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Land Reallocations, Passive Land Rental, and the Development of Rental Markets in Rural China

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  • Kung, James Kai-sing
  • Shimokawa, Satoru
Abstract
Based on a unique farm survey, this article intends to shed new light on the intriguing relationship between administrative land reallocations and the development of land rental markets in China. We find that the two alternative mechanisms of allocating arable land tend to be substitutes where land is reallocated “partially” only among households affected by demographic change (PLR). Where village-wide or “full-scale” reallocations (FSLR) are conducted among all households, however, land rental market transactions have increased in response to the enlarging mismatch in labor-land ratios across households; transactions that would not have occurred otherwise. While inefficient in the short-run, FSLR potentially facilitates the development of land rental markets as it unwittingly brings together parties with a mere arms-length relationship (e.g., non-relatives) to contract with each other, in light of the finding that households affected by PLR tend to lease land primarily to/from their own relatives or through the village authorities.

Suggested Citation

  • Kung, James Kai-sing & Shimokawa, Satoru, 2012. "Land Reallocations, Passive Land Rental, and the Development of Rental Markets in Rural China," 2012 Conference, August 18-24, 2012, Foz do Iguacu, Brazil 125099, International Association of Agricultural Economists.
    • Handle: RePEc:ags:iaae12:125099
    DOI: 10.22004/ag.econ.125099
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    References listed on IDEAS

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    Cited by:

    1. Licheng Xu & Xiaodong Du, 2022. "Land certification, rental market participation, and household welfare in rural China," Agricultural Economics, International Association of Agricultural Economists, vol. 53(1), pages 52-71, January.
    2. Xu, Licheng & Du, Xiaodong, 2020. "Land certification, rental market participation, and income dynamics in rural China," 2020 Annual Meeting, July 26-28, Kansas City, Missouri 304247, Agricultural and Applied Economics Association.
    3. Lijuan Xu & Abbas Ali Chandio & Jingyi Wang & Yuansheng Jiang, 2022. "Does Farmland Tenancy Improve Household Asset Allocation? Evidence from Rural China," Land, MDPI, vol. 12(1), pages 1-22, December.
    4. Li, Xinyi & Ito, Junichi, 2021. "An empirical study of land rental development in rural Gansu, China: The role of agricultural cooperatives and transaction costs," Land Use Policy, Elsevier, vol. 109(C).

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    Keywords

    Agricultural and Food Policy; Land Economics/Use;

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