Efficiency performance of fertilizer use in arable agricultural production in China

Purpose: Fertilizer overuse is regarded as one of the main contributors to agricultural pollution and environmental problems in China. The purpose of this paper is to evaluate technical efficiency (TE) and fertilizer overuse index (FOI) with respect to China’s arable agricultural production and examine regional variations in terms of fertilizer overuse. Design/methodology/approach: The maximum likelihood random effects–time varying inefficiency effects model was applied to estimate TE, fertilizer use efficiency (FUE) and FOI. Findings: Over the study period (2011–2015), TE steadily increased for each individual province. Overall, mean annual TE was 0.811, implying that, on average, Chinese provinces could increase output by 18.9 per cent given unchanged levels of inputs and technology. Mean annual FOI ranged from 0.008 to 3.139, with a mean of 0.685, suggesting that there is fertilizer overuse in almost all provinces, and that large regional variation exists. Coastal provinces were found to have the highest TE scores, while the central region showed the highest degree of fertilizer overuse. Originality/value: The results indicate that fertilizer use has had a significant positive impact on production in the China’s arable agricultural sector. High TE was not necessarily associated with low FUE.