Agricultural production services and their influence on rural common prosperity: evidence from eastern China

Common prosperity has emerged as a central focus in the global sustainable development agenda. Raising the total income of farmers and narrowing the income equality in rural areas are important ways to achieve common prosperity. This study utilized 368 micro-survey data of rural households in Jiangsu Province, China in 2016, to examine how agricultural production services (APS) promote common prosperity in eastern China through two mechanisms: narrowing the urban-rural income gap and reducing income inequality in rural areas. The results indicate that APS significantly increases per capita total income of rural households, thereby contributing to the narrowing of the urban-rural income gap by raising rural incomes. Moreover, APS has significantly reduced income inequality within rural areas. Notably, the positive effects of APS on agricultural net income are more pronounced for large-scale farmers, while for small-scale farmers, the services contribute substantially to increases in wage and business income. These findings suggest that it could generate larger common prosperity effect by tailoring the APS framework to overcome the distinctive constraints of small-scale farmers in order to compress intra-rural income inequality and rural-urban income inequality.