Effects of Land and Labor Costs Growth on Agricultural Product Prices and Farmers’ Income

Jiang Wu, Ming Zhang (), Xu Yang and Buda Wu ()
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Jiang Wu: College of State Governance, Southwest University, Chongqing 400715, China
Ming Zhang: College of State Governance, Southwest University, Chongqing 400715, China
Xu Yang: College of International Studies, Southwest University, Chongqing 400715, China
Buda Wu: College of Science, The Australian National University, Canberra, ACT 2601, Australia

Land, 2024, vol. 13, issue 11, 1-23

Abstract: Widespread attention has been paid to the continuous rounds of rising agricultural product prices in China since 2003. During this period, rising prices were affected by input costs and international market prices; therefore, the degree of benefits obtained by farmers from the rise in agricultural product prices has been questioned. However, limited studies have examined the effect and relationship between rising agricultural product prices and farmers’ income. The purpose of the study was to provide empirical evidence on how the rise in agricultural product prices affects farmers’ income and to understand the role of land and labor costs in this context using provincial data from 2003 to 2020. The findings reveal that there is a threshold effect on the impact of the rise in agricultural product prices on farmers’ income. A moderate rise in agricultural product prices can increase farmers’ income, but excessive price increases have an insignificant effect. The causes behind the price rise significantly influence farmers’ income. An increase attributed to higher land and labor costs can improve farmers’ income, whereas a rise driven by international market prices or the cost of agricultural production inputs is unlikely to benefit farmers.

Keywords: agricultural product prices; farmers’ income; land cost; labor cost (search for similar items in EconPapers)
JEL-codes: Q15 Q2 Q24 Q28 Q5 R14 R52 (search for similar items in EconPapers)
Date: 2024
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