Spatiotemporal changes in Chinese land circulation between 2003 and 2013

Abstract

Land circulation is an important measure that can be utilized to enable agricultural management at a moderate scale. It is therefore imperative to explore spatiotemporal changes in land circulation and the factors that drive these variations in order to maintain and increase the vitality of the land rental market. An initial analysis of spatiotemporal patterns in land circulation is presented in this study on the basis of data from 169,511 farm households between 2003 and 2013. The rural fixed observation point system advocated by the Chinese Ministry of Agriculture was utilized for this analysis, and Heckman two-stage models were developed and estimated in order to identify the drivers of regional differences in land circulation at the national scale and at the levels of different terrains. The results of this study show that the rate of land circulation in China rose from 15.09% to 25.1% over the course of the study period, an average rate of 0.8%. More specifically, data show that the rate of land circulation in the south of China has been higher than in the north, that the average land rental payment was 4256.13 yuan per ha, and that 55.05% of households did not pay such a fee during the land circulation process. In contrast, the average rent obtained was 3648.45 yuan per ha nationally even though 52.63% of households did not obtain any payments from their tenants. The results show that land quality, geographic location, transaction costs, and household characteristics have significantly affected land circulation in different regions of China. Specifically, the marginal effects of land quality and geographic location were larger in the plain regions, while transaction cost was the key factor influencing land circulation in the hilly and mountainous regions. The signal identified in this study, rent-free land circulation, is indicative of a mismatch that has led to the marginalization of mountainous regions and higher transaction costs that have reduced the potential value of land resources. Thus, as the opportunity cost of farming continues to rise across China, the depreciation of land assets will become irreversible and the phenomenon of land abandonment will become increasingly prevalent in hilly and mountainous regions in the future. The transaction costs associated with the land rental market should be reduced to mitigate these effects by establishing land circulation intermediaries at the township level, and the critical issues of land abandonment and poverty reduction in hilly and mountainous regions should arouse more attention.