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Why do farmers quit from grain production in China? Causes and implications

Author

Listed:
  • Jin‐Tao Zhan
  • Yan‐Rui Wu
  • Xiao‐Hui Zhang
  • Zhang‐Yue Zhou

Abstract

Purpose - The number of farms engaged in grain production in China has been declining in recent years. Limited efforts have been devoted to examine why producers quit from grain production and how such exits affect China's grain output. Such information, however, is invaluable in understanding whether the exit from grain production should be encouraged and if so, how. The purpose of this paper is to identify the factors that influence farmers' decision to quit from grain production, with a view to drawing implications for devising policies to deal with such exits. Design/methodology/approach - Both descriptive statistics and econometric techniques are used to analyse a set of unique and comprehensive farm‐level survey data to identify key factors that affect farmers' decision to quit from grain production. Findings - Key factors that influence a farm to quit from, or stay in, grain production include: family size, the share of farming labour out of total family labour, per capita arable land, the proportion of land used for grain production, the share of family income from grains. It was also found that the level of grain prices and the sunk cost in farming, chiefly in grain production, also affect the likelihood that a household will stay or exit from grain production. Further, farmers in more economically developed regions are more likely to quit from grain production. Originality/value - The paper's findings clearly indicate that farms with a larger scale of grain production and earning higher income from grain are the major contributors to China's grain production. Potential exists for China to raise its total grain output if the land from those exiting farmers is readily made available to larger producers, enabling them to further benefit from the economies of scale.

Suggested Citation

  • Jin‐Tao Zhan & Yan‐Rui Wu & Xiao‐Hui Zhang & Zhang‐Yue Zhou, 2012. "Why do farmers quit from grain production in China? Causes and implications," China Agricultural Economic Review, Emerald Group Publishing Limited, vol. 4(3), pages 342-362, August.
  • Handle: RePEc:eme:caerpp:v:4:y:2012:i:3:p:342-362
    DOI: 10.1108/17561371211263365
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    Cited by:

    1. Jiangsheng Chen & Gideon Bolt & Yiwen Wang & Xiaoli Feng & Xuke Li, 2021. "An Empirical Diagnosis of the School-to-Work Process for Rural and Agricultural Development in China," Sustainability, MDPI, vol. 13(2), pages 1-15, January.
    2. Chen Cao & Xueyun Chen, 2021. "Can Industrial Integration Improve the Sustainability of Grain Security?," Sustainability, MDPI, vol. 13(24), pages 1-17, December.
    3. Ling Ma & Xiaoyun Liu & Xian Xin, 2013. "Do Poor Rural Households Produce Less Grain than Non-poor Rural Households," China & World Economy, Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 21(6), pages 22-36, November.
    4. Ming Guan, 2016. "Income diversification of Chinese rural households after they rent out land," Cogent Business & Management, Taylor & Francis Journals, vol. 3(1), pages 1265803-126, December.

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