Effect of agricultural subsidies on the use of chemical fertilizer.

Agricultural subsidies lead to changes in the use of chemical fertilizer by farmers. Using data from a household survey conducted annually by the Rural Economy Research Center of the Ministry of Agriculture of China from 2014 to 2018, Control Function (CF) approach and Heteroskedasticity-based identification strategy were employed to analyze the impact of agricultural subsidies on chemical fertilizer use by rice farmers. After addressing the problem of endogeneity, we found that agricultural subsidies have a significantly negative impact on the use of chemical fertilizer.