Trust evolution, institutional constraints, and land trusteeship decisions among Chinese farmers

Qi Li and Menghui Gao
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Qi Li: School of Economics, Qufu Normal University, Rizhao, Shandong, China
Menghui Gao: School of Economics, Qufu Normal University, Rizhao, Shandong, China

Agricultural Economics, 2023, vol. 69, issue 12, 485-497

Abstract: Land trusteeship involves farmers entrusting the farming and managing of their land to trustees, who manage the land on their behalf in exchange for a commission fee. Land trusteeship has been an important approach to bridging the gap between smallholder farmers and modern agriculture in China. Because of the information asymmetry in land trusteeship, farmers have higher uncertainty and perceived risk, so social trust and institutional constraints are particularly important in promoting farmers' participation in trusteeship. The objective of this study was to examine the impact of trust evolution and institutional constraints on smallholder farmers' decision-making in green prevention and pest control trusteeship. Our research was conducted in Shandong, China, utilising factor analysis and binary regression. The results revealed that trusteeship decision-making combines trust governance and institutional governance, with significant roles played by institutional trust, institutional supervision, institutional regulation, and interpersonal trust. As part-time farming became more prevalent, the importance of institutional trust and institutional supervision increased, indicating a shift in trusteeship governance from social relations to institutional contracts and the maturation of land trusteeship models. In addition, we also tested the interaction effect of social trust and institutional constraints and the heterogeneity effect of different trusteeship contracts. To improve the land trust system, we must enhance farmers' institutional trust and leverage the active role of intermediary supervision organisations such as village collectives.

Keywords: households; institutional regulation; institutional supervision; institutional trust; land trust; relational trust (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:caa:jnlage:v:69:y:2023:i:12:id:232-2023-agricecon

DOI: 10.17221/232/2023-AGRICECON

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