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Article
Publication date: 1 February 2016

Yi Che

– The purpose of this paper is to examine the impacts of off-farm labor employments on household land rental behavior in rural China.

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Abstract

Purpose

The purpose of this paper is to examine the impacts of off-farm labor employments on household land rental behavior in rural China.

Design/methodology/approach

IV-Probit and IV-Tobit model are used to identify the estimate of interest.

Findings

The results indicate that households with more members participating in either migration or local off-farm work are more/less likely to rent out/in land. Moreover, the effect of migration on household land rental behavior is much larger than the effect of local off-farm work.

Practical implications

These results suggest that ensuring benefits of migrants in urban cities can automatically promote household land rental behavior in rural China.

Originality/value

The authors provide a rigorous and careful empirical analysis on the effect of off-farm employment on household land rental behavior and pay special attention to the endogeneity issue tackled using separable instruments.

Details

China Agricultural Economic Review, vol. 8 no. 1
Type: Research Article
ISSN: 1756-137X

Keywords

Article
Publication date: 29 April 2014

Yi Che

The purpose of this paper is to evaluate the relative impacts of full-scale land reallocation (FLR) and partial-scale land reallocation (PLR) on household land rental behavior in…

Abstract

Purpose

The purpose of this paper is to evaluate the relative impacts of full-scale land reallocation (FLR) and partial-scale land reallocation (PLR) on household land rental behavior in rural China.

Design/methodology/approach

Probit model, Tobit model and Semi-parametric model are used to provide empirical evidences.

Findings

Drawing upon an unique farm survey in 2003, the authors find that in rural China, FLR is more likely to follow egalitarian rule and PLR takes productivity of households into consideration. Econometric analysis provides two main findings. First, FLR has positive effect on household land rental behavior, possibly because egalitarian FLR creates a mismatch between household agricultural ability and land size and after FLR households have to participate in land rental market to adjust the mismatch. Second, PLR has negative effect on household land rental behavior which supports that land reallocation and land rental market are substitutes (Brandt et al., 2004).

Originality/value

The main contribution of this study is to show that FLR and PLR in rural China are motivated by two different rationales (i.e. FLR by egalitarian concerns and PLR by efficiency concerns).

Details

China Agricultural Economic Review, vol. 6 no. 2
Type: Research Article
ISSN: 1756-137X

Keywords

Open Access
Article
Publication date: 7 April 2023

Eva Seewald, Samantha Baerthel and Trung Thanh Nguyen

This study aims to investigate whether the participation in land rental markets helps to mitigate impacts by climate change on multidimensional poverty in Thailand and Vietnam.

Abstract

Purpose

This study aims to investigate whether the participation in land rental markets helps to mitigate impacts by climate change on multidimensional poverty in Thailand and Vietnam.

Design/methodology/approach

The authors use precipitation data from the National Aeronautics and Space Administration (NASA) and self-reported shocks from the Thailand Vietnam Socio-Economic Panel (TVSEP) project to estimate climate change. Data from the TVSEP are also used to calculate a multidimensional poverty index (MPI). Fixed-effect logit panel regressions with interaction terms are implemented to analyze the above mentioned.

Findings

The results show that land rental markets are used as mitigation strategies to climate change in Thailand and Vietnam. The participation in land rental markets also reduces multidimensional poverty. However, as a mitigation strategy, land rental markets are only successful in certain circumstances.

Research limitations/implications

The results show that there is potential in using land rental markets as mitigation strategies to climate change. Further research is needed to better understand which adaptation strategies, besides land rental market participation, and which combinations of different adaptation strategies are successful to mitigate negative effects induced by climate change.

Practical implications

The results show that there is potential in using land rental markets as mitigation strategies to climate change. Therefore, education in the participation in land rental markets and how to use them as a mitigation strategy can be a way to increase households' resilience to negative effects induced by climate change. Households make better decisions regarding their land when they are better informed on the functionality of land rental markets. Additionally, being better informed increases self-confidence to participate in land-rental markets.

Originality/value

Land rental markets as a mitigation strategy to climate change rarely have been studied, and if so, mainly the effect of leasing land has been studied. Additionally, the authors implement new measures of poverty – a multidimensional view on poverty which provides new insights into who are the poor and how they can be lift out of poverty.

Details

Journal of Economics and Development, vol. 25 no. 2
Type: Research Article
ISSN: 1859-0020

Keywords

Article
Publication date: 1 February 2001

Martin Lally

Land rents are sometimes set at a fixed percentage of land value called the ground rental rate, with the land value periodically revised. Intuitively the frequency of revision…

Abstract

Land rents are sometimes set at a fixed percentage of land value called the ground rental rate, with the land value periodically revised. Intuitively the frequency of revision should affect the appropriate rental rate. This paper derives the relationship between the rental rate and the frequency of revision. Depending upon discount rales and the expected growth rale in land value, the relationship may be positive or negative. In addition the revision frequency governs the extent to which inflation driven increases in interest rates induce changes in the rental rate. The latter changes range from virtually nothing to changes in tandem with interest rates.

