How tenure security and farmland transfer affected farmland investment: Evidence from apple growers in China
Abstract
Tenure insecurity and thin land rental markets weakened the incentives to farmland investment in rural China, which was not conducive to improving agricultural productivity. Thus, impacts of tenure security and farmland transfer on farmland investment were analyzed by using the household fixed effect model, the IV method and a 762 household-level and 1163 plot-level data set. The results indicated that: (1) compared with owned plots, the number of farmyard manure in rented plots without stipulating rental time was significantly decreased by 64.0~66.9%; (2) each 1% increase in land rents led to a 1.7% rise in the input of farmyard manure; (3) each 1% increase in the size of farmland transfer resulted in a 0.1% rise in the input of farmyard manure. Our study contributed to boosting agricultural sustainable development from the perspectives of improving the systems of farmland property rights and developing farmland rental markets.
First published online 09 June 2022
Keyword : farmyard manure, rented plots, rental time, land certificates, farmland rental markets, land rents
How to Cite
Li, X., & Huo, X. (2022). How tenure security and farmland transfer affected farmland investment: Evidence from apple growers in China. Technological and Economic Development of Economy, 28(5), 1267–1286. https://doi.org/10.3846/tede.2022.17006
This work is licensed under a Creative Commons Attribution 4.0 International License.
References
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Masten, S. E., & Crocker, K. J. (1985). Efficient adaptation in long-term contracts: Take-or-pay provisions for natural gas. The American Economic Review, 75(5), 1083–1093. http://www.jstor.org/stable/1818647
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Nie, H. (2017). Contract theory: Original, development and divergence. Comparative Economic & Social Systems, 1, 1–13.
Qiu, H., Liu, L., Li, D., & Zhang, C. (2017). Farm size, tenure security and land productivity: An empirical study based on plot-level survey data from four provinces in China. Chinese Rural Economy, 6, 30–43.
Saint-Macary, C., Keil, A., Zeller, M., Heidhues, F., & Dung, P. T. M. (2010). Land titling policy and soil conservation in the northern uplands of Vietnam. Land Use Policy, 27(2), 617–627. https://doi.org/10.1016/j.landusepol.2009.08.004
Tian, C., & Li, F. (2013). Land adjustment and land rental market: Based on the dual perspectives of both quantity and quality. Economic Research Journal, 2, 110–121.
Wu, Y., Xi, X., Tang, X., Luo, D., Gu, B., Lam, S. K., Vitousek, P. M., & Chen, D. (2018). Policy distortions, farm size and the overuse of agricultural chemicals in China. Proceedings of the National Academy of Sciences, 115(27), 7010–7015. https://doi.org/10.1073/pnas.1806645115
Zhang, J., Zhu, P., & Nan, G. (2019). Farmland transfer patterns and household long-term agricultural investment behavior based on surveys of four counties in Jiangsu Province. Journal of Nanjing Agricultural University, 19(3), 96–104.
Besley, T. (1995). Property rights and investment incentives: Theory and evidence from Ghana. Journal of Political Economy, 103(5), 903–937. https://doi.org/10.1086/262008
Burke, W. J., Frossard, E., Kabwe, S., & Jayne, T. S. (2019). Understanding fertilizer adoption and effectiveness on maize in Zambia. Food Policy, 86, 101721. https://doi.org/10.1016/j.foodpol.2019.05.004
Cao, H., Zhu, X., Heijman, W., & Zhao, K. (2020a). The impact of land transfer and farmers’ knowledge of farmland protection policy on pro-environmental agricultural practices: The case of straw return to fields in Ningxia, China. Journal of Cleaner Production, 277, 123701. https://doi.org/10.1016/j.jclepro.2020.123701
Cao, Y., Bai, Y., & Zhang, L. (2020b). The impact of farmland property rights security on the farmland investment in rural China. Land Use Policy, 97, 104736. https://doi.org/10.1016/j.landusepol.2020.104736
Carter, M., & Yao, Y. (2004). Industrialization, land lease markets and agricultural investment. China Economic Quarterly, 3, 983–1002.
