Ozone pollution, cash crop production, and farmer adaptation: evidence from China

Surface ozone pollution has emerged as a major threat to agricultural productivity, yet evidence on its impacts on high-value cash crops and farmers’ adaptive responses remains limited. Combining a household-level panel from the Chinese National Fixed-Point Survey with high-resolution pollution and weather data from 2003 to 2013, we find that rising ozone concentrations significantly reduced farm income of fruit growers, primarily driven by ozone-induced reductions in fruit yields, total production, and labor productivity. Sugar crops also experienced significant yield losses, while other cash crops exhibited negligible responses. Due to limited adaptive capacity, fruit growers responded by abandoning ozone-damaged plots, reducing input use, and reallocating labor towards off-farm employment, resulting in persistent income losses with little evidence of longer-run adjustment. In contrast, sugar producers offset yield losses by expanding cultivated area and increasing material inputs, maintaining output and income. These findings highlight the critical importance of ozone-control policies and targeted support to strengthen farmers’ adaptive capacity, particularly for fruit growers who are most vulnerable to rising ozone exposure.