Impacts of Agricultural Capitalization on Regional Paddy Field Change: A Production-Factor Substitution Perspective

Paddy fields are significant in ensuring food security and improving the agricultural ecological environment. In economic terms, paddy field use is affected by input costs and crop market price. There is insufficient understanding of factor input costs caused by agricultural production-factor substitution, driving paddy field change. This study uses a panel regression model to analyze the influence of agricultural production-factor substitution on paddy field use from 1990 to 2016. The case area is Hubei province, China. The results show that the overall growth trend in paddy fields is unequivocal in China's grain production areas. The improvement in agricultural production conditions, including irrigation and land quality, has a positive effect on the area proportion of paddy fields. With socioeconomic developments, the relationship between the substitution of nitrogen fertilizer for farmland and the area proportion of paddy field is inverted-U shaped, while the effect of the substitution of machinery for labor is U-shaped. The main conclusion is that the process of agricultural production-factor substitution, intended to maximize labor and land productivity, will increase the area proportion of paddy field. Public policies should focus on improving the level of agricultural mechanization and crop diversity to protect food security and sustainable agricultural intensification.