Accumulation of production capital and income growth of Chinese farmers in the post-poverty alleviation era: A study based on a two-way fixed effects model with CFPS data

Agricultural mechanization is a crucial indicator of modernization in agriculture. It improves productivity and underpins the evolution of a modern state. This study scrutinizes the enduring effects of government subsidies on farm machinery acquisition, income growth, and capital accumulation in rural households. It is based on policies about targeted poverty alleviation and rural revitalization. Research findings indicate that government subsidies have significantly increased the per capita net income of rural households. However, in the post-poverty alleviation era, for households that already possess agricultural machinery, the benefits brought by government subsidies in the early stages of the policy cycle tend to diminish over time. From 2016 to 2020, government subsidies continued to enhance the value of agricultural machinery in rural households. Their impact on ownership rates first slightly declined and then increased again. The promotional effect in 2020 was not significantly better than in 2016. When China is fighting against poverty, it is essential to encourage rural households to use their income and government subsidies to accumulate production capital. A long-term mechanism has been established to protect the achievements of poverty alleviation, promote agricultural mechanization and rural modernization, and support rural revitalization.