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Rental rates of grain land for consolidated plots and their determinants in present-day China

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  • Xin, Liangjie
  • Li, Xiubin

Abstract

To promote its agricultural competitiveness, China must expand the scale of farming. Due to the country’s distinct land system, renting land is the main way to expand the scale of farming in China; however, a national supervision system of land rental rates has not been established. This study aims to investigate how much land rental rates are, how they vary regionally, and what factors impact them. The amount of rented farmland in China has increased steadily in recent years. In 2016, 35.1 percent of the national total farmland was recorded as being rented out, and land rental rates have been rapidly increasing. In the fourth quarter of 2017, rental prices for irrigated land and rain-fed land were 1763 and 1370 US dollars (Base year = 2014; 1 USD = 6.5 RMB), respectively. For farmers of large farms, rent has become the largest cost related to agricultural production. Rates in the main agricultural production regions and the regions around developed cities are significantly higher than those in other regions. Land quality, land area, land tenure, road access, grain prices and subsidies are important in explaining grain land rental rates. Unexpectedly, the rental prices for larger consolidated plots are lower than those for smaller consolidated plots, and a scarcity of funds may be the main cause of this pattern. We suggest that to actively promote agricultural scale management, China’s government should continue to improve agricultural infrastructure such as irrigation conditions and roads, secure land tenure, and stop intervening in market prices and subsidizing larger farms.

Suggested Citation

  • Xin, Liangjie & Li, Xiubin, 2019. "Rental rates of grain land for consolidated plots and their determinants in present-day China," Land Use Policy, Elsevier, vol. 86(C), pages 421-426.
    • Handle: RePEc:eee:lauspo:v:86:y:2019:i:c:p:421-426
    DOI: 10.1016/j.landusepol.2019.05.037
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