Why the Uncertain Term Occurs in the Farmland Lease Market: Evidence from Rural China

Abstract

Urbanization and aging of the agricultural population lead to the insufficient supply of agricultural labor and land being idle in rural China, calling for the farmland lease market to maintain sustainable and efficient use of farmland. However, rural households tend to agree on an uncertain term for farmland leasing in/out, which leads to low efficiency and land loss in agriculture. Therefore, using the survey data collected from 2704 rural households and a logistic regression model, we examine the effects of risk faced by the rural households on the likelihood of the uncertain term for farmland leasing. Results reveal that a large share of labor with low education and high income increase the likelihood of an uncertain term for farmland leasing out activities, while a high disaster frequency, a high education of household and a high share of agricultural income increase the probability of an uncertain term for farmland leasing in activities. Additionally, leasing farmland to/from relatives or neighbors, informal contracts, low rent and the lack of pension insurance also increase the likelihood of the uncertain term for farmland leasing out/in activities. Findings suggest that more attention should be paid to education, agricultural insurance and social security system in rural areas.

The Case for Long-Term Land Leasing: A Review of the Empirical Literature

“…Tax incentives and subsidies aimed at stimulating the leasing of farmland have been identified as an efficient mechanism to make land leasing more attractive to landowners who do not wish to farm the land themselves. A study by [78] has shown that farm subsidies have a positive and significant effect on both farmland leasing-in and leasing-out choices. The study indicated that rural households receiving grain subsidies are more likely to lease out (1.5 per cent) and lease in farmland (3.2 per cent).…”

Labor Structure, Land Fragmentation, and Land-Use Efficiency from the Perspective of Mediation Effect: Based on a Survey of Garlic Growers in Lanling, China

“…Labor and land input significantly affect the total agricultural output [10]. Appropriate employment of labor and the intensive planting of land can improve agricultural economic benefits [12], while the insufficient labor supply and land loss caused by idle land have a serious negative impact on agricultural economic benefits [13].…”