food safety is related to public health and has been highlighted worldwide. In order to motivate peasants to adopt food safety production techniques sustainably, what is the relationship between food safety production technologies and production factors and how these technologies work on food safety are important but still remain to be answered. This study explores the mechanism how food safety production techniques improve food safety and quality by factor allocation effect which can be decomposed into factor substitution effect and factor output effect. In order to address these problems, we constructed a theoretical framework based on biased technological change and explained how food safety production technologies affect factor output and substitution elasticity, especially output elasticity of fertilizer and pesticides and factor substitution elasticity between them and other factors. On the basis of theoretical framework, empirical model was constructed using a two-year pooled-data of household survey gathered from main vegetable production areas around Bohai bay. The survey was conducted in Beijing, Tianjin, Hebei, Shandong and Liaoning covering household characteristics, cost-benefit situation and food safety production technology adoption. By employing stochastic frontier translog production function, accurate output elasticity of fertilizer and pesticide and substitution elasticity between them and three other kinds of input factors(labor, land and other input) could be estimated accurately. In order to eliminate endogenous problems induced by indirect path of food safety production technologies on factor substitution elasticity through factor output elasticity, simultaneous equations was adopted. The result showed that:1)according to the result of stochastic frontier translog function, output elasticity of fertilizer was negative which proved that fertilizer had been overused. Output elasticity of pesticides was near zero indicating that pesticide had damage abatement effect rather than production increasing effect.2) Food safety production technologies reduced fertilizer and pesticide use through increasing output elasticity and substitution elasticity of fertilizer or pesticide to other input factor.For example, insect proof net decreased the output elasticity of fertilizer and pesticides, greenhouse fumigation had negative effect on substitution elasticity of pesticide to land. This indicates that the food safety production techniques do have factor allocation effect and this factor allocation effect can be decomposed into factor output effect and factor substitution effect, but the indirect path working on substitution elasticity through output elasticity of fertilizers or pesticides has not been supported. 3)Greenhouse disinfection by high temperature and smoke could reduce fertilizer and pesticide input effectively through increasing the output elasticity and decreasing the substitute elasticity of pesticide to land, soil disinfection significantly could also improves output elasticity of fertilizer thus reduce fertilizer use. 4) The effect of some safety-ensured and quality-promoted technologies, for instance, insect proof net, is to stabilizing volatilities of yield, but not increasing yield, thus can induce the negative effect on output elasticity of fertilizer and pesticide. 5) Application of quality and safety production technology needs a supplementary input of capital, labor and other factors. On the one hand, this induced that the indirect path of food safety production technologies on factor substitution effect through factor output effect is not significant; on the other hand, this also intensifies the substitution of fertilizer for labor. © 2019, Editorial Department of the Transactions of the Chinese Society of Agricultural Engineering. All right reserved.