The impact of land security and input allocation on farm household income

Yanjie Zhang, Xiaobing Wang, Bernhard Brümmer and Xiaohua Yu

No 126467, 2012 Conference, August 18-24, 2012, Foz do Iguacu, Brazil from International Association of Agricultural Economists

Abstract: China’s rural reforms expose farm households to the risk of administrative land reallocation and adjustment. The possibility of land reallocation gives rise to the problem of tenure insecurity which reduces farm households' incentives to invest in the land and to use the labor forces efficiently and hence negatively affect farmers' income. In this study, the normalized quadratic profit function is used to analyze profit maximization problems in farm households in the Zhejiang and Hubei provinces of China from 1995 to 2002. Additional variables have been introduced to capture the effects of a series of institutional environment and factor market constraints, including land insecurity, crop cultivation structure, labor input and capital input allocations between agricultural and non-agricultural productions. Our results indicate that, although the official controls on rural labor mobility have been relaxed, the rural labor market has not yet reached the optimal level, and a less-than-optimal level of labor input is devoted to non-agriclutural activities for farm households in both provinces. Furthermore, the negative effects of land tenure insecurity on farmhousehold income through the interactions with the other three input allocations are observed in the Hubei province.

Keywords: Agricultural and Food Policy; Community/Rural/Urban Development; Consumer/Household Economics; Crop Production/Industries; Food Security and Poverty; Labor and Human Capital; Land Economics/Use; Production Economics (search for similar items in EconPapers)
Pages: 22
Date: 2012
New Economics Papers: this item is included in nep-agr and nep-tra
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Persistent link: https://EconPapers.repec.org/RePEc:ags:iaae12:126467

DOI: 10.22004/ag.econ.126467

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