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Farmers' Exit from Land Operation in Rural China: Does the Price of Agricultural Mechanization Services Matter?

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  • Tongwei Qiu
  • S. T. Boris Choy
  • Yifei Li
  • Biliang Luo
  • Jing Li

Abstract

This study uses data covering 3,914 farm households, collected from Henan province in China, to investigate the links between the price of agricultural mechanization services and farmers' exit from land operation. The results indicate that the increasing price of agricultural mechanization services leads to farmers leaving land operation, especially when the high sunk costs and the long‐term breakeven period of self‐owned machinery are considered. This effect is intensified by the rapid rural–urban migration in China. Further analysis reveals that the surge in service prices reduced land renting‐in and encouraged non‐grain production. Our analysis suggests that the agricultural mechanization service market in China tends to work against the survival of smallholder farmers. However, the price of agricultural mechanization services is conducive to eliminating less‐productive farmers and cultivating new agricultural operators.

Suggested Citation

  • Tongwei Qiu & S. T. Boris Choy & Yifei Li & Biliang Luo & Jing Li, 2021. "Farmers' Exit from Land Operation in Rural China: Does the Price of Agricultural Mechanization Services Matter?," China & World Economy, Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 29(2), pages 99-122, March.
    • Handle: RePEc:bla:chinae:v:29:y:2021:i:2:p:99-122
    DOI: 10.1111/cwe.12372
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    References listed on IDEAS

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    3. Qian, Long & Lu, Hua & Gao, Qiang & Lu, Hualiang, 2022. "Household-owned farm machinery vs. outsourced machinery services: The impact of agricultural mechanization on the land leasing behavior of relatively large-scale farmers in China," Land Use Policy, Elsevier, vol. 115(C).
    4. Jiafeng Gu, 2024. "Neighborhood Does Matter: Farmers’ Local Social Interactions and Land Rental Behaviors in China," Land, MDPI, vol. 13(1), pages 1-17, January.
    5. Xu, Mingjun & Chen, Changling & Ahmed, Memon Aftab, 2024. "Market-oriented farmland transfer and outsourced machinery services: Evidence from China," Economic Analysis and Policy, Elsevier, vol. 81(C), pages 1214-1226.
    6. Qiu, Tongwei & Shi, Xinjie & He, Qinying & Luo, Biliang, 2021. "The paradox of developing agricultural mechanization services in China: Supporting or kicking out smallholder farmers?," China Economic Review, Elsevier, vol. 69(C).
    7. Ziming Bai & Tianyi Wang & Jiabin Xu & Cuixia Li, 2023. "Can Agricultural Productive Services Inhibit Carbon Emissions? Evidence from China," Land, MDPI, vol. 12(7), pages 1-20, June.

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