How does land tenure reform impact upon pastoral livestock production? An empirical study for Inner Mongolia, China

How has land tenure reform affected livestock production in pastoral areas of China?This question is explored by estimating what impact assigning grassland use rights has on livestock production based on county-level data for Inner Mongolia between 1985 and 2008. The timing of the introduction of the household-based assignment of grassland use rights differed between counties, enabling a comparison of the effects of the land tenure reform. The changes in livestock production over time are examined by analysing data on changes in livestock population and meat output. The descriptive analysis shows that livestock production increased at a higher speed in the crop farming areas, but that the development of livestock productivity was faster in the pastoral areas. In the empirical analysis, we employed a fixed effects model to disentangle the effects of land tenure reform on livestock production from factors related to market forces, grassland condition, technological development and environmental heterogeneity. The model results reveal that the implementation of land tenure reform had significant and negative effects on the increase in livestock production, although total livestock production actually increased. It therefore appears that land reform is in itself unable to offset the impact of other factors that accelerate the increase in livestock production. Moreover, the constraining effect of land tenure reform on the increase in livestock production decreases with the number of years for which land tenure reform has been implemented, and ultimately disappears. Remarkably, the constraining effect of land tenure reform is stronger on the increase of livestock population than on that of meat output. This indicates that land tenure reform is beneficial in that it improves livestock productivity. In conclusion, land tenure reform, namely the privatisation of grassland use rights, puts a ceiling on livestock production, which could be a possible reason as to why it has been difficult to implement the reform on grasslands. However, the reform does prove to be beneficial in improving the livestock productivity of pastoral areas.