Cheng, W., Xu, Y., Zhou, N., He, Z., & Zhang, L. (2019). How did land titling affect China’s rural land rental market? Size, composition and efficiency. Land Use Policy, 82, 609–619. https://doi.org/10.1016/j.landusepol.2018.12.037
Fan, M., Shen, J., Yuan, L., Jiang, R., Chen, X., Davies, W. J., & Zhang, F. (2012). Improving crop productivity and resource use efficiency to ensure food security and environmental quality in China. Journal of Experimental Botany, 63(1), 13–24. https://doi.org/10.1093/jxb/err248
Feng, S. (2008). Land rental, off-farm employment and technical efficiency of farm households in Jiangxi Province, China. NJAS-Wageningen Journal of Life Sciences, 55(4), 363–378. https://doi.org/10.1016/S1573-5214(08)80026-7
Gao, L., Sun, D., & Ma, C. (2019). The impact of farmland transfers on agricultural investment in China: A perspective of transaction cost economics. China & World Economy, 27(1), 93–109. https://doi.org/10.1111/cwe.12269
Hart, O. (2009). Hold-up, asset ownership, and reference points. The Quarterly Journal of Economics, 124(1), 267–300. https://doi.org/10.1162/qjec.2009.124.1.267
Hart, O., & Moore, J. (2008). Contracts as reference points. The Quarterly Journal of Economics, 123(1), 1–48. https://doi.org/10.1162/qjec.2008.123.1.1
Hong, W., Luo, B., & Hu, X. (2020). Land titling, land reallocation experience, and investment incentives: Evidence from rural China. Land Use Policy, 90, 104271. https://doi.org/10.1016/j.landusepol.2019.104271
Jacoby, H. G., & Mansuri, G. (2008). Land tenancy and non-contractible investment in rural Pakistan. The Review of Economic Studies, 75(3), 763–788. https://doi.org/10.1111/j.1467-937X.2008.00481.x
Jia, L., & Lu, Q. (2018). Can land transfer promotes the implementation of soil and water conservation measures in the loess plateau? An analysis based on mediation effect of collective action and moderation effect of government compensation. Chinese Rural Economy, 6, 38–54.
Kousar, R., & Abdulai, A. (2016). Off-farm work, land tenancy contracts and investment in soil conservation measures in rural Pakistan. Australian Journal of Agricultural and Resource Economics, 60(2), 307–325. https://doi.org/10.1111/1467-8489.12125
Leight, J. (2016). Reallocating wealth? Insecure property rights and agricultural investment in rural China. China Economic Review, 40, 207–227. https://doi.org/10.1016/j.chieco.2016.07.014
Li, X., & Huo, X. (2021). Impacts of land market policies on formal credit accessibility and agricultural net income: Evidence from China’s apple growers. Technological Forecasting & Social Change, 173, 121132. https://doi.org/10.1016/j.techfore.2021.121132
Li, X., Huo, X., Liu, J., & Zhang, H. (2019). Impact of farmland transfer and stability of rental contracts in apple production areas on apple growers’ behaviors for improvement of land quality. Transactions of the Chinese Society of Agricultural Engineering, 35(15), 275–283.
Li, X., Liu, J., & Huo, X. (2021). Impacts of tenure security and market-oriented allocation of farmland on agricultural productivity: Evidence from China’s apple growers. Land Use Policy, 102, 105233. https://doi.org/10.1016/j.landusepol.2020.105233
Luo, B. (2019). The property rights from delimitation to implementation: The logical clue of Chinese farmland management system transformation. Issues in Agricultural Economy, 1, 17–31.
Lyu, K., Chen, K., & Zhang, H. (2019). Relationship between land tenure and soil quality: Evidence from China’s soil fertility analysis. Land Use Policy, 80, 345–361. https://doi.org/10.1016/j.landusepol.2018.09.002
Ma, X., Heerink, N., Van Ierland, E., Van Den Berg, M., & Shi, X. (2013). Land tenure security and land investments in Northwest China. China Agricultural Economic Review, 5(2), 281–307. https://doi.org/10.1108/17561371311331133
Masten, S. E., & Crocker, K. J. (1985). Efficient adaptation in long-term contracts: Take-or-pay provisions for natural gas. The American Economic Review, 75(5), 1083–1093. http://www.jstor.org/stable/1818647
Muraoka, R., Jin, S., & Jayne, T. S. (2018). Land access, land rental and food security: Evidence from Kenya. Land Use Policy, 70, 611–622. https://doi.org/10.1016/j.landusepol.2017.10.045
Nie, H. (2017). Contract theory: Original, development and divergence. Comparative Economic & Social Systems, 1, 1–13.
Qiu, H., Liu, L., Li, D., & Zhang, C. (2017). Farm size, tenure security and land productivity: An empirical study based on plot-level survey data from four provinces in China. Chinese Rural Economy, 6, 30–43.
Saint-Macary, C., Keil, A., Zeller, M., Heidhues, F., & Dung, P. T. M. (2010). Land titling policy and soil conservation in the northern uplands of Vietnam. Land Use Policy, 27(2), 617–627. https://doi.org/10.1016/j.landusepol.2009.08.004
Tian, C., & Li, F. (2013). Land adjustment and land rental market: Based on the dual perspectives of both quantity and quality. Economic Research Journal, 2, 110–121.
Wu, Y., Xi, X., Tang, X., Luo, D., Gu, B., Lam, S. K., Vitousek, P. M., & Chen, D. (2018). Policy distortions, farm size and the overuse of agricultural chemicals in China. Proceedings of the National Academy of Sciences, 115(27), 7010–7015. https://doi.org/10.1073/pnas.1806645115
Zhang, J., Zhu, P., & Nan, G. (2019). Farmland transfer patterns and household long-term agricultural investment behavior based on surveys of four counties in Jiangsu Province. Journal of Nanjing Agricultural University, 19(3), 96–104.