Knowing and Doing: The Perception of Subsidy Policy and Farmland Transfer

Abstract

Farmland transfer is conducive to the rational allocation of farmland resources and scaling of agricultural production in China. The Chinese government launched a pilot program to subsidize moderate-scale farmland management in 2016, yet the perception of the program and its effects are rarely empirically tested using micro-level data. Using data on 523 households extracted from a rural household survey, the Probit and Tobit model results determined a significant positive impact of the perception of moderate-scale subsidies on both farmland transfer behavior and farmland transfer area. If the household knows about the moderate-scale subsidy policy, then it is 19.2% more likely to have moderate-scale land endowment, and the household has 17.626 ha more inflow land than that who do not know the policy. The results show that only 5% of the households know the moderate-scale subsidy policy, thus hindering the process of farmland transfer. Additionally, high levels of educational attainment and non-agricultural income promote farmers’ decisions to transfer farmland and to expand farmland areas for moderate-scale households. However, age, household size, the family dependency ratio, and non-agricultural labor are obstacles to farmland transfer. The findings imply that the government should adopt a more effective policy transmission mechanism to increase the proportion of knowing the subsidy policy for both small-scale and moderate-scale households.

The Impact of Family Capital on Farmers’ Participation in Farmland Transfer: Evidence from Rural China

“…The differences in family economic situations will also affect the households' choices in terms of production mode and scale. The transfer of rural labor force members to non-agricultural activities regulates the family income structure, and richer households' dependence on traditional agricultural production is reduced, thus increasing the possibility of land transfer [65]. With the continuous development of new agriculture in China, the traditional small-scale farming mode has been unable to meet current agricultural production needs, and the positive role of agricultural mechanization is becoming more significant [66].…”

“…Government subsidies mainly refer to various subsidies issued by the government, including rural subsistence allowances and subsidies for agriculture, forestation, 'Five Guarantees' 1 families, and extremely poor households. Against a background of vigorously promoting the Rural Revitalization Strategy, various subsidies issued by the government for rural areas have played a specific role in ensuring farmers' basic livelihoods and encouraging enthusiasm for agricultural production [65,73,74], which is conducive to promoting the development of rural land transfer and agricultural moderate-scale operations as a whole. Social security mainly includes medical insurance and endowment insurance.…”

“…The reason is that the current benefits of rural endowment insurance are limited, and only provide weak security for farmers; those receiving such benefits, which are far lower than the income obtained from farming, would find it very difficult to meet their basic living needs. Therefore, it cannot replace the security function of land [65,91]. Meanwhile, eligibility for rural endowment insurance further strengthens the rural household registration effect and the farmers' recognition of their identity.…”

“…Good social relations can enhance the trust of both parties, thus reducing the transaction costs of land transfer [67], so there are certain requirements for family social relations. In addition, a good social network can also improve farmers' efficiency in obtaining information and increase their ability to obtain funds [65], thus providing effective support for farmers to transfer into land and expand production. The social relationship network of peasant households can be best reflected by the human relationship expenditure and social status of peasant households, which are used to maintain and broaden the social relationship network.…”

Farmer Heterogeneity and Land Transfer Decisions Based on the Dual Perspectives of Economic Endowment and Land Endowment

“…Theoretically, a farmer's resource endowment significantly impacts the farmer's transfer decision, and the transfer decision of different resource endowments is also disparate. In terms of studies on heterogeneous peasant households in land transfer, previous scholars usually differentiated peasant households according to part-time employment, working experience, income level, social security, and geographic feature and discussed the different transfer decisions of heterogeneous peasant households [15][16][17]. However, in addition to the above dimensions, the natural geographical conditions of land itself are also important factors that cannot be ignored in decision making regarding peasant household transfer [18,19].…”