Abstract:

Land circulation is an important measure that can be utilized to enable agricultural management at a moderate scale. It is imperative to explore spatiotemporal changes in land circulation and the factors that drive these variations in order to increase the vitality of land rental market in China. Based on a sample of 169 511 farm households from the rural fixed observation point system between 2003 and 2013, this paper revealed the regional differences in land circulation and used Heckman two-stage models to identify the drivers of regional differences in land circulation. The results of this study show that: (1) the rate of land circulation in China rose from 17.09% to 24.1% over the course of the study period, an average rate of 0.7%. (2) The rate of land circulation in the south of China has been higher than that in the north, the average land rental payment was 283.74 yuan per mu, and 55.05% of farm households did not pay a fee in the process of land circulation. In contrast, the average rent that leasers received was 243.23 yuan per mu nationally even though 52.36% of households did not receive any payments from their tenants. At present, the rate of rent-free land circulation was more than 50% in China's land rental market. In addition, the average rent in developed provinces, such as Jiangsu, Shandong, Guangdong and Zhejiang, was 40% higher than the national average. (3) The results show that land quality, geographic location, transaction costs, and household characteristics have all significantly affected land circulation in different regions of China. The marginal effects of land quality and geographic location were larger in the plain regions, while transaction cost was the key factor influencing land circulation in the hilly and mountainous regions. The essence of rent-free land circulation was a sign of mismatch of land resources, and the marginalization of mountainous regions and higher transaction costs reduced the potential value of land resources. Thus, as the opportunity cost of farming continues to rise across China, the depreciation of land assets will become irreversible and land abandonment will be anabatic in the hills and mountains in the future. The transaction costs in land rental market should be reduced by establishing the land circulation intermediaries at the township level. Also, more attention should be given to the critical issues of farmland abandonment and poverty reduction in the hills and mountains.

Key words: land circulation, regional difference, zero rent, influencing factors, heckman model, China