Search

Agricultural Product Marketization and the Expansion of Land Operation Scale among Grain Crop Farmers

Author(s)

Yu Zhong¹, Ziling Tang2,*, Lijie Chen², Luwen Xu², Hongyan Hong², Xinyu Li²

Affiliation(s)

1School of Management, Ocean University of China, Qingdao, Shandong, China 2College of Economics and Management, South China Agricultural University, Guangzhou, Guangdong, China *Corresponding Author

Abstract

Against the backdrop of insufficient demand in the farmland transfer market, agricultural product marketization has become a crucial channel through which smallholder farmers generate returns from agricultural production and, consequently, plays a pivotal role in their decisions regarding land operation scale. Using a sample of 1802 farm households from the 2020 China Rural Revitalization Survey (CRRS), this study empirically examines the impact of agricultural product marketization on large-scale land operation and explores the underlying mechanisms. The results show that, first, agricultural product marketization significantly increases smallholder farmers' propensity to expand their land operation scale. Second, this effect operates through two distinct channels: the income effect and the subsidy effect. Third, during the process of agricultural product marketization, farm households with a larger initial area of contracted farmland, as well as those located in major grain-producing regions or plain areas, are more likely to expand their land operation scale. These findings suggest that improving the level of agricultural product marketization is an effective means of stimulating farmers' demand for farmland and promoting large-scale land operation. Accordingly, policies should focus on strengthening smallholder farmers' market participation capacity and improving differentiated support and subsidy mechanisms to facilitate the effective integration of smallholder farmers into modern agricultural development.

Keywords

Smallholder Farmers; Agricultural Product Marketization; Large-Scale Land Operation; Chinese-Style Agricultural Modernization

