Since China’s reform and opening-up, farmland fragmentation and labor shortages driven by urbanization have hindered agricultural efficiency. Small-scale farms account for about 70% of total holdings. In response, the government has promoted the development of a mechanization service market, resulting in a structure where large- and small-scale contractors coexist. In this market, the efficiency of large contractors is widely emphasized, while debates persist over the viability of small contractors. Moreover, small farmers find it difficult to access large-scale services, creating structural mismatches between supply and demand. Against this backdrop, village-level collective cooperatives have emerged to consolidate farmland and share machinery, potentially providing mechanization services and coordinating transactions with external contractors. However, their competitive advantage and position within the market remain unclear. This study addresses these issues by (1) analyzing the functions of village-level collective cooperatives in the mechanization service market through case studies and (2) comparing the cost structures of different contractor types to reassess the future market configurations. To conduct this analysis, primary data was collected through fieldwork in Anyang County, Henan Province. The analysis shows that large contractors primarily serve large farms, while small contractors, including village-level collective cooperatives, supplement residual demand. Village-level collective cooperatives also play a role in land consolidation and the reuse of abandoned land, contributing to local land-use adjustments. A cost analysis shows that large contractors enjoy cost advantages for large farms, whereas for small farms, village-level collective cooperatives and other small contractors maintain a certain level of competitiveness. Overall, large contractors are expected to expand their market share, while village-level collective cooperatives will likely evolve into intermediary organizations that coordinate efficient outsourcing between large contractors and small-scale farms.
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