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Power of Agricultural Credit in Farmland Abandonment: Evidence from Rural China

Author

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  • Jiang Du

    (School of Economics, Sichuan University, Chengdu 610065, China
    Sichuan Provincial Key Lab. of Sci-tech Finance and Mathematical Finance, Chengdu 610065, China
    These authors contributed equally to this work and should be regarded as co-first authors.)

  • Miao Zeng

    (School of Economics, Sichuan University, Chengdu 610065, China
    These authors contributed equally to this work and should be regarded as co-first authors.)

  • Zhengjuan Xie

    (School of Economics, Sichuan University, Chengdu 610065, China)

  • Shikun Wang

    (School of Economics, Sichuan University, Chengdu 610065, China)

Abstract

Labor, land, and funds are keys to revitalizing rural areas around the world. Previous studies have focused on the impacts of funds on agricultural production, but placed little emphasis on its role in agricultural land-use transformation. Thus, this study explores the quantitative relationship between agricultural credit and farmland abandonment from the perspective of rural revitalization. Using data on 8031 households from 27 provinces obtained from China’s Labor Force Dynamics Survey (CLDS), this study uses a Tobit model to examine the quantitative impacts of informal and formal agricultural credit on farmland abandonment. The results indicate that: (1) Access to agricultural credit helps to reduce farmland abandonment. (2) Compared with formal agricultural credit (provided by institutions), informal agricultural credit (provided by family and friends) is more significant in reducing farmland abandonment. Thus, this study enhances our understanding of the relationship between agricultural credit and farmland use. It will also prompt policymakers to improve rural financial markets in order to reduce the misallocation of farmland resources, thereby improving food security and rural economies.

Suggested Citation

  • Jiang Du & Miao Zeng & Zhengjuan Xie & Shikun Wang, 2019. "Power of Agricultural Credit in Farmland Abandonment: Evidence from Rural China," Land, MDPI, vol. 8(12), pages 1-14, December.
    • Handle: RePEc:gam:jlands:v:8:y:2019:i:12:p:184-:d:294075
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