Effect of agricultural factor marketization on agricultural non-point source pollution: the regulatory role of environmental regulation

This study aims to explore possible ways to mitigate agricultural non-point source pollution from the perspective of source management and market-oriented reforms in agriculture. Based on China’s provincial-level (excluding Hong Kong, Macao, Taiwan, and Xizang) panel data from 2004 to 2020, a dynamic panel model was constructed, and based on the theory of externality, the differential generalized matrix estimation method was applied to explore the impact effect and transmission mechanism of agricultural factor marketization on non-point source pollution, to further analyze whether there is a moderating role of environmental regulation in the transmission mechanism. Analysis of the impact effects showed the following: 1) The marketization of agricultural factors presented an inverted “U”-shaped dynamic evolution characteristic of non-point source pollution, which initially increased and subsequently decreased. 2) The analysis of the mechanism showed that the marketization of agricultural factors indirectly affected the non-point source pollution through its effects on planting structure, chemical inputs, and the scale of operation. In particular, the effect of marketization of agricultural factors on “non-food rate” and fertilizer input intensity was in an inverted “U” shape, and the effect of the per capita scale of operation exhibited no significant effect on the early stage of marketization but demonstrated a significantly positive effect on the later stage of marketization. 3) The environmental regulation had a significant negative moderating effect on the transmission mechanism of “non-food rate” and fertilizer input intensity and did not exhibit a moderating effect on the transmission relationship between scale of operation and non-point source pollution. Therefore, this study recommends further leveraging the impact of market-oriented reform within the long-term mechanism of agricultural non-point source pollution management. This process is based on the path-dependence of the “scale effect” “structural effect”, and “input effect” of agricultural non-point source pollution management, as well as the role of market-oriented reform within the long-term mechanism of managing agricultural non-point source pollution, based on the path-dependence of the “scale effect” “structural effect” and “input effect”. Based on these parameters, this study appears to further play the role of market-oriented reform on the long-term mechanism of agricultural non-point source pollution management and build a dual-track operation mechanism of “government-market” to improve agro-ecological environment and ensure sustainable agricultural development.