How do farmland rental markets affect farmers’ income? Evidence from a matched renting-in and renting-out household survey in Northeast China

Abstract

Promoting farmland transfer through the farmland rental market is an essential instrument to achieve the scale economy of agricultural production in China. However, past literature on the land reform in China pays more attention to the renting-in household or the renting-out household, respectively, less to both types of households together. Using a large-scale survey of farm households in China, we examine the determinants of participation in the farmland rental market and quantify the impact of the rental market on farmers' income. Findings show household off-farm income, family members' part-time employment, agricultural subsidies, and participation in agricultural cooperatives significantly affect farmers' participation in the farmland rental market. Participation in the farmland rental market significantly increases the income of renting-in households, while it decreases the income of renting-out households, which might result from the temporary lag effect of the land system reform.