Can the outsourcing improve the technical efficiency of wheat production with fertilization and pesticide application? Evidence from China

Fertilizer and pesticide inputs (FPI) can provide the growth of wheat production while causing environmental pollution and agri-product quality decline. Agricultural production outsourcing has been introduced to solve the above-mentioned dilemmas. It is noteworthy whether agricultural production outsourcing can improve technical efficiency (TE) by optimizing resource allocation. The study aims to examine the effect of outsourcing of fertilization and pesticide application (OF and OPA) on TE. It also tests moderating effect of plot and contiguous cropping (CC) based on 1018 farmers from three provinces. The results demonstrated: (a) The cost OF and OPA had a negative and then positive impact on TE. (b) The moderating effects of plot and CC were tested. (c) Smaller-than-average groups were more sensitive to cost of the OF and OPA. The findings implied: (a) Negative effect of outsourcing can be mitigated by formulating a standard for application of fertilization and pesticide and developing an insurance market. Training should be provided so that farmers can choose the appropriate times of outsourcing. (b) High-standard farmland construction and CC are essential strategic orientation in agricultural development. (c) Farmers with different endowments should be guided to reasonably purchase OF and OPA, and subsidy should be provided.