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Farmland Leasing, misallocation Reduction, and agricultural total factor Productivity: Insights from rice production in China

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  • Zhang, Xiaoheng
  • Hu, Lingxiao
  • Yu, Xiaohua

Abstract

Reducing factor misallocation is crucial for enhancing agricultural aggregate total factor productivity (TFP) and narrowing the income gap between urban and rural areas in China. This paper presents a theoretical framework illustrating how farmland leasing affects aggregated TFP via the reduction of misallocation. Utilizing a comprehensive dataset of cost and benefit survey for Jiangsu rice farmers, monthly surface climatological data, and soil characteristic information from FAO, this study finds that efficient factor reallocation could theoretically result in a 23.6% increase in aggregate TFP. In practice, a 1% increase in farmland leasing leads to a 1.087% gain in aggregate TFP and a 0.267% reduction in misallocation using IV regression. These effects become larger after the Three Rights Separation (TRS) reform compared to prior conditions. The mediation effects of farmland leasing on TFP through misallocation reduction are only observed in Southern Jiangsu, possibly due to farmland concentration.

Suggested Citation

  • Zhang, Xiaoheng & Hu, Lingxiao & Yu, Xiaohua, 2023. "Farmland Leasing, misallocation Reduction, and agricultural total factor Productivity: Insights from rice production in China," Food Policy, Elsevier, vol. 119(C).
    • Handle: RePEc:eee:jfpoli:v:119:y:2023:i:c:s0306919223001161
    DOI: 10.1016/j.foodpol.2023.102518
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    References listed on IDEAS

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    Citations

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    Cited by:

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    3. Hu, Yuanhong & Liu, Jing & Zhang, Shuyu & Liu, Yuxin & Xu, Haixin & Liu, Pengling, 2024. "New mechanisms for increasing agricultural total factor productivity: Analysis of the regional effects of the digital economy," Economic Analysis and Policy, Elsevier, vol. 83(C), pages 766-785.
    4. Lei Zhang & Lili Xu & Mingzi Gao & Mingdong Zhou, 2024. "Can Agricultural Credit Promote the Green Transformation of China’s Agriculture?," Sustainability, MDPI, vol. 16(24), pages 1-14, December.
    5. Meng Meng & Leng Yu & Xiaohua Yu, 2024. "Machinery structure, machinery subsidies, and agricultural productivity: Evidence from China," Agricultural Economics, International Association of Agricultural Economists, vol. 55(2), pages 223-246, March.
    6. Meng, Meng & Zhang, Wuke & Zhu, Xi & Shi, Qinghua, 2024. "Agricultural mechanization and rural worker mobility: Evidence from the Agricultural Machinery Purchase Subsidies programme in China," Economic Modelling, Elsevier, vol. 139(C).
    7. Linfang Chen & Huanyu Sun & Shenghui Zhou & Shixing Jiao & Xiao Zhao & Jianmei Cheng, 2024. "Analysis of Resource Misallocation and Total Factor Productivity Losses in Green Agriculture: A Case Study of the North China Region," Sustainability, MDPI, vol. 17(1), pages 1-25, December.
    8. Daisong Yu & Xiao Hai & Zixuan Wang & Haipeng Chen, 2024. "Abatement Effects of Agricultural Non-Point Pollution from Land System Reforms: A Case Study of the Farmland “Three Rights Separation” Reform in China," Agriculture, MDPI, vol. 14(6), pages 1-19, June.

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