Does farm size matter for participation in a land fallowing policy? Evidence from China

ABSTRACT

Land fallowing policy reduces the negative resource-use externalities, including water resources. Previous studies of land fallowing policies identified different factors that explain the willingness of farmers to participate in these programmes. However, less attention was placed on farm size as an important explanatory variable. We develop a theoretical model to explain the role of farm size in decisions to participate in land fallowing programmes. We then apply the theory to the Seasonal Land Fallowing Policy (SLFP), enacted to reduce agricultural groundwater use by fallowing the cultivated land of winter wheat in Hebei Province, China. Both small- and large-scale farmers participate in the programme. Using survey data, we examined whether farm size matters in decisions to participate as part of a set of variables, including farm and farmer characteristics and government requirements. Our results indicate that farm size significantly affects participation in the programme— the larger the farm, the more likely it will participate. The results are robust to various specifications. We also find that government requirements largely impact the decisions of small-scale farmers to participate. The findings have important implications for policy formulation and distinction among small- and large- scale farms.

KEYWORDS:

• Farm size
• land fallowing policy
• participation
• China

JEL:

• Codes: Q15
• Q18
• Q24
• Q25

Acknowledgements

This paper was prepared while the lead author was a visiting graduate student at the School of Public Policy, University of California, Riverside, USA.

Disclosure statement

No potential conflict of interest was reported by the author(s).

Notes

1 This standard is used in our survey to identify the large-scale farmers. In the following text, a large-scale farmer is a farmer with a farm size equal or greater than 3.33 ha. One ha equals 15 mu.

2 This compensation standard is equal to US$ 1,087 per ha per year (US$ 1 equals 6.9 CNY in 2019).

3 Prefecture is the main administrative unit in China, one rank below that of provinces (the highest non-national level administrative unit). They consist of several districts and counties.

4 The matching approach ensures similar physical characteristics between SLFP and non-SLFP villages within the same township. The characteristics include the scale of contiguous areas, cropping pattern, irrigation condition and distance from the village committee to highway or county government.

5 The aquifer in this region is separated into a shallow and a deep unit by a confining layer. Farmers usually exploit groundwater in the shallow unit firstly by drilling shallow wells. When the shallow groundwater is almost exhausted or the shallow wells cannot be used, they begin to drill deep wells to pump groundwater in the deep unit.

6 Village group is a smaller unit in the village, and farmers in the same village group tend to live closer to each other.

7 There are four types of large farmers in our survey (farmer cooperatives, family farms, large grain growers, and agricultural companies), we group large grain growers as family farms since both of these two types of large farms are operated by household and may only differ by name.

Additional information

Funding

This work was supported by National Natural Science Foundation of China: [Grant Number 41861124006, 71874007]; Ministry of Science and Technology of the People Republic of China: [Grant Number 2021YFC3200505].