The Capitalization Effect and Its Consequence of Agricultural Support Policies—Based on the Evidence of 800 Villages in China
Abstract
:1. Introduction
2. Background
2.1. Output Price Support Policies
2.2. Agricultural Subsidy Policies
3. Empirical Analysis
3.1. Data Sources
3.2. Variable Selection
- The dependent variables: The land rental price and area of land transfer in the village, which are measured by “the rental price of cultivated land in the village (CNY/mu·year)” and “the area of land transfer paid for a fee in the village”. Among them, the land rental price in the village increased from 207.8 CNY/mu in 2007 to 240 CNY/mu in 2008. The area of land transfer paid for with a fee in the village increased from 178 mu in 2007 to 241.2 mu in 2008 (15 mu equals 1 hectare).
- The key independent variable: Agricultural support policies, including output price support and agricultural subsidies. Following Lin and Huang [2], the output price support is measured by using the national intervention price corresponding to the cereal crops with the largest sown area in the village (the provinces where the output support policy is implemented) and the provincial sale price of grain crops in the previous year (the provinces where the output support policy is not implemented). In order to avoid the incompatibility between the price information caused by the differences in the types of cereals in the village, this paper set the output price support as 1 in 2007. Output price support increased from 1 in 2007 to 1.03 in 2008. Agricultural subsidies are measured using the “direct subsidies for grain production, subsidies for high-quality seeds, and comprehensive subsidies for agricultural inputs in the village”. The agricultural subsidies increased from 53 CNY/mu in 2007 to 87.7 CNY/mu in 2008.
- The mediator variable, the regional land rent, is measured using the “average land rental price of other villages in the province”. The regional land rent increased from 195.3 CNY/mu in 2007 to 240 CNY/mu in 2008.
- The control variables include market return of land, development of land market, agricultural support services provided by the village collective (such as services for irrigation or labor migration), and incidence of natural disasters. Among them, the average yield of grain in the county referred to as market return of land is 407.8 kg/mu. In total, 20% of the villages had land rental activities 5 years ago, while 40% and 10% of the villages provide services for irrigation and labor migration by village collective, respectively. Villages suffering from natural disasters dropped from 60% in 2007 to 40% in 2008.
3.3. Econometric Models
3.3.1. Basic Regression Model
3.3.2. The Mediating Effect Model
3.3.3. Identification Strategy
4. Results
4.1. Basic Results
4.2. Heterogeneity Analysis
4.3. Results of Mediating Effect
5. Conclusions and Suggestions
Author Contributions
Funding
Institutional Review Board Statement
Informed Consent Statement
Data Availability Statement
Acknowledgments
Conflicts of Interest
References
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Variables. | Definition | Mean | ||
---|---|---|---|---|
2007 | 2008 | 2007–2008 | ||
Land rental price a | Land rental price in the village (CNY/mu·year) | 207.8 | 240.0 | 224.0 |
Area of land transfer | Area of land transfer in the village (mu) | 178.0 | 241.2 | 209.6 |
Output price support a | Intervention price or sale price corresponding to the largest sown area of grain crops in the village (2007 = 1) | 1.0 | 1.03 | 1.01 |
Agricultural subsidies a | Subsidies for grain production, high-quality seeds, and agricultural inputs (CNY/mu) | 53.0 | 87.7 | 70.4 |
Regional land rent a | Land rental price of other villages in the province (CNY/mu·year) | 195.3 | 240.0 | 217.7 |
Market return | Yield of grain in the county (kg/mu) | 400.7 | 414.9 | 407.8 |
Market development | Land rental activities existed in the village 5 years ago. Yes = 1, No = 0 | 0.2 | 0.2 | 0.2 |
Irrigation service | Irrigation service provided by village collective. Yes = 1, No = 0 | 0.4 | 0.4 | 0.4 |
Migration service | Labor migration service provided by village collective. Yes = 1, No = 0 | 0.1 | 0.1 | 0.1 |
Natural disaster | Village suffered from natural disaster. Yes = 1, No = 0 | 0.6 | 0.4 | 0.5 |
Variable | Dependent Variable: Land Rental Price | ||||||
---|---|---|---|---|---|---|---|
(1) | (2) | (3) | (4) | (5) | (6) | (7) | |
Output price support | 466.40 ** | 340.92 ** | 322.44 ** | 174.83 | |||
(179.12) | (160.09) | (154.77) | (145.25) | ||||
Agricultural subsidies | 0.61 ** | 0.48 ** | 0.45 ** | 0.39 ** | |||
(0.24) | (0.21) | (0.20) | (0.19) | ||||
Market return | 0.76 ** | 0.80 ** | 0.63 ** | 0.69 ** | 0.65 ** | ||
(0.32) | (0.33) | (0.30) | (0.31) | (0.30) | |||
Market development | 110.50 ** | 106.90 ** | 104.77 ** | ||||
(46.71) | (45.67) | (45.14) | |||||
Irrigation service | −20.67 * | −19.60 * | −19.48 * | ||||
(11.58) | (11.27) | (11.25) | |||||
Migration service | 32.86 *** | 30.56 *** | 31.04 *** | ||||
(11.26) | (11.30) | (11.09) | |||||
Natural disaster | 18.29 | 19.60 | 19.84 | ||||
(17.58) | (17.50) | (17.49) | |||||
Constant | −249.22 | −431.74 * | −458.27 * | 180.85 *** | −65.68 | −115.78 | −272.29 |
(181.72) | (219.46) | (238.92) | (16.99) | (121.47) | (136.22) | (210.58) | |
Fixed effect | YES | YES | YES | YES | YES | YES | YES |
Observation | 1598 | 1598 | 1598 | 1598 | 1598 | 1598 | 1598 |
F test | 6.78 *** | 4.56 *** | 3.22 *** | 6.44 *** | 5.13 *** | 3.37 *** | 2.94 *** |
R squared | 0.