Does Digital Literacy Promote Farmers' Socialized Agricultural Service Adoption? Evidence from China's Thousand Villages Survey

Abstract

The rapid development of digital technologies is reshaping rural production, daily life, rural governance, and patterns of social interaction. Digital tools such as smartphones make farmers obtain market information and engage in rural governance. Digital literacy (DL) works as a crucial capability empowering farmers to engage in production and managerial decision-making, thereby affecting socialized agricultural service adoption. However, few studies have directly examined the influence of DL upon farmers’ adoption of socialized agricultural services. Our research investigated the effect of DL upon farmers’ socialized agricultural service adoption, using microdata from the 2023 China Thousand Villages Survey. It utilized a logit model to analyze the data and employed instrumental variables and other methods to conduct robustness checks. The study found that DL dramatically raised the probability that farmers adopted socialized agricultural services. As indicated by mechanism analysis, DL propels farmers’ socialized agricultural service adoption mainly through three channels: broadening information access, alleviating financing constraints, and facilitating the transformation of agricultural production and management practices. Moderation analysis showed that the higher the dependence of DL upon agricultural operating income and the degree of marketization in agricultural production and management, the stronger the driving force. However, if the level of digital village governance is higher, its marginal effect will be lower. In heterogeneity analysis, the effect of DL was more evident among male-headed households, households headed by individuals aged over 50 years, and households headed by individuals with junior high school education or below. These findings expand the analytical framework for the determinants of socialized agricultural service adoption, while providing evidence and policy perceptions of introducing modern agriculture based on division of labor into small farms through digital empowerment.

1 Introduction

In many developing countries, agricultural production is experiencing deep-going transformation. With rapid urbanization, continuous rural labor outflow, an aging agricultural workforce, and rising household labor opportunity costs, traditional small farming faces increasingly severe constraints on labor supply, production efficiency, technology adoption, and risk management (; ; ; ). Socialized agricultural services, a critical institutional arrangement linking smallholders to modern agriculture, can help farmers overcome the constraints arising from lack of household labor, machinery, and professional expertise by offering services such as mechanized field operations, agricultural input procurement, pest and disease control, technical guidance, harvesting, drying, storage, transportation, and full process management. Thus, they improve production efficiency and reduce production risks (; ). However, because of factors such as limited access to information, ability-to-pay constraints, difficulties in assessing service quality, and traditional production habits, farmers’ potential demand for socialized agricultural services often cannot be fully translated into actual adoption behavior (; ).

China forges a representative context, aimed at examining this issue. As a major agricultural country with a large number of smallholders (), China’s agricultural modernization partially depends upon land consolidation and farm expansion. Instead, it increasingly emphasizes integrating smallholders into the trajectory of modern agricultural development through socialized agricultural services, enabling them to indirectly share the benefits of mechanization, specialization, and scaled-up operations without having to transfer their land or transform themselves into large-scale farming entities (; ). Therefore, socialized agricultural service development is regarded as an important pathway to organically integrate smallholders into modern agriculture. Although the market for socialized agricultural services has rapidly expanded recently, the extent of adoption significantly differ among farmers; the key factors underlying these differences are yet to be fully identified. Clarifying these factors is of great significance to facilitate better integration of smallholders into modern agriculture based on division of labor and effectively transform their service needs into actual adoption behaviors.

The rapid development of digital technologies is reshaping rural production, daily life, rural governance, and patterns of social interaction (; ; ). Digital tools such as smartphones, the mobile Internet, digital finance, e-commerce platforms, short-video applications, and online government service platforms have gradually become embedded in rural society, offering farmers novel approaches to obtaining market information, obtain financial services, compare service providers, connect with agricultural business organizations, and participate in rural governance. However, the dividends of digital technology do not automatically translate into improvements in farmers’ production and operational decisions; the key lies in whether farmers are able to effectively access, understand, access, and utilize digital information (). Digital literacy (DL), a crucial capability that enables farmers to engage in production and managerial decision-making in the digital era, may shape the process through which digital resources are translated into actual farming practices, thereby affecting socialized agricultural service adoption. Against this backdrop, our research examined whether digital literacy empirically promotes farmers’ socialized agricultural service adoption.

Existing studies have mainly examined the determinants of farmers’ socialized agricultural service adoption from the following viewpoints: household resource endowments, farm size, labor allocation, risk perception, social networks, dependence on agricultural income, and village-level service supply conditions. argue that the shrinking size of household labor has become a key factor in driving smallholders’ utilization of socialized agricultural services. Surveying 1,174 smallholders in Jiangsu Province, China. A sample survey of farmers in Ecuador show that income functions as a pivotal factor in impacting agricultural socialized service adoption (). According to investigation data from 787 farm households in Jiangxi, Fujian, and Zhejiang, China, risk perception dramatically inhibits farmers’ socialized agricultural service adoption (). According to survey information from China’s 638 farm households, reveal that farm size exerts a nonlinear impact on socialized agricultural service adoption; an expansion in farm size significantly promotes large-scale farmers’ actual purchase behavior but suppresses that of smallholders. In addition, the study finds that household income exerts a remarkably positive effect upon adopting socialized agricultural services; if the household burden is heavier and the degree of land fragmentation is greater, farmers will trend less to accept such services. Moreover, the presence of local providers of socialized agricultural services can significantly increase farmers’ adoption behaviors.