Details

Pacific Accounting Review, vol. 13 no. 2
Type: Research Article
ISSN: 0114-0582

Article
Publication date: 18 March 2016

Xiaohuan Yan and XUEXI HUO

Economic reforms in rural China have led to the emergence of land and labor markets. The development of rural land rental markets can improve agricultural productivity and equity…

Abstract

Purpose

Economic reforms in rural China have led to the emergence of land and labor markets. The development of rural land rental markets can improve agricultural productivity and equity by facilitating transfers of land to more productive farmers and facilitating the participation in the non-farm economy of less productive farmers. In contrast to the burgeoning development of off-farm labor markets, the development of rural land rental market has lagged. The purpose of this study is to analyze the factors affecting households’ entry and transaction intensity in rural land rental markets, especially the effects of land tenure and off-farm employment.

Design/methodology/approach

Based on a field survey data of 479 household in Henan Province in 2009, the authors used Cragg’s double hurdle model to identify the determinants for households’ land rental participation and its transaction amount.

Findings

Off-farm employment is one of main driving factor for household’s land rent-out decision. Tenure insecurity reduces both the propensity and the magnitude of rental market transactions. Land use certificates significantly contribute to participation in land-rental markets and the rental amount.

Originality/value

This paper treats household land rental market participation as a related two-step process, focusing on both land transfer and its transaction amount. This paper also builds on a broad view, including analysis on both demand and supply side of land rental market.

Details

China Agricultural Economic Review, vol. 8 no. 2
Type: Research Article
ISSN: 1756-137X

Article
Publication date: 25 September 2019

Tongwei Qiu, Biliang Luo, Shangpu Li and Qinying He

The purpose of this paper is to assess the links between basic farmland preservation and land transfers in rural China.

Abstract

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.

Details

China Agricultural Economic Review, vol. 12 no. 1
Type: Research Article
ISSN: 1756-137X

Keywords

Article
Publication date: 27 January 2012

Jikun Huang, Liangliang Gao and Scott Rozelle

Developing nations need good cultivated land rental markets to foster rational resource use and to enhance productivity and equity. Can cultivated land rental markets emerge in…

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Abstract

Purpose

Developing nations need good cultivated land rental markets to foster rational resource use and to enhance productivity and equity. Can cultivated land rental markets emerge in the face of rapidly developing off‐farm labor markets? The purpose of this paper is to measure the correlation between the emergence of off‐farm employment and cultivated land rental in China.

Design/methodology/approach

Based on a panel data from 2000 and 2008, the authors constructed econometric models to identify the impact of off‐farm employment on the decisions of households to rent out and rent in cultivated land.

Findings

This paper finds that the emergence of off‐farm employment has significant and positive impacts on stimulating household to rent out cultivated land. The effect is less prominent for renting‐in decisions.

Originality/value

The paper empirically estimates the impacts of off‐farm employment on cultivated land rent markets based on a unique panel data set from a national representative sample.

Details

China Agricultural Economic Review, vol. 4 no. 1
Type: Research Article
ISSN: 1756-137X

Keywords

Article
Publication date: 6 July 2015

Jaclyn Kropp and Janet G. Peckham

In recent years, prices for prime farmland have increased substantially, begging the question is the dramatic increase the result of a speculative bubble or consistent with market…

Abstract

Purpose

In recent years, prices for prime farmland have increased substantially, begging the question is the dramatic increase the result of a speculative bubble or consistent with market fundamentals with increases driven by increased global demand, low interest rates, and recent changes to US agricultural and energy policies. The purpose of this paper is to investigate the impacts of recent agricultural support policies and ethanol policies on farmland values and rental rates.

Design/methodology/approach

Farm-level Agricultural Resource Management Survey data collected by the United States Department of Agriculture (USDA) between 1998 and 2008 as well as county-level data collected by the USDA, US Census Bureau, and Bureau of Economic Analysis are used to determine the impacts of recent agricultural support policies and ethanol policies on farmland values and rental rates, while controlling for parcel characteristics and urban pressure. Specifically, weighted ordinary least squares and two-stage least squares are used to investigate the impact of various governmental agricultural support policies, corn ethanol facilities location, and local corn ethanol production capacity on farmland values and rental rates.

