Impacts of land market policies on formal credit accessibility and agricultural net income: Evidence from China's apple growers

Abstract

Ambiguous and uncertain structure of farmland property rights resulting from imperfect land market policies restricted the growth of agricultural net income in China. Thus, impacts of land market policies on formal credit accessibility and agricultural net income were analyzed in this paper. The data set from 1467 China's apple growers was used, and the results indicated that: (i) owing to damage the signal transmission function of farm size, administrative allocation reduced significantly formal credit accessibility at the 10% level; (ii) farmland registration and confirmation increased significantly output at the 1% level, and agricultural net income was significantly improved at the 10% level. Further, farmland registration and confirmation was conducive to enhancing the development of farmland rental markets and improving the expectation of tenure security, which boosted significantly agricultural net income. According to our findings, we suggest that central and local governments should continue to deepen market-oriented reforms and decrease unnecessary administrative intervention to develop the rural factors markets such as farmland rental markets and formal credit markets.