Impacts of digital agricultural extension on allocation inefficiency costs:Evidence from cotton farmers in China

Enhancing allocation efficiency is vital for maintaining China's position as a leading textile producer. The adoption of information and communication technology (ICT) can improve the efficiency of farmers' input allocation. Nonetheless, limited evidence exists regarding the impact and extent of farmers' access to digital agricultural extension through subscribing to agricultural WeChat public accounts (WPAs) on allocation inefficiency costs. Using a 2019 farm household survey of cotton farmers in Xinjiang, this paper employs a primal system model to calculate farmers' allocation inefficiency costs and a two-stage residual inclusion approach model (2SRI) to estimate the effects of agricultural WPAs subscription on allocation inefficiency costs and allocation inefficiency. The empirical findings indicate that the average allocation inefficiency cost is 3.264 Yuan per kilogram, constituting 45.8% of cotton production cost. Our results demonstrate that subscribing to agricultural WPAs can significantly reduce farmers' allocation inefficiency costs by 19.5% and decrease allocation inefficiency by 0.079. Consequently, promoting smallholder farmers' access to digital agricultural extension serves as an effective strategy to enhance allocation efficiency and lower costs.