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The role of contract type in soil-improving investments: evidence from rice-planting large-scale production units in China

Published online by Cambridge University Press:  17 March 2020

Fang Li ,
Shuyi Feng Open the ORCID record for Shuyi Feng [Opens in a new window] ,
Hualiang Lu ,
Futian Qu  and
Marijke D'Haese
Fang Li
Affiliation:
Department of Agricultural Economics, Ghent University, Gent, Belgium College of Public Administration, Nanjing Agricultural University, Nanjing, China
Shuyi Feng*
Affiliation:
College of Public Administration, Nanjing Agricultural University, Nanjing, China
Hualiang Lu
Affiliation:
School of Business, Changzhou University, Changzhou, China School of Business Administration, Nanjing University of Finance and Economics, Nanjing, China
Futian Qu
Affiliation:
College of Public Administration, Nanjing Agricultural University, Nanjing, China
Marijke D'Haese
Affiliation:
Department of Agricultural Economics, Ghent University, Gent, Belgium
*
*Corresponding author. E-mail: shuyifeng@njau.edu.cn
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Abstract

The emerging large-scale production units (LSPUs) have become increasingly important in Chinese agricultural production and rural transformation due to rapid industrialization and urbanization. Based on household and plot-level data from Jiangsu and Jiangxi Provinces in China, this study provides insights into the farming systems of these LSPUs and examines how contract type, as a proxy for land tenure security, impacts on the production unit's soil-improving investments. Results from the two-stage control function approach show that the written nature of contracts positively affects the application of organic fertilizer and green manure on rented-in plots. Descriptive analysis also confirms the collateralization effect of contract type by showing that plots that are used as collateral for credit are characterized by written contracts. Policies facilitating LSPUs' access to farmland with more formal contracts may therefore play an important role in improving soil quality and land productivity.

Keywords

collateralization effectland tenure securitylarge-scale farmingrental contractsustainable agriculture
Type
Research Article
Information
Environment and Development Economics , Volume 25 , Issue 4 , August 2020 , pp. 334 - 354
Copyright
Copyright © The Author(s), 2020. Published by Cambridge University Press

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