Impact of farmland characteristics on grain costs and benefits in the North China Plain

Land characteristics in general and socio-economic characteristics in particular are assumed to play important roles in the determination of grain costs and benefits. This study explores the effects of farmland characteristics on grain costs and benefits using a multilevel linear model. The data refer to 1282 grain plots of 566 grain producers in the provinces of Henan, Shandong, and Anhui in the North China Plain. The results show that the coefficients of the variables used to measure plot size and tenure insecurity have different values and signs for households with different grain planted areas. It can be concluded that the effects of plot size and ratio of rented land are closely related to farmers’ total grain planted area, and only farmers with grain areas below 1.33 ha can achieve economies of scale. The effects of tenure insecurity of rented land on grain costs and benefits were negative, but the values became smaller and insignificant when farmers’ total grain area was sufficiently large. Regarding farmland bio-physical characteristics, farmers obtain more profit from plots with water conservancy facilities and have to invest more in poor land, with no output increments.