Resources Science ›› 2020, Vol. 42 ›› Issue (9): 1668-1679.doi: 10.18402/resci.2020.09.03

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Effect of maize price decline on land transfer in the North China Plain

WANG Qian(), YU Jin()   

  1. College of Economics and Management, Northwest A & F University, Yangling 712100, China
  • Received:2019-10-15 Revised:2020-08-17 Online:2020-09-25 Published:2020-11-25
  • Contact: YU Jin E-mail:wangqian706@126.com;yujin@nwsuaf.edu.cn

Abstract:

Since most of the land transferred among land rental markets is used for grain production, the effect of grain price decline is closely related to the agricultural modernization progress and the national food security in China. As one of the three staple grain crops, the price of maize experienced a significant decline during 2014 to 2016, which had an important effect on farmers’ land rental behaviors. In this study, we specifically explored the effect of maize price decline on farmers’ land renting decisions and ratio of non-grain crops with the random logit model and fixed effect model based on the three-period panel data of 621 households from 8 counties in Henan and Shandong provinces, and we got the following results. First, maize price had a significant effect land transfer, in which maize price decline increased farmers’ willingness to rent out land and decreased farmers’ willingness to rent in land, leading to the structure change among households that participated in the land rental markets. Second, rent-in households had heterogeneous strategies in dealing with the maize price decline because market-oriented rent-in grain producers enlarged the farm size by renting in more land, while non-market-oriented rent-in grain producers had no significant change in the area of land that they rented in. Third, the maize price decline aggravates the non-grain production problem by increasing the ratio of non-grain crops among rent-in households. We reached the conclusion that maize price decline can help to achieve large-scale grain production in China, but the increasing tendency to plant non-grain crops among rent-in households can have an adverse effect on the national food security.

Key words: maize price decline, land transfer, heterogeneity, non-grain production, fixed-effect ordinary least squares (OLS) model, North China Plain