Does farm size matter for participation in a land fallowing policy? Evidence from China

Land fallowing policy reduces the negative resource-use externalities, including water resources. Previous studies of land fallowing policies identified different factors that explain the willingness of farmers to participate in these programmes. However, less attention was placed on farm size as an important explanatory variable. We develop a theoretical model to explain the role of farm size in decisions to participate in land fallowing programmes. We then apply the theory to the Seasonal Land Fallowing Policy (SLFP), enacted to reduce agricultural groundwater use by fallowing the cultivated land of winter wheat in Hebei Province, China. Both small- and large-scale farmers participate in the programme. Using survey data, we examined whether farm size matters in decisions to participate as part of a set of variables, including farm and farmer characteristics and government requirements. Our results indicate that farm size significantly affects participation in the programme— the larger the farm, the more likely it will participate. The results are robust to various specifications. We also find that government requirements largely impact the decisions of small-scale farmers to participate. The findings have important implications for policy formulation and distinction among small- and large- scale farms.