Research on the Relationship between Price Mechanism and Short-Term Behavior in Chinese Farmland Trusteeships

Yunxian Hou and Pengfei Chen
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Yunxian Hou: College of Economics and Management, China Agricultural University, Beijing 100083, China
Pengfei Chen: College of Economics and Management, China Agricultural University, Beijing 100083, China

Sustainability, 2019, vol. 11, issue 20, 1-16

Abstract: After the policy of separating ownership rights, contract rights, and management rights to rural land, some Chinese farmers entrusted their land to agricultural social service providers. However, at present in land trusteeships, short-term behaviors exist, which are not good for the sustainable utilization of land. This article uses a dynamic game model to analyze the economic reasons for short-term behavior and to explore possible mechanisms. The study’s results showed that fluctuations in trusteeship prices encouraged farmers to sign low-price, long-term contracts or high-price, short-term contracts that allowed agricultural social service providers choose short-term behaviors. A variable-price system may avoid short-term contracts as a result of fluctuations in trusteeship prices, allowing both sides to build a long-term stable partnership, encouraging long-term investment in land. To ensure the sustainable utilization of land, it is suggested that both sides adopt a variable price system.

Keywords: sustainable utilization of farmland; farmland trusteeship in China; variable price system; agricultural social service providers; dynamic game model (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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