Unravelling the effects of straw return on rice production in central China: Evidence for future policy‐making

Abstract The practice of straw return represents an effective and sustainable approach to recycling and reusing agricultural residues, thereby significantly contributing to the circular economy within the agri‐food sector. Although this practice holds significant promise for enhancing soil quality and mitigating pollution resulting from straw burning, the realization of these substantial benefits depends on the extent to which farmers are willing to embrace this practice, a decision closely tied to the anticipated economic benefits it offers. The present study aimed to explore the effect of straw return on rice production in terms of rice yield and net return using a representative household survey of 1752 rice farmers in central China. The results showed that there exist threshold effects of the years of straw return on both rice yield and net income, which decline as years of straw return increase below the thresholds, and then increase linearly above the thresholds. Overall, after implementing the straw return practice, it took an average of about 3.5 years to observe a positive effect on rice yields and about 7.5 years to see an increase in net income. The estimates were robust to threshold regression, Lasso regression and random forest regression methods. Nonetheless, the provision of essential technical guidance to farmers via agricultural cooperatives could contribute to expediting the realization of the benefits associated with implementing straw return practices. The results imply that the current incentive mechanism aimed at diffusing straw return practice should be fine‐tuned by considering the time required for straw return to generate economic benefits in specific contexts, ensuring better compensation for initial losses. Interventions that shorten the time needed to realize these benefits, such as providing additional technical training for farmers, should be implemented. Furthermore, the uncertainty regarding the time frame for benefit realization should be communicated clearly and effectively to farmers.