On the Transaction Values of Land Use Rights in Rural China

Purpose The purpose of this paper is to assess the links between basic farmland preservation and land transfers in rural China. Design/methodology/approach The Chinese provincial panel data from 2006 to 2016 were analyzed with the use of Arellano–Bond linear dynamic panel data estimations. Findings The basic farmland preservation policy negatively affects the land transfer rate. In addition, this policy is most likely to limit land transfers between local acquaintances in the major grain-producing areas. Further evidence indicates that the basic farmland preservation policy has a negative impact on land rentals in general. Considering that land transfers such as exchanges and take-overs are excluded from rental transactions between acquaintances, the policy’s constraints on land use are likely to hinder land rentals between acquaintances, which are market-oriented. Practical implications Overall, this study’s analysis suggests that the farmland preservation policy’s constraints on land use rights are likely to result in a major diminishment of the rural rental markets. Under this policy, land that is designated as basic farmland cannot be converted to another use. However, it remains possible to improve the productivity of agriculture through other means. These possible avenues for improvement include enhancing the efficiency of production through expanding the scale of farming operations and developing the social services aspect of agriculture (i.e. the basic farmland preservation policy is likely to realize more social revenue than can be gained from land transfers). Thus, the arrangement of the basic farmland preservation policy in China can be managed in a way that is both economical and reasonable. Originality/value To ensure food security, China has enacted several laws and regulations to preserve basic farmland, and it has promoted land transfers to improve farm productivity. Therefore, it is important to understand whether the basic farmland preservation policy restricts land use rights and hinders land transfers that could improve productivity. This study provides empirical evidence showing that the basic farmland preservation policy is actually not conducive to promoting land transfers and that it even discourages the market orientation of land rentals between acquaintances. In dealing with this issue, the Chinese Government should seek to balance the relationship between preserving basic farmland and promoting land transfers.

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Transfer of Land Use Rights in Rural China and Farmers’ Utility: How to Select an Optimal Payment Mode of Land Increment Income

Land ◽

10.3390/land10050450 ◽

2021 ◽

Vol 10 (5) ◽

pp. 450

Author(s):

Lei Yan ◽

Kairong Hong ◽

Hui Li

Keyword(s):

Land Use ◽

Rural China ◽

Case Analysis ◽

Land Rights ◽

Transfer Price ◽

Land Transfer ◽

Lump Sum ◽

Simulation Results ◽

Land Use Rights ◽

Rights Transfer

Background: The distribution of farmers’ increment income is the key to the transfer of land use rights. This research aims to detect the optimal payment mode for the distribution of land increment income obtained by farmers in land rights transfer. Methods: The research relied on case analysis, mathematical analysis, and numerical simulation. Results: According to China’s existing payment modes for the increment income of rural collectively owned operating construction land (RCOCL), we summarized these payment modes into three: namely, lump-sum currency payment, a mixed payment of pension and lump-sum currency, and a mixed payment of dividend and lump-sum currency. If the land transfer price of RCOCL is lower than a specific value, the lump-sum currency payment will be optimal for farmers. Suppose the land transfer price is higher than this value. If the enterprise’s profit margin is higher than the pension rate of return, the mixed payment of dividend and lump-sum currency will be optimal; if not, the mixed payment of pension and lump-sum currency will be optimal. Conclusions: Differences in regions, enterprise attributes, and farmers’ characteristics will make the optimal proportion of pension or stock capital in land increment income (OPPSC) different. Generally, OPPSC is often between 40% and 60%.

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