The impact of land renting-in on farm productivity: evidence from maize production in China

Abstract

PurposeThis study investigates the effect of renting in land on farm productivity, and the impacts of rented-in land size and transaction partner type on farm productivity.Design/methodology/approachData from the 2015 China Household Finance Survey are analyzed using an extended regression model and the two-stage least squares method.FindingsFarm households that rent in land are likely to achieve higher farm productivity, and ignoring endogeneity underestimates the positive effect of land renting-in. Further evidence indicates that rented-in land size has an insignificant impact on farm productivity, and that there is no difference in farm productivity between lessees renting-in land from acquaintances and those renting-in land from non-acquaintances. These results may be caused by the higher degree of marketization of land rentals between acquaintances in China. With increasing competition in agricultural factor markets, in theory, rented-in land size should not affect farm productivity.Practical implicationsOverall, the analysis suggests that renting in land improves farm productivity, which supports the land transfer policies that have been rolled out in recent decades in China. However, our finding that rented land size does not affect farm productivity, consistent with the results in the literature, implies that the Chinese government should no longer subsidize or prefer large farms with low productivity. More attention should be paid to small lessees and market-oriented land rentals between acquaintances. Promoting the marketization of land transfers inside acquaintance networks could realize the potential of the land market, especially if land transfers decrease.Originality/valueThis study identifies the effects of renting in land, rented-in land size and type of rental transaction partner on farm productivity using nationally representative data. The findings imply that the government should pay more attention to the marketization of land rentals between acquaintances. Although existing studies regard land rental between acquaintances as informal and of low efficiency, the recent evidence shows that China's land markets are changing, and policy makers should adjust their policies accordingly.

The impact of climate change on maize production: Empirical findings and implications for sustainable agricultural development

“…Regarding input factors, the contribution rates of material, land, and labor input to maize output are 53.71%, 46.33%, and −3.47%, respectively. These results further illustrate the roles of land and material input in maize output, which is in line with previous literature (Sheng et al, 2019;Qiu et al, 2021). Regarding climate factors, the contribution rates of temperature, precipitation, and sunshine hours to maize output are 2.20%, 0.58%, and −0.51%, respectively, indicating that these variables have limited contributions to maize output.…”

Unobservable land value in rural China and its microeconomic implication on land lease behavior

“…, 2015). Informal Kinship land transfer is still the main component of land transactions, which may distort the market mechanism in the Chinese land market (Qiu et al. , 2020a).…”

“…In addition, the Chinese rural land market is hardly a complete market (Ma et al, 2015). Informal Kinship land transfer is still the main component of land transactions, which may distort the market mechanism in the Chinese land market (Qiu et al, 2020a). To wrap it up, the above two reason makes us believe that provincial productivity difference is not likely to explain the variation in rent price.…”

E-commerce Adoption and Technical Efficiency of Wheat Production in China

“…The related literature has identified a broad range of factors that potentially influence the technical efficiency and productivity of agricultural production. These factors include government R&D spending on agricultural research [7,9,19], agricultural extension services and technical training [20,21], institutional and market reform [22][23][24], land tenure security and the functioning of land rental [6,25,26], agricultural cooperatives [16,20,21,27], the reduction of input costs due to the improvement of markets and/or bargaining power [28,29], and off-farm employment and migration [28][29][30]. A growing number of recent studies focus on the role of Information and Communication Technologies (ICTs) in agricultural production and technical efficiency.…”