An Estimation of the Extent of Rent-Free Farmland Transfer and Its Driving Forces in Rural China: A Multilevel Logit Model Analysis

Abstract

In recent years, the rent-free farmland transfer has become increasingly prominent in rural China. By employing multiple data sources, this study estimates the extent of rent-free land transfer from 1986 to 2015 and develops a multilevel logit model to identify its drivers. The results show that the extent of rent-free land transfer has been increasing, especially since 2002, and 30% to 50% of the land that has been transferred does not receive any rent, both in terms of the number of land parcels and the land area. There are obvious regional differences for the rent-free phenomenon in the process of land transfer, especially in mountainous areas, where the proportion is more than 70%. The cost-benefit analysis at the land parcel level shows that the average net income of rent-free land per mu that has been transferred (1 mu = 1/15 ha) is at a loss of 66 yuan, at 35 yuan. The rent-free land transfer is affected by factors at the levels of the land parcel, farmer and village. The land parcel size, quality level and irrigation condition are the key factors at the land parcel level; the ratio of the non-agricultural income in the family and land fragmentation are the key factors at the farmer level, and the inter-village gap is the key factor at the village level. The land parcel features account for approximately 40% of the variation in the rent-free land transfer. In sum, the increase in the labour cost is the direct reason for the rent-free land transfer, and land parcel features and the marginalization of mountainous areas are the preconditions for the rent-free land transfer. A rent-free land transfer is reasonable to some extent, but it is not an informal land transfer, and land rent does not play an effective role in allocating land resources. In this process, the idle or abandoned land resources in mountainous areas become relatively rich. The government should reasonably introduce urban capital and fully tap relatively rich land resources to realize the land capital appreciation and develop the local economy, and it should further regulate the land rental market and lay an emphasis on the integration of land resources, while moderating scale operations in mountainous areas.