Transformations  in
Business & Economics

INFLUENCE FACTORS OF FARMLAND SCALE MANAGEMENT IN CHINA FROM THE PERSPECTIVE OF LAND CIRCULATION³
Gaosong Zhao, Zhongwei Chen, Fei Wang

ABSTRACT. The development of the agricultural economy is inseparable from the improvement of farmland utilisation efficiency. Farmland scale management is a precondition for improving farmland utilisation efficiency, and it is especially important to explore the factors that influence farmland scale management, which is a concern in various countries in the world, especially in developing countries. To explore the factors affecting farmland scale management, data on China's rural areas during 1986-2015 were utilised to empirically test the supply, demand, and institutional factors influencing farmland scale management through the vector error correction model (VECM). Results show that the scale management status of farmland is the result of the joint action of farmland demand, supply, and institutional factors. The increase in the per mu farmland revenue is the primary factor stimulating farmland demands, but the labour force demanded by the unit land and the degree of farmland fragmentation have insignificant effects on farmland demands because of the strong survival and emotional dependence of China's farmers on the land. Per mu farmland revenue, busy farming time, and per household quantity of labour force generates significant inhibiting effects on farmland supply, which in turn is positively influenced by the non farm income level, non-agricultural employment proportion, farmland transfer rent, per household farmland area, and labour force characteristic of a rural family. The institutional change index promotes farmland scale management by enhancing the survival and safety guarantee and increasing rural income. Moreover, supply, demand, and institutional factors show regional differences concerning their effects on the farmland scale management. The conclusions obtained from this study can provide a theoretical basis for related government sectors to formulate agricultural development policies that boost farmland scale management and improve farmland utilisation efficiency.

KEYWORDS:  land circulation, scale management, vector error correction model.

JEL classification:  Q15, Q18, R14.

³Acknowledgements:  This study was supported by Henan Soft Science Project (No.212400410135).