While the Asian food economy has been experiencing significant transitions, it is widely believed that little transformation has occurred in farm land operation. However, the recent rapid emergence of middle and large‐size farms in many regions of China is striking, as is the increase in size of operational units. The overall goal of this article is to understand small‐scale farm transformation in China based on a unique dataset surveyed in Northeast and North China. The results show that the institutional innovation through establishing land transfer service centers to promote land rental markets and reduce transaction costs, policy support to speed up land consolidation, and farm mechanization services are major driving forces in the recent evolution of China's farm operations. The article concludes with policy implications on small‐scale farming transformation in China and the rest of world and identifies research issues for further study.
The relationship between farm size and productivity has long been a topic of debate in development economics. Using farm‐level panel data from 2003 to 2013, we investigate the relationship between maize yield and farm size in Northern China. After controlling for farm‐specific characteristics, we restore a mild U‐shaped relationship between maize yield and cropping area from the apparent inverse U‐shaped curve. This suggests that an inverse farm size–productivity relationship persists for most small‐sized farms. Further analyses demonstrate that farmer input choice between labor and capital is likely to smooth the non‐linear farm size–productivity relationship, with capital use being more likely to affect the farm size–productivity relationship at a larger scale. The findings imply that subsidizing farmers to rent land without helping them become better‐equipped could result in resource misallocation towards larger farms using less‐efficient labor‐intensive technologies.
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