Farmland Rental Participation, Agricultural Productivity, and Household Income: Evidence from Rural China

Abstract

The rural land rental market is playing an increasingly important role in the agricultural transformation period for developing countries, including China, where rural farmland rental is highly context-specific with the implementation of the collective-owned rural land system; thus, in turn, the access to farmland rental markets for rural households has profoundly influenced their livelihood strategies and income earnings. This paper investigates the income impact differences caused by rural households’ farmland rental participation activities and explores such impact mechanisms by further evaluating the income impacts caused by rental area and household agricultural productivity. Data from the Chinese national household survey were used for estimating the empirical models. Our results show that farmland renting has positively affected households’ on-farm and total income, but there is no significant effect upon off-farm income. According to income differences across quantiles, we find households with high on-farm income are more sensitive about enlarging their farm size by renting farmland, and households with middle and upper-middle off-income may benefit more from renting out their farmland. Furthermore, the joint effects of renting area and household agricultural productivity on lessee households’ farm income is significantly positive. For lessor households, our results indicate that renting out farmland did not improve their off-farm and total income as it may have a limited effect on farm household labor distribution. Our findings suggest that engaging in farmland rental activity can enhance farming productivity efficiency and poverty alleviation among rural households. Under the collective-owned rural land system, it is urgent and necessary to initiate and design incentive policies to encourage highly efficient large farms to expand the farm size and provide smallholders with equal opportunities to engage in farmland rental activities.

Farmer Heterogeneity and Land Transfer Decisions Based on the Dual Perspectives of Economic Endowment and Land Endowment

“…As the supplier of the land transfer market, whether farmers transfer their land depends on their judgment of the expected value of land. On the one hand, with the gradual increase in labor costs, the expected income of farmers in agricultural operation activities is low, which leads to the increasingly prominent problem of land abandonment in rural areas [18,24]. On the other hand, as the proportion of nonagricultural employment increases, a large number of young and middle-aged rural workers migrate to cities, increasing the opportunity cost of traditional smallholder productions.…”

The impact of farmland transfer participation on farmers' livelihood choices – an empirical study of the effectiveness of the 2014 Three Property Rights Separation reform

“…Over the past few decades, several rural land reforms have brought about changes in the farmland transfer market-from the prohibition to the legalization of farmland transfer among farmers (Han et al, 2021). Since the 2000s, a number of measures have been implemented to facilitate farmland transfer in response to the fast urbanization-induced increase in demand for large-scale farming and rural labor migration (You et al, 2019).…”

“…Over the past few decades, several rural land reforms have brought about changes in the farmland transfer market-from the prohibition to the legalization of farmland transfer among farmers (Han et al. , 2021).…”

More Income, Less Pollution? How Income Expectation Affects Pesticide Application

“…Pesticide reduction is influenced by the characteristics of agricultural business [20]. More moderate-scale agriculture operations [21], more embedded cooperative organizations [22], more service of scale operations, and a better division of labor transactions [23] can effectively contribute to pesticide reduction. The third perspective focuses on the external institutional environment.…”

“…The third perspective focuses on the external institutional environment. Agricultural pesticide reduction has a positive economic externality [23], which calls for government intervention to encourage farmers to reduce pesticide use. Government intervention mainly includes policy advocacy, project support [24], government subsidies, a system of proper rewards and punishments [25], institutional trust [26], social capital [27], and social norms [28].…”