Factors affecting farmland rental in rural China: Evidence of capitalization of grain subsidy payments

Zhang, Jian ^[1] ; Mishra, Ashok K. ^[2] ; Hirsch, Stefan ^[3] ; Li, Xiaoshun ^[1]
1. [1] China University of Mining and Technology
  
  China University of Mining and Technology
  
  China
2. [2] Arizona State University
  
  Arizona State University
  
  Estados Unidos
3. [3] Technical University Munich
  
  Technical University Munich
  
  Kreisfreie Stadt München, Alemania
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Localización: Land use policy: The International Journal Covering All Aspects of Land Use, ISSN 0264-8377, ISSN-e 1873-5754, Nº. 90, 2020
Idioma: inglés
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Resumen
- This study investigates the factors affecting farmland rental prices in China. Special emphasis is put on the capitalization of China’s grain subsidy program into land rental rates. Using national representative farm-level data, Heckman sample selection model, and quantile regression (QR) approach, we find that a 10% increase in grain subsidy payments for contracted farmland increases the farmland rental price by about 1%. However, quantile regression results show that the capitalization rate is heterogeneous and varies across the distribution. Findings suggest that family labor input and farm location are important factors driving up farmland rental prices. Moreover, for farm size, rental experience, and natural disaster we detect a negative impact on land rental prices.