Promoting smallholder farmers’ participation in value-added practices in the grain value chain: the role of rural e-commerce development

Purpose Smallholder farmers’ functions and roles in the grain value chain directly determine their position in benefit distribution. This study analyzes rural e-commerce development’s role in smallholder farmers’ participation in value-added practices in the grain value chain and its mechanism of action. Design/methodology/approach This study established a motivation-opportunity-ability framework for smallholder farmers’ decisions to participate in value-added practices in the grain value chain, introducing rural e-commerce into this framework. The study empirically analyzed 2017 China Rural Household Panel Survey data using probit and ordered probit models, employing the two-stage residual inclusion approach to address potential endogeneity problems. Findings After controlling for endogeneity, farmers in e-commerce villages were found to be 0.6% (28.6% of the sample mean) more likely to engage in value-added practices than farmers in non-e-commerce villages. The partial and full participation probabilities were 0.2 and 0.4% (29.4 and 28.0% of the sample mean) higher, respectively. The study conclusions passed several robustness tests. Mechanistic analysis revealed that rural e-commerce motivates farmers’ participation in value-added practices, increases participation opportunities and improves their participation ability, promoting smallholder participation in value-added practices. Originality/value This study combines theoretical models with empirical testing to examine rural e-commerce’s role in promoting value-added practices among smallholder farmers participating in the grain value chain. This study further verifies a significant correlation between rural e-commerce development and village-level factors, revising existing studies’ conclusions. In addition to providing policy insights for China, this study serves as a useful reference worldwide for improving smallholder farmers’ welfare.