Why Chinese farmers are reluctant to transfer their land in the context of non-agricultural employment: insights from agricultural mechanization

Using a panel dataset of 24,527 farming households from the China Family Panel Studies (CFPS) for the years 2014–2020, this study employed the fixed-effects, mediation-effect, and two-stage least squares (2SLS) models to explore why in the context of non-agricultural employment Chinese farmers are reluctant to lease out their land from an agricultural mechanization perspective. The analysis yielded several significant findings. First, participation in non-agricultural employment significantly increases the likelihood of farmers leasing out their land. Second, remittances do not significantly impact the increase in agricultural machinery procurement investments but increase expenditures on agricultural machinery leasing. Third, both pathways of agricultural mechanization—self-purchased machinery and machinery leasing—significantly inhibit farmers from leasing out land, indicating a negative mediating effect of agricultural mechanization on the impact of non-agricultural employment on land leasing. Fourth, a complementary rather than a substitutive effect exists between self-purchased and leased agricultural machinery. Collectively, the findings suggest that the government should increase agricultural machinery subsidies to advance the process of agricultural mechanization in China, which plays a crucial compensatory role in the loss of rural labor. Furthermore, improving the wages, benefits, and employment stability of migrant workers is significantly conducive to promoting and stabilizing land transfers.