Transfer of Land Use Rights in Rural China and Farmers’ Utility: How to Select an Optimal Payment Mode of Land Increment Income

Lei Yan, Kairong Hong and Hui Li
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Lei Yan: School of Business, Central South University, Changsha 410083, China
Kairong Hong: School of Business, Central South University, Changsha 410083, China
Hui Li: School of Economics, Central South University of Forestry and Technology, Changsha 410083, China

Land, 2021, vol. 10, issue 5, 1-22

Abstract: Background: The distribution of farmers’ increment income is the key to the transfer of land use rights. This research aims to detect the optimal payment mode for the distribution of land increment income obtained by farmers in land rights transfer. Methods: The research relied on case analysis, mathematical analysis, and numerical simulation. Results: According to China’s existing payment modes for the increment income of rural collectively owned operating construction land (RCOCL), we summarized these payment modes into three: namely, lump-sum currency payment, a mixed payment of pension and lump-sum currency, and a mixed payment of dividend and lump-sum currency. If the land transfer price of RCOCL is lower than a specific value, the lump-sum currency payment will be optimal for farmers. Suppose the land transfer price is higher than this value. If the enterprise’s profit margin is higher than the pension rate of return, the mixed payment of dividend and lump-sum currency will be optimal; if not, the mixed payment of pension and lump-sum currency will be optimal. Conclusions: Differences in regions, enterprise attributes, and farmers’ characteristics will make the optimal proportion of pension or stock capital in land increment income (OPPSC) different. Generally, OPPSC is often between 40% and 60%.

Keywords: payment mode; land institution reform; unified urban-rural land market; land increment income; farmers’ utility; China (search for similar items in EconPapers)
JEL-codes: Q15 Q2 Q24 Q28 Q5 R14 R52 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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