How Operation Scale Improve the Production Technical Efficiency of Grape Growers? An Empirical Evidence of Novel Panel Methods for China’s Survey Data

Abstract

The agricultural production technical efficiency is the key to improving the sustainability of an agricultural section. Taking survey data of 314 grape growers in Fujian Province, China, this paper presents the impact of operation scale on their technical efficiency under a rain-shelter cultivation mode. Through the threshold effect model, we find an inverted U-shape trend between operation scale and the growers’ technical efficiency, and the threshold is 18 mu. We also further introduce the employee input to analyze the mediating effect. The test results show that with the expansion of operation scale, the efficiency loss caused by greater employee input gradually suppresses the positive impact of economies of scale on technical efficiency—that is, there is a significant suppressing effect. Hence, this paper argues that, in the process of promoting agricultural green production, the government should guide farmers to a ‘natural flow’ to moderate scale management by reducing transaction costs, such as land transfer costs, and should not blindly encourage growers to expand their scale. At the same time, research and development of labor-saving technologies should be enhanced to reduce labor demand and cost in the production process.