How can restricted farmland development rights be compensated to stimulate farmland protection? A provincial exploration in China

Abstract

Stimulating farmland protection (FP) is crucial to ensure food security and environmental well-being. Some countries, including China, are seeking to incorporate transferable development rights (TDR) to realize economic incentives for FP. This study developed an indicator – planning regulation intensity on farmland (PRIF) – to describe the restricted farmland development rights (FDRs) and designed a compensation-oriented farmland transferable development rights (FTDR) mechanism. The threshold model and two-way fixed effect model were employed to unlock the transfer direction, quantity, and economic value of FDRs. Taking Hubei Province in China as the study area; the empirical research was conducted and demonstrated the necessity and feasibility of implementing the compensation-oriented FTDR mechanism in China. This study addresses the issue of unfair distribution of FDRs due to planning regulations and provides a promising economic-incentive policy instrument for curbing farmland loss. The FTDR mechanism considering PRIF that we propose enables the extension of TDR to countries that implement authority-exerted planning regulations.