Does Security of Land Operational Rights Matter for the Improvement of Agricultural Production Efficiency under the Collective Ownership in China?

Xianqing Ji, Shouying Liu, Jianan Yan, Youyi Li

Abstract

Under the “separation of three rights” policy, the impact of security of land operational rights on agricultural production efficiency has attracted much attention in recent years. Data envelopment analysis and mediation effect analysis were applied to 888 family farms run by new-type agricultural operators from Songjiang to identify the mechanism of the effect of land operational rights security on agricultural production efficiency through long-term investment. The results show that greater security of land operational rights generally increased agricultural production efficiency. Approximately 37.94 percent of the impact could be explained by long-term investment. The results also indicate that significant heterogeneity exists in the effect of land operational rights security on agricultural production efficiency at various levels of the family farms’ efficiency distributions. It is suggested that government should legalize land operational rights and give them a status equal to those of households’ contractual rights and land ownership rights in China’s future land tenure reform.