China & World Economy / 93–108, Vol. 25, No. 4, 2017

What Are the Determinants of Large-scale Farming in China?

Xing Xia, Xian Xin, Ling Ma*

Abstract

The Chinese Government has increased its focus on expanding farm scale to promote agricultural development since 2010. A series of favorable polices has been adopted to support large-scale farming. Using a multivariate probit model and 2015 and 2016 rural household survey data, the present paper examines the factors that influence small farmers’ decision to become large-scale farmers. The empirical regression results suggest that the decision to become a large-scale farmer is significantly influenced by household human capital, cooperative membership, marketing channels, land-transfer contracts and government policies. However, the influence of these factors differs with respect to becoming large-scale grain and non-grain farmers. These results imply that policy tools should target these factors and the appropriate group of small-scale farmers. Generally, both central and local governments should promote large-scale farming by enhancing rural households’ human capital, improving marketing channels and providing agricultural social services, as well as encouraging returning migrant workers to engage in large-scale farming.

Key words: China, large-scale farming, multiple probit
JEL codes: Q12, Q15, Q18