Land transfer and cropping structure: Evidence from China

Abstract

In 2023, China’s total grain output reached 1.3 trillion kilograms, marking 20 consecutive years of abundant harvests. While China has achieved remarkable historical milestones in ensuring food security, significant challenges remain, including structural imbalances in grain production, insufficient intrinsic motivation among farmers to grow grain, and a complex and volatile international environment. Building on a comprehensive review of existing literature, this paper categorizes Chinese farmers into two types: Type I farmers, who typically cultivate relatively small farmland areas, and Type II farmers, who operate larger farmland areas. Their crop planting decisions are analyzed within the frameworks of economies of scale and marginal profit analysis, and the proposed hypotheses are verified through numerical simulations. Using provincial-level data spanning from 2005 to 2022, the paper further establishes a bilateral stochastic frontier model for empirical measurement. The key findings are as follows: (1) The crowding-out effect of land transfer on the proportion of grain crops outweighs the crowding-in effect. (2) From 2011 to 2021, the crowding-out effect of land transfer on grain crop planting proportions demonstrates a positive spatial correlation. (3) The net negative effect of land transfer on grain planting proportions is smallest in major grain-producing areas but is more pronounced in regions with lower levels of rural financial development. Based on these findings, this paper proposes targeted recommendations to mitigate the non-grain effect of land transfer and safeguard food security.