Can China’s Transferable Development Rights Programme (The Link Policy) Increase Farmers’ Income? Evidence from the Land Coupon Programme in Chongqing

Rapid urbanisation and industrialisation have accelerated urban expansion which leads to the great loss of farmland. Aiming to preserve farmland for food security while also alleviating the contradiction of the shortage of land for urban development, the Chinese version of Transferable Development Rights programme termed the Link Policy was proposed. It calls for the land consolidation and rural resettlement in rural areas to create land quotas, which can be traded for urban to urban developers while the total amount of farmland keeps unchanged. The commercialisation of land quotas from rural areas has significantly increased local land revenue and thus the Link Policy has been popularized nationwide. However, as one of the crucial stakeholders, whether farmers can benefit from the policy implementation is urgent needed for investigation. Given that, this study takes the typical practice of the Link Policy in Chongqing as the case study to examine the impacts of the Link Policy on farmers’ income. Synthetic Control Method (SCM) was applied to evaluate the policy impacts with the analysis of panel data of 49 municipal regions in 4 provinces and Chongqing from 2000 to 2017. The result shows that the Land Coupon Programme in Chongqing has significantly increased farmers’ household income at the early stage of the policy implementation while the impact is not significant afterwards. Policy recommendations are provided including refining the Land Coupon Programme by establishing an effective risk assessment system and reclaimed land security system, Moreover, a fair land quota revenue distribution system is also needed to increase farmers’ income in the long run.