The theory of induced technological change emphasizes the guiding effect of relative price changes of factors on technological progress. In view of the fact that agricultural machinery service outsourcing has become the basic direction of grain production mechanization in big countries with small farmers. Therefore，the relative price of mechanical service and labor will play an important role in inducing the skewed technological progress in the process of replacing labor with machinery. This paper calculated the technological progress bias index of grain production in 26 provinces from 2004 to 2018 by using the method of trans-log stochastic frontier analysis. Research findings are as follows： 1） the direct induction effect of relative price of purchasing agricultural machinery and labor on the mechanical technological progress is not significant，while the relative price of agricultural machinery service and labor had an obvious induced effect； 2） the superposition effect of agricultural machinery service outsourcing production on inducing technological progress bias is an important mechanism to promote the organic connection between small farmers and modern agriculture. This paper argues that the policy of agricultural machinery subsidy should be tilted towards the main body of agricultural machinery service and the price formation mechanism of agricultural machinery service market should be gradually improved. In addition， exploring the difference between the substitution of agricultural machinery for labor and the substitution of agricultural machinery service for labor based on the analysis framework of induced technological change can provide feasible operation for the policy design of agricultural technological progress in China.