Abstract: Digital literacy serves as both a foundational capacity enabling tea farmers to adapt to the digital transformation of the tea industry and a new driver of household income growth. The realization of such income gains is closely tied to farmers’ choices of market linkage methods. Using on micro-survey data from 1107 tea farmers collected by the National Tea Industry Technical System, this study constructed a digital literacy index and employed Poisson regression, ordinary least squares, instrumental variable regression and interaction term regressions to examine the impact of digital literacy on farmers’ choices of market linkage methods. Then it analyzed the income effect associated with tea farmers’ choices of these different methods. The study further explored the heterogeneity of these effects and the moderating role of participation depth in the processing stage. The findings reveal that: (1) digital literacy significantly influenced tea farmers’ market linkage method strategies. (2) The income effects of digital literacy varied across different types of market linkage methods, indicating heterogeneous returns to channel selection. (3) The effects of digital literacy on tea farmers’ market linkage strategies and income generation exhibit heterogeneity across dimensions such as vocational training, degree of marketization, and level of digital economy development. (4) Deeper engagement in the processing stage positively moderated the income-enhancing impact of digital literacy, particularly when farmers connect to markets through cooperatives or self-operated retail. The findings suggest that, in the context of the digital economy driving the development of new productive forces in agriculture, regionally differentiated and tiered digital literacy cultivation initiatives should be implemented. Efforts should also be made to guide tea farmers in optimizing their market linkage strategies, and foster a diversified and collaborative market ecosystem, thereby unlocking the multiplier potential of digital literacy in enhancing farmers’ incomes.

Key words: tea farmers, digital literacy, market linkage method, agricultural product processing