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Land Reallocation and Its Impacts on Technical Efficiency --Evidence from China’s Agricultural Production

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  • Zhang, Yanjie
  • Wang, Xiaobing

Abstract

China’s economic reforms make the farmers face the risk of land reallocation and adjustment, raising the questions about the impact of land reallocation on farm productivity and efficiency. Deep understanding what determines land reallocation, whether and to what extent farm productivity and efficiency are affected by the frequency of land reallocation could help policy makers introduce better targeted rural development policies. The aim of this study is first to explore the determinants of land reallocation, and then analyze how land reallocation influences productivity and efficiency in agricultural production. This study is based on panel data set over 1995-2002 from rural households in Hubei and Yunnan provinces. Our results indicate that the likelihood of land reallocation is influenced by the opportunity of off-farm employment and the geographic characteristics and location of the village. The development of land rental market is substitute of land reallocation in optimizing the allocation of land resource. Average technical efficiency was found to be 72%. Farms with high variability in farm revenue were found to be more technically efficient than farms with low revenue variability. The predicted probability of land reallocation was statistically significant among factors affecting farm productivity and efficiency. In other words, we do find the systematic difference in farm productivity and technical efficiency between farmers have been reallocated land or not during the period of land tenure.

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Bibliographic Info

Paper provided by International Association of Agricultural Economists in its series 2009 Conference, August 16-22, 2009, Beijing, China with number 51954.

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Date of creation: 2009
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Handle: RePEc:ags:iaae09:51954

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Keywords: Land reallocation; Technical efficiency; Rural China; Land Economics/Use; Q12; Q15;

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References

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  1. Hung-jen Wang & Peter Schmidt, 2002. "One-Step and Two-Step Estimation of the Effects of Exogenous Variables on Technical Efficiency Levels," Journal of Productivity Analysis, Springer, vol. 18(2), pages 129-144, September.
  2. Liu, Shouying & Carter, Michael R. & Yao, Yang, 1998. "Dimensions and diversity of property rights in rural China: Dilemmas on the road to further reform," World Development, Elsevier, vol. 26(10), pages 1789-1806, October.
  3. Brummer, B. & Glauben, T. & Lu, W., 2006. "Policy reform and productivity change in Chinese agriculture: A distance function approach," Journal of Development Economics, Elsevier, vol. 81(1), pages 61-79, October.
  4. Li, Guo & Rozelle, Scott & Brandt, Loren, 1998. "Tenure, land rights, and farmer investment incentives in China," Agricultural Economics: The Journal of the International Association of Agricultural Economists, International Association of Agricultural Economists, vol. 19(1-2), September.
  5. Butler, J S & Moffitt, Robert, 1982. "A Computationally Efficient Quadrature Procedure for the One-Factor Multinomial Probit Model," Econometrica, Econometric Society, vol. 50(3), pages 761-64, May.
  6. Li, Guo & Rozelle, Scott & Brandt, Loren, 1998. "Tenure, land rights, and farmer investment incentives in China," Agricultural Economics, Blackwell, vol. 19(1-2), pages 63-71, September.
  7. Yang Yao, 2000. "The Development of the Land Lease Market in Rural China," Land Economics, University of Wisconsin Press, vol. 76(2), pages 252-266.
  8. Kung, James Kai-sing, 2002. "Off-Farm Labor Markets and the Emergence of Land Rental Markets in Rural China," Journal of Comparative Economics, Elsevier, vol. 30(2), pages 395-414, June.
  9. Lin, Justin Yifu, 1992. "Rural Reforms and Agricultural Growth in China," American Economic Review, American Economic Association, vol. 82(1), pages 34-51, March.
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Cited by:
  1. Grammatikopoulou, Ioanna & Myyra, Sami & Pouta, Eija, 2011. "The proximity of a field plot and land-use choice: implications for land consolidation," 2011 International Congress, August 30-September 2, 2011, Zurich, Switzerland 114602, European Association of Agricultural Economists.

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