Purpose The purpose of this paper is to analyze the relationship between farm size and agricultural production efficiency from the aspects of output and profit in order to find an optimal farm size that achieves both output and profit efficiency in agricultural production in China. Design/methodology/approach This study uses the 2012 China Family Panel Studies survey data and employs the stochastic frontier analysis (SFA) models to investigate empirically the relationship between farm size and agricultural production efficiency. Findings The study finds that there is an inverted-U curve relationship between farm size and output efficiency and a U-shaped curve relationship between farm size and profit efficiency in agricultural production in China. Based on the empirical results, the study estimates that the appropriate farm size is around 10–40 mu and the optimal farm size is around 20–40 mu both in terms of output efficiency and profit efficiency in Chinese agricultural production under the current agricultural technology and land management system. Practical implications The findings of this study suggest that appropriate land consolidation will bring more benefits to farmer households and agricultural production efficiency. There are some policy implications. First, governments should give long term and more stable land using rights to farmers through extending the period of land contract and verifying land using rights. Second, governments should encourage transfers of land using rights and promote land consolidation. But the implementation of this policy should consider regional differences and not be used for blindly pursuing increasing land size. Third, land consolidation should be accompanied with the development of specialized agricultural services. Originality/value The paper makes two major contributions to the literature. First, the authors use the SFA model to investigate the relationship between land size and agricultural production efficiency. Second, the authors establish two SFA models – the stochastic frontier output analysis model and the stochastic frontier profit analysis model – to estimate the optimal land size to achieve both output and profit efficiency of agricultural production in China.
The urban and rural dual structure is a defining characteristic of the social and economic development process in China. With rapid urbanization, remarkable development of agriculture and rural modernization, the relationship between urban and rural areas is undergoing significant changes in China. Using macro data, we find that the relationship between urban and rural areas started to change in 2010. The transition has mainly been reflected in three dimensions: agriculture, rural areas and farmers. First, agricultural versatility has gradually increased, and the number of participants in leisure agriculture and rural tourism has grown rapidly since 2010. Second, the rural employment rate has risen gradually, and the share of rural employees in the tertiary sector has grown markedly. Third, the urban–rural income ratio and consumption ratio have begun to decrease, and the levels of consumption of domestic tourism by urban and rural residents are becoming small.
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