References

[1]Li JY, Qin F. How can the demand dilemma of farmland transfer be solved? Evidence from the development of new agricultural business entities. Management World, 2022, 38(2): 84-99. [2]Yang Z, Rao FP, Zhu PX. The impact of agricultural socialized services on large-scale farmland management: Empirical evidence from the perspective of farmers' farmland transfer-in. Chinese Rural Economy, 2019(3): 82-95. [3]Xiao J, Luo BL. The core proposition of Chinese-style agricultural modernization: How can smallholders achieve large-scale farmland management? Evidence from returned migrant households. Rural Economy, 2023(2): 10-22. [4]Ye JP, Jiang Y, Feng L. An investigation of China's rural land transfer market: Analysis and policy recommendations based on a survey of 17 provinces in 2005. China Rural Survey, 2006(4): 48-55. [5]Wen L, Paudel KP, Chen YH, et al. The power of securing property rights: Evidence from China's land titling policy. Economic Development and Cultural Change, 2024, 72(4): 1829-1861. [6]Kuang YP, Peng Y. Historical evolution, driving mechanisms, and future pathways of China's farmland transfer institution. Rural Economy, 2024(4): 34-47. [7]Xu C, Wang Q, Fahad S, et al. Impact of off-farm employment on farmland transfer: Insight into the mediating role of agricultural production service outsourcing. Agriculture, 2022, 12(10): 16. [8]Jiang M, Li J, Paudel KP, et al. Factors affecting agricultural land transfer-out in China: A semiparametric instrumental variable model. Applied Economics Letters, 2019, 26(20): 1729-1733. [9]Zhu X, Wei C, Zhang F, et al. Influencing factors of farmers' farmland transfer in mountainous Chongqing, China: Evidence from a multiclass logistic model. Sustainability, 2022, 14(12): 16. [10]Wang LY, Li GC. The impact of digital finance use on farmers' farmland transfer behavior. Journal of China Agricultural University, 2025, 30(1): 293-304. [11]Luo BL, Zhang L. Farmland titling in China: A policy with potentially overestimated expectations. Economic Issues in China, 2020(5): 17-31. [12]Zhang Y, Zhang J, Liu Y, et al. Agricultural machinery service adoption and farmland transfer-in decisions: Evidence from rural China. Frontiers in Environmental Science, 2023, 11: 15. [13]Hong MY, Gong LJ. Cultivating new demand-side business entities to promote farmland transfer. Agricultural Economy, 2016(2): 18-20. [14]Peng WH, Li HN, Fu LL, et al. The impact mechanism of the development of new agricultural business entities on compensated farmland transfer: Evidence from the China Rural Household Panel Survey. China Land Science, 2022, 36(12): 58-68. [15]Zhao XF, Zhao XY. Capacity building of agricultural socialized services by new agricultural business entities and the development prospects of the smallholder economy. Issues in Agricultural Economy, 2018(4): 99-107. [16]Shang XD, Zhu SY. "Non-family management" of large-scale farmland by family farms and specialized farm households: Behavioral logic, operational performance, and policy deviation. Chinese Rural Economy, 2015(12): 4-13. [17]Peng JQ, Wu HT, Tan C, et al. The impact of agricultural mechanization on farmers' degree of market participation: A threshold effect analysis based on per capita basic farmland demand. Journal of China Agricultural University, 2019, 24(7): 167-180. [18]Zhong Z, Kong XZ. Market signals, farmer types, and the logic of agricultural production and management behavior: Evidence from a survey of more than 1000 farm households in Shandong, Shanxi, and Ningxia. Journal of Renmin University of China, 2013, 27(5): 62-75. [19]Gao S, Huang XJ, Zhong TY, et al. The impact of agricultural marketization on farmers' crop production performance: Empirical evidence from farm household surveys in Shanghai, Jiangsu, and Anhui. Geographical Research, 2013, 32(6): 1103-1112. [20]Mei FC, Ma KX. The debate over pathways to moderate-scale agricultural management: Land scale or service scale? Economic Survey, 2022, 39(2): 46-56. [21]Luo Y. Exploring the standards for moderate-scale agricultural management in contemporary China: An analysis from the perspective of costs and returns. Price: Theory & Practice, 2024(12): 91-98. [22]Xiong H, Jiang P, Ju C, et al. Mechanisms of farmers' voluntary farmland transfer behavior: Simulation, validation, and application. Management World, 2023, 39(6): 71-85. [23]Wang W, Wang Y, Shen Y, et al. The role of multi-category subsidies in cultivated land transfer decision-making of rural households in China: Synergy or trade-off? Applied Geography, 2023, 160: 12. [24]Xiao FW, Yang GQ, Guo JY. The impact of agricultural product marketization on farmers' farmland transfer-in behavior: Evidence from a survey of farm households in Jiangxi Province. Chinese Journal of Agricultural Resources and Regional Planning, 2016, 37(2): 45-51. [25]Wei HK. China Rural Revitalization Comprehensive Survey Report 2021. Beijing: China Social Sciences Press, 2022. [26]Jiang T. Mediation and moderation effects in empirical causal inference research. China Industrial Economics, 2022(5): 100-120. [27]Gao J, Zhao R, Lyu X. Is there a herd effect in farmers' land transfer behavior? Land, 2022, 11(12): 15. [28]Yang LL, Li XZ, Liu RF, et al. How can smallholders integrate into large markets? A perspective from the herd effect. Rural Areas, Agriculture and Farmers, 2025(2): 16-22. [29]Luo WY, Rong MQ, Guo SH. Differences and influencing factors of cultivated land use efficiency among farm households in desertification regions from the perspective of resource dependence: Evidence from household survey data in four prefectures of southern Xinjiang. Journal of Desert Research, 2024, 44(5): 105-115. [30]Deng H, Su LL, Sun TQ. Does integrating smallholders into modern agriculture enhance household resilience? Evidence from the China Rural Revitalization Comprehensive Survey. Research on Economics and Management, 2024, 45(9): 78-99. [31]Chen ZW, Zhao GS, Zhang XY. Factors influencing farm households' willingness to participate in the service-scale agricultural management model: Evidence from a survey of 632 farm households in Henan Province. Journal of Harbin University of Commerce (Social Science Edition), 2022(5): 109-119. [32]Wang LL. The role of agricultural product marketization in agricultural economic development: A brief analysis. Marketing Circle, 2023(8): 77-79.