Modernizing smallholder agriculture and achieving food security: An exploration in machinery services and labor reallocation in China

Abstract This study discusses the modernization of smallholder agriculture in China, where most farms are small, and farms' parcels are fragmented. The study puts forward a framework of agricultural modernization by vertical division of labor and specialized production in agriculture. We posit that hiring machinery services could be a pathway to connect smallholders with modern agriculture and achieve food security in China. Using household‐level data from China, this study examines how hiring machinery services affects farm productivity and rural households' welfare. Findings show that mechanization services increased rural Chinese families' food security and agricultural productivity. Hiring machinery services improves smallholders' income by influencing the input efficiency of maize production and increasing participation in off‐farm work. Our findings highlight the importance of technology to improve smallholder agriculture and food security, not only in China but also in other South and Southeast Asian countries.