Since May 2015, the central government has reformed the “Three Agricultural Subsidies” into “Agricultural Support and Protection Subsidies”. This reform prioritizes support for appropriate scale operations, encouraging Chinese agriculture to transition from fragmented small-scale farming toward appropriate scale operations. This shift may lead to the reallocation of agricultural production factors, the improvement of agricultural technological efficiency, and the advancement in agricultural technology, agricultural labor quality, and agricultural production specialization. Ultimately, it aims to drive China’s agricultural transformation toward green and high-quality development driven by green total factor productivity (GTFP).

Using city-level data from 289 cities from 2012 to 2019, this paper employs methodologies such as the DID model and instrumental variable model to investigate the impact of agricultural subsidy reform on agricultural GTFP. The results show that: (1) The reform promotes the growth of agricultural GTFP in regions with agricultural scale operations. (2) The intrinsic mechanisms through which the reform enhances agricultural GTFP are advancement in agricultural technology, agricultural labor quality, and agricultural production specialization (3) The positive effect on agricultural green technical efficiency is more pronounced in areas with scale operations; it is also stronger in areas with a higher proportion of primary industry output value, major grain-producing areas, and areas with higher urbanization rates.

In the long run, facilitating farmland transfer and promoting appropriate scale operations are crucial directions for achieving sustainable, green, and high-quality development of Chinese agriculture. Therefore, it is essential to continue advancing and refining the agricultural subsidy reform, especially strengthen subsidies for new agricultural business entities engaged in scale operations, and fully unlock the potential for improving agricultural GTFP, so as to explore a viable path for the green and high-quality development of Chinese agriculture.