In the process of industrialization, relocation of manufacturing industries from urban to rural areas may have important implications for the rural environment and agricultural production. As a demonstration, the aim of this paper is to estimate the impact of wastewater from industrial firms on agricultural yields in rice farming of Jiangsu province, China. Using 2011-2015 panel data from both the China Rural Fixed Point Survey and the China Environmental Statistics Database between 2011 and 2015, we find that industrial wastewater significantly reduces rice yields. The econometric strategy implemented allows us to assume that this result reflects a causal and detrimental biological effect of wastewater on the growing process of the rice. These results highlight the need to better understand the conflicts between industry and agriculture at the local level in a context of rapid industrialization.