Impact of Farmland Rental Contract Disputes on Farmland Rental Market Participation

Xingguang Li and Xuexi Huo ()
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Xingguang Li: School of Land Science and Technology, China University of Geosciences (Beijing), Beijing 100083, China
Xuexi Huo: Center for Western Rural Development, College of Economics and Management, Northwest A&F University, Xianyang 712100, China

Land, 2022, vol. 11, issue 12, 1-16

Abstract: In the context of an ambiguous structure of farmland property rights, farmland rental contract disputes exhibited an upward tendency over the past decade, in practice, which damaged the expectations of land tenure security and, consequently, influenced the willingness of people to participate in farmland rental markets. Thus, the main aim of this paper was to analyze the impact of farmland rental contract disputes on farmland rental market participation, which was empirically tested by using a logit model, IV-probit model, and survey data for 762 apple growers. The results indicated that (1) farmland rental contract disputes significantly boosted the transfer of farmland to relatives and friends, (2) obtaining reasonable compensation in the process of solving farmland rental contract disputes significantly boosted farmland rental market participation for all types of objects of farmland transfers, and (3) farmland rental contract disputes significantly promoted farmers’ choice of relatives as the objects of farmland transfers. Participating in farmland rental markets was a freely pursued decision-making process, based on the actual situation, and farmers improved their expectations of the risks to farmland property rights by resorting to the reputation mechanism. However, obtaining reasonable compensation was conducive to reducing market segmentation and discrimination. Based on our analysis, the key factor in enhancing farmland rental market participation and reducing market segmentation was improving the stability of farmland property rights, and, in practice, farmland rental contract disputes should be reasonably reduced and regulated. This paper not only emphasizes the importance of solving farmland rental contract disputes reasonably, but also provides a reference for improving relevant laws and regulations on farmland transfers, which is conducive to developing farmland rental markets in the context of an ambiguous structure of farmland property rights in some developing countries.

Keywords: farmland rental contract disputes; reasonable compensation; farmland rental market participation; the objects of farmland transfers (search for similar items in EconPapers)
JEL-codes: Q15 Q2 Q24 Q28 Q5 R14 R52 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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