Can large-scale farmland transfer improve agricultural productivity? Evidence from rural Jiangsu, P.R. China

Based on the survey data of 285 grain producing lessee operating units in Jiangsu province and applying the multiple regression model and the estimation method with clustered robust standard errors, this study compared the differences in agricultural productivity between small-scale farm households and large-scale operating units, and further indicated the efficiency impacts of large-scale farmland transfer. Results show that, compared to small-scale farm households, only part of large-scale operating units can obtain higher agricultural productivity. Operation scale of 40 ~ 60 mu is the moderate scale where operating units can achieve the optimal allocative efficiency of agricultural production factors (i.e., land, labor, and capital). Specifically, compared to small-scale farm households (1 ~ 20 mu), those operating units, with an operation scale ranging from 10 to 15 times of the area of arable land contracted per household in local area (40 ~ 60 mu), can achieve higher land productivity, profit rate of cost, and total factor productivity; whereas those operating units with an operation scale more than 40 mu (including 40 ~ 60 mu, 60 ~ 120 mu, 120 ~ 500 mu) can obtain greater labor productivity.