["Journal of Agrarian Change, EarlyView. ", "\nABSTRACT\nThis study engages with debates on the implications of agricultural mechanization on smallholder farming. It examines the transformation of the agricultural machinery service (AMS) system in a grain‐production region in China, focusing on its response to the rapid expansion of large‐scale producers and the accelerated machinery renewal. It argues that the interplay between the scaling up of agricultural production, state intervention and capital influx has shifted the AMS market from an informal structure to one characterized by capitalization and specialization. This transformation has directly and indirectly compelled smallholders to withdraw from agricultural production. This study further demonstrates that the ‘simple reproduction squeeze’ faced by smallholders may not solely be a result of rising production costs but also stems from the dismantling of the support systems that previously sustained the reproduction of smallholder farming.\n"]