The Effect of Uncertainty of Risks on Farmers’ Contractual Choice Behavior for Agricultural Productive Services: An Empirical Analysis from the Black Soil in Northeast China

Abstract

Regulating farmers’ choice of agricultural production service (APS) contracts can help maintain the stability of transactions, enhance agricultural production efficiency, protect farmers’ rights and welfare, stimulate the healthy and sustainable development of service organizations, and promote the economic benefits of agriculture. Under the uncertainty of risk (RU), farmers’ willingness to sign a regulated service contract after purchasing APS is a key factor in reaching an efficient and high-quality partnership. Based on the survey data of the black soil area in northeastern China, this study uses the Heckman two-stage model and analyzes it under the logical framework of APS purchases and contractual choice behavior (CCB) under the role of RU. The main findings are as follows. First, the RU has a significant “inducing” effect on farmers’ CCB, and the higher the RU, the more farmers tend to make formal written contracts; among them, each unit increase in business risk increases farmers’ choice of written contracts by 0.797 units, which is an important factor affecting CCB. Second, farmers’ personal trust level played a positive moderating role in influencing CCB. Compared to the low trust level group, farmers in the high trust level group had a diminished degree of influence on CCB, but the intensity was relatively weak. Third, farmers’ personal, family, and social characteristics all influence their behavioral decision-making processes. In order to reduce the risk level of cooperation between farmers and service providers, which can promote the standardization of cooperation contracts, this study suggests that the government should use the publication of manuals and other forms to carry out legal literacy, promote labor market information transparency, reduce service risks, and enhance the effectiveness of the linkage between farmers and service providers.