Findings

The results indicate that government payments, urban pressure, and the proximity of the parcel to an ethanol facility have a positive impact on both farmland values and rental rates. More specifically, parcels located in the same county as at least one corn ethanol facility are more valuable and command higher rental rates. In addition, county-level ethanol production capacity is positively associated with farmland values and rental rates. An inverse relationship between distance of the parcels from an ethanol facility and farmland values is also found; a similar result is found for rental rates.

Research limitations/implications

The findings suggest that agricultural support payments and ethanol policies are capitalized into farmland values. These findings have important implications for the formulation of future farm policy. A limitation of the analyses is that farmland values are estimated by landowners; future research could utilize farmland transaction data to overcome potential biases generated by using landowner estimates. In addition, while our study period covers 11 years, future research could expand the time period further to analyze the effect of more recent agricultural and ethanol policies.

Originality/value

This paper extends prior research pertaining to factors influencing farmland values and rental rates by also examining the proximity of the parcel to an operating ethanol facility using a unique data set.

Details

Agricultural Finance Review, vol. 75 no. 2
Type: Research Article
ISSN: 0002-1466

Keywords

Article
Publication date: 21 September 2020

Tongwei Qiu, Qinying He, S.T. Boris Choy, Yifei Li and Biliang Luo

This study investigates the effect of renting in land on farm productivity, and the impacts of rented-in land size and transaction partner type on farm productivity.

Abstract

Purpose

This study investigates the effect of renting in land on farm productivity, and the impacts of rented-in land size and transaction partner type on farm productivity.

Design/methodology/approach

Data from the 2015 China Household Finance Survey are analyzed using an extended regression model and the two-stage least squares method.

Findings

Farm households that rent in land are likely to achieve higher farm productivity, and ignoring endogeneity underestimates the positive effect of land renting-in. Further evidence indicates that rented-in land size has an insignificant impact on farm productivity, and that there is no difference in farm productivity between lessees renting-in land from acquaintances and those renting-in land from non-acquaintances. These results may be caused by the higher degree of marketization of land rentals between acquaintances in China. With increasing competition in agricultural factor markets, in theory, rented-in land size should not affect farm productivity.

Practical implications

Overall, the analysis suggests that renting in land improves farm productivity, which supports the land transfer policies that have been rolled out in recent decades in China. However, our finding that rented land size does not affect farm productivity, consistent with the results in the literature, implies that the Chinese government should no longer subsidize or prefer large farms with low productivity. More attention should be paid to small lessees and market-oriented land rentals between acquaintances. Promoting the marketization of land transfers inside acquaintance networks could realize the potential of the land market, especially if land transfers decrease.

Originality/value

This study identifies the effects of renting in land, rented-in land size and type of rental transaction partner on farm productivity using nationally representative data. The findings imply that the government should pay more attention to the marketization of land rentals between acquaintances. Although existing studies regard land rental between acquaintances as informal and of low efficiency, the recent evidence shows that China's land markets are changing, and policy makers should adjust their policies accordingly.

Details

China Agricultural Economic Review, vol. 13 no. 1
Type: Research Article
ISSN: 1756-137X

Keywords

Article
Publication date: 3 May 2013

Nicholas D. Paulson and Gary D. Schnitkey

This article aims to explore recent trends in farmland rental markets using data for the state of Illinois. Trends in the types of rental agreements used and the relationship…

Abstract

Purpose

This article aims to explore recent trends in farmland rental markets using data for the state of Illinois. Trends in the types of rental agreements used and the relationship between the rental rate for those contracts, land values, crop revenues, production costs, and farm returns are examined.

Design/methodology/approach

Data from various sources and at different levels of aggregation for the state of Illinois are used to provide illustrations of historical trends in farmland rental agreements and rental rates, and how they are related to various market and industry factors. Focus is placed on the more recent period since 2005 characterized by high commodity price levels and volatility.

Findings

The majority of farmland in the Midwest is controlled under rental agreements which are increasingly of the fixed cash rent type. Rental rates have increased, but at a slower rate than farm returns. Average rental and interest rates imply that land values are consistent with the current market environment. Aggregate rental rates mask considerable variation in farm‐level rents, only a portion of which can be explained by differences in soil productivity. Given the current level of price volatility, the tenure position of a farm operation has a significant effect on downside risk exposure.

Originality/value

The illustrations provided in this paper should be of interest to researchers working in the area of farmland values and rental agreements, as well as to practitioners including farmers, landowners, and professional farm managers. The findings should motivate additional research and recognition of the importance of tenure position to the performance and risk exposure of grain farms.

Details

Agricultural Finance Review, vol. 73 no. 1
Type: Research Article
ISSN: 0002-1466

Keywords

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