A growing number of studies have begun to focus on the role of the digital economy and digital technologies in farmers’ decision-making in agricultural production and management, as well as in agricultural sustainable transformation. examine how the digital economy affects Chinese farmers’ adoption of eco-agricultural technologies along dimensions such as digital sales, digital finance, and digital production. Other studies further explore the impacts of digital technologies on farmers’ credit access, labor mobility, and participation in supply-chain integration (; ; ).

Compared with research on the adoption of specific digital technologies—which mainly emphasizes whether farmers use particular tools such as the Internet, smartphones, digital finance platforms, or e-commerce platforms—digital literacy (DL) places greater emphasis on farmers’ ability to understand, use, and transform digital information and digital tools. Therefore, digital literacy not only affects whether farmers come into contact with digital technologies, but also determines whether they can convert digital resources into actual capabilities for agricultural production and operational decision-making. Accordingly, in recent years, an increasing body of literature has directly investigated the importance of digital literacy in fields such as agricultural production, rural entrepreneurship, inclusive finance, and farmers’ market participation. construed survey information from 643 farm households in Shaanxi and Shandong, China, suggesting that enhancements in DL dramatically facilitated farmers’ adoption of green production technology, including water-saving irrigation, pest and disease control, use of contamination-free pesticides, and the return of straw. Analyzing 742 survey questionnaires from Shandong province, find that digital literacy dramatically increases farmers’ adoption probability for integrated pest management, conservation tillage, soil testing, and formula fertilization technologies. draw a similar conclusion from 923 valid household samples of the China Land Economic Survey. show that digital literacy helps rural entrepreneurs expand their businesses and connect with markets, thereby promoting rural entrepreneurship. According to micro-survey information from China’s five national e-commerce demonstration counties, Internet use significantly increases farmers’ probability of partaking in e-commerce entrepreneurship (Song et al., 2024). Using survey data from 360 farm households in Nigeria, Nwangwu et al. (2024) show that digital technology dramatically reinforces farmers’ market participation decisions and intensity of participation.

However, existing studies have mainly examined the effects of the digital economy, digital technologies, or digital literacy on ecological agricultural technology adoption, rural entrepreneurship, and market participation, while relatively little attention has been paid to integrating digital literacy and the adoption of agricultural socialized services into a unified analytical framework. Agricultural socialized services provide an important pathway for smallholders to participate in the modern agricultural division of labor and connect with the modern agricultural system. Therefore, examining the effect of digital literacy on farmers’ adoption of agricultural socialized services can help extend the micro-level empirical evidence on digitally enabled agricultural modernization. Few studies have incorporated digital literacy and socialized agricultural services into a unified analysis framework, aimed at directly examining the influence of digital literacy upon farmers’ adoption of socialized agricultural services. Just a small amount of research provides preliminary evidence on this issue (; ; ). Nevertheless, such research relies on relatively simple measures of digital literacy and have not sufficiently uncovered the potential mechanisms through which DL affects farmers’ acceptation of socialized agricultural services. Our study explores the influence of DL on farmers’ socialized agricultural service adoption and interprets its potential mechanisms. The purpose is to deal with this problem. We used large-scale household information from China’s Thousand Villages Survey (CTVS), implemented by Shanghai University of Finance and Economics.

Our research has four key findings: For starters, DL can dramatically raise the likelihood of farmers’ acceptation of socialized agricultural services. Second, digital literacy promotes farmers’ socialized agricultural service adoption mainly through three channels (broadening information acquisition, alleviating financing constraints, and driving the transition of agricultural production and management). Third, the extent of dependence on agricultural operating income and the marketization level exert apparent positive moderating effects on digital literacy’s role in driving socialized agricultural service adoption, whereas the digital governance level in villages exerts a remarkably negative moderating effect. Fourth, the driving force of DL is stronger among households with male heads, heads over the age of 50, and heads with junior high school education or below.

The following three aspects of our study reflect its potential marginal contributions: First, it combines DL with the analysis framework of farmers’ socialized agricultural service adoption, thereby extending associated studies according to digital literacy. Second, this research systematically examines the mechanisms via which DL affects the acceptation of socialized agricultural services from three perspectives: broadening information acquisition channels, easing financing constraints, and facilitating the transition of agricultural production and management modes, thereby deepening our understanding of the internal theoretical logic underlying the relationship between the two. Third, by combining a moderating effect analysis and heterogeneity analysis, our research identifies situational conditions and group differences in the impact of DL upon farmers’ socialized agricultural service adoption, compensates for existing studies’ insufficiency in examining contextual conditions and heterogeneity characteristics, and provides empirical proof for formulating differentiated digital capability enhancement policies and boosting the advancement of high-quality socialized agricultural services.

The rest of this article is structured as below: Section 2 describes the theoretical analysis and assumptions, along with the theoretical mechanisms via which DL impacts farmers’ adoption of socialized agricultural services. Section 3 elaborates on the information sources, variables, and econometric models. Section 4 exhibits the results of the benchmark regression, mechanism analysis, robustness tests, moderating effect analysis, and heterogeneity analysis. Section 5 discusses and interprets the empirical results. Section 6 concludes the paper and provides policy suggestions.

2 Theoretical analysis and assumption development

2.1 Digital literacy’s impact upon socialized agricultural service adoption

For farmers, deciding whether to adopt socialized agricultural services is essentially the result of a cost–benefit trade-off under multiple constraints, including labor, capital, technology, risk, and transaction costs (). However, some farmers have long relied on family labor and traditional production experience, and often have insufficient knowledge of specialized external services, limited trust in such services, and concerns about uncertain service outcomes and uncontrollable transaction processes. These factors inhibit their willingness to adopt socialized agricultural services.

Digital literacy helps alleviate cognitive, trust, and decision-making constraints, thereby encouraging farmers to adopt socialized agricultural services. First, digital literacy reduces cognitive constraints. Farmers showing higher digital literacy levels usually have better learning capacity and stronger capacity to accept novel technologies (), making it easier to understand the effect of socialized agricultural services in saving labor input, ameliorating operational efficiency, reducing production costs, and enhancing business performance. This, in turn, improves their awareness and understanding of such services. Second, digital literacy alleviates trust constraints. Farmers with superior DL can better understand service contracts, operational standards, and service procedures, evaluate feedback, and are more likely to accept platform-based transactions and digital supervision methods, thereby reducing their distrust of external specialized services (). Finally, digital literacy eases decision-making constraints. Socialized agricultural service adoption involves multiple aspects including service selection, fee payment, quality assessment, and expected returns. Farmers showing superior DL can better compare different production options, accurately weigh cost–benefit relationships between self-production and service outsourcing, and reduce perceived uncertainty in the adoption process (). Therefore, digital literacy makes farmers content to accept socialized agricultural services, while raising the likelihood of adoption by improving their cognitive level, degree of trust, and decision-making ability. Our analysis puts forward the following assumption:

A1: DL significantly increases farmers’ socialized agricultural service adoption.

2.2 Mechanism analysis of digital literacy’s impact upon socialized agricultural service adoption

2.2.1 Broadening information acquisition channels

Farmers’ decisions to accept socialized agricultural services depend heavily on the extent to which they have access to relevant service information (). In accordance with transaction cost and information search theories, incomplete and asymmetric information increases farmers’ search, comparison, and monitoring costs in the service adoption process. When timely information about service providers, service prices, operational quality, service reputation, and policy subsidies is not available, farmers feel uncertain about service effectiveness and transaction security, which reduces their willingness to adopt such services (). In traditional rural societies, farmers mainly obtain information about agricultural services through acquaintances, neighborhood communications, or notifications from village cadres. Such information sources are relatively limited, which easily leads to mismatches between service supply and demand and insufficient adoption.

DL can effectively broaden farmers’ information channels. Farmers showing superior DL levels can use digital tools and platforms excellently, such as smartphones, agricultural information platforms, WeChat groups, short-video platforms, agricultural service mini-programs, and government service apps, and obtain timely data relevant to socialized agricultural services (). Through multichannel information comparison, farmers can accurately assess service providers’ qualifications, reasonableness of service prices, reliability of service quality, and availability of subsidies, thereby reducing uncertainty in service selection. Digital literacy also allows farmers to evaluate information, helps them identify false advertising and low-quality information, improves the accuracy of their judgments, and reduces information-related risks in adoption decisions. The foregoing analysis leads to the following assumption:

A2: Digital literacy strongly motivates farmers to adopt socialized agricultural services by broadening their information acquisition channels.

2.2.2 Alleviating financing constraints

Socialized agricultural service adoption usually requires farmers to pay service fees. While farmers facing tight financial conditions may recognize that agricultural socialized services can enhance production efficiency, decrease labor intensity, and enhance business performance, they may be unable to make timely purchases because of short-term liquidity problems. Therefore, financing constraints and insufficient payment capacity are important factors influencing farmers’ decisions to adopt socialized agricultural services ().

In rural financial markets, farmers generally face problems such as insufficient collateral, lack of credit information, long distances to financial service outl