Land transfer and food crop planting decisions in China

ABSTRACT

This paper proposes a theoretical model to illustrate the relationship between the scale of land transfer-in and farmers’ crop selection behaviour. We use a semiparametric instrumental variable regression model to test this relationship. Data come from a face-to-face interview survey of 2,677 farmers located in nine provinces of China collected in 2014–2015. Results show that the size of land transfer-in has a U-shaped impact on the probability of planting food crops. To guarantee food crop self-sufficiency, the Chinese government should encourage land transfer, foster the mobility of agricultural labourers, and enhance the capacity of the rural financial market.

KEYWORDS:

• Semiparametric model
• land transfer-in
• food crop planting
• China

JEL CLASSIFICATION:

• Q15

Disclosure statement

No potential conflict of interest was reported by the authors.

Notes

¹ The data come from the National Bureau of Statistics of China.

² If the farmer is transferring out then $\mathrm{\Delta }\mathrm{S}$ would be negative.

³ The double-track pricing system in the food crops market is a policy implemented by the Chinese government in 1985. The food crops grown by farmers is first purchased by the government to ensure the basic supply of food. Farmers are allowed to sell the remaining amount of food not purchased by the government in the free market. So there are two prices for the food crops: one price for the government and the other for the free market. Actually, we can take the gap between these two prices as a tax on food induced by the government purchase of food on a priority basis.

Additional information

Funding

This paper was supported by the Key Program of the National Natural Science Foundation of China (71333004, 71742003) and the National Social Science Foundation of China (19ZDA115). Paudel’s time on this paper was supported by USDA Hatch Project #94382.