Can Agricultural Credit Promote Farmers’ Green Production Behaviors? Evidence from China

Agricultural green production is vital for sustainable agricultural development and rural revitalization. As a market-oriented financial tool, this study examines the role of agricultural credit in promoting green production behaviors among farmers (FGPB). Using survey data from 537 farmers in Sichuan, Shanxi, and Guizhou provinces, the OLS model is applied to assess the impact of agricultural credit on FGPB. The study employs a 2SLS model to address endogeneity and conducts robustness checks with Tobit and Probit models, alternative dependent variables, and regional fixed effects. The findings reveal that (1) agricultural credit significantly boosts FGPB, increasing it by 5.39%, while reducing the use of fertilizers, pesticides, and plastic films by 0.2338, 0.1751, and 0.2387 levels, respectively. (2) The effect is more pronounced among small-scale farmers, those with higher happiness levels, and those with more farming experience. (3) Agricultural credit also promotes FGPB by encouraging the adoption of green inputs, waste recycling, and the expansion of agricultural socialized service (ASS). (4) Financial accessibility, farmers’ financial literacy, and their abilities of information acquisition can influence their participation in credit transactions. This study provides empirical evidence on the role of agricultural credit in driving FGPB, enriching the literature on financial instruments for green agricultural development, and offers policy recommendations for promoting green transformation through agricultural credit.