Summary:
Clearly defined land property with complete rights has always been a necessary condition for agricultural and rural development and the effective allocation of resources. China's reform and opening up began with the rural land tenure reform. The implementation of household contract responsibility not only increased farmers' enthusiasm for agricultural production but also laid a solid foundation for subsequent reform while improving agricultural production efficiency. The unique design of the land tenure system has contributed greatly to China's rapid economic growth and structural transformation. Rural land is owned by collectives and the contracted management rights belong to farmers, and the Chinese government has adopted a series of reforms to stabilize farmers' land property rights in recent years, such as extending the contracting term, which ensures fairness and prompts incentives. These reforms have improved agricultural production efficiency and aided in stable macroeconomic development. The land tenure system and household behaviors are the core issues of development economics, and the literature includes studies on farmers' investment and land transfer. As the largest developing country in the world, China's unique land tenure design and major reforms in recent years and the large-scale transfer of agricultural labor to non-agricultural sectors provide valuable opportunities to study land tenure and agricultural production. As a landmark event in China's rural land tenure reform, the promulgation of the Law of the People's Republic of China on Land Contract in Rural Areas gives farmers long-term and guaranteed land use rights and the right to legally transfer their land. This law effectively improves the stability of farmers' land property rights and promotes the effective allocation of land resources through active rural land transfer markets. Accordingly, this paper takes the implementation of the Law of the People's Republic of China on Land Contract in Rural Areas at the provincial level as a policy shock and uses a difference-in-differences method to study the impacts of stable land property rights on household agricultural production and its' mechanisms. This research is mainly based on the National Fixed Point household dataset of the Ministry of Agriculture and Rural Affairs from 1995 to 2013. This dataset, which contains detailed agricultural input-output information, is the largest tracking sample survey in rural China. The quality of the data has been widely recognized. This paper first examines the impact of the policy shock on farmers' land transfer behaviors and agricultural total factor productivity. Next, this paper discusses the sources of agricultural efficiency improvement from the perspective of the direct incentive effects of stabilizing property rights and the reallocation of land resources. Finally, this paper discusses the heterogeneous effects of the policy shock with regard to population mobility, geographical endowments and transportation infrastructure. The research conclusions of this paper are as follows. First, stable land property rights can greatly reduce uncertainty about the future, protect the legitimate rights and interests of market participants, and activate the land transfer market and improve agricultural efficiency. Second, the implementation of the Law of the People's Republic of China on Land Contract in Rural Areas mainly promotes land out rather than land in, and the efficiency improvement comes from direct incentive effects and the improvement of resource allocation efficiency. Stable land property rights can promote effective land transfer and optimize farmers' agricultural production and labor allocation decisions. Finally, stable land property rights can effectively alleviate the loss of agricultural production efficiency caused by population outflow and congenital disadvantages, and can improve the overall income level of rural households. This paper shows that clear property rights and reasonable expectation management are necessary conditions for market-oriented resource allocation. We contribute to the literature in several ways. First, this paper verifies the direct property right incentive effect brought by the reform of stable land property right tenure arrangements. Even if farmers do not transfer land, they can directly improve agricultural productivity under the incentives of stable land property rights. Second, this paper indicates that the policy stabilization of land rights and legalization of transfer rights can effectively optimize farmers' labor and land resource allocation, and can increase farmers' welfare. Third, this paper discusses the heterogeneous impacts of land reform in combination with population mobility, regional endowments and transportation infrastructure, which are crucial to transitional China.
徐尚昆, 王璐, 杨汝岱. 地权稳定与农业生产[J]. 金融研究, 2022, 504(6): 133-152.
XU Shangkun, WANG Lu, YANG Rudai. Stable Land Property Rights and Agricultural Production. Journal of Financial Research, 2022, 504(6): 133-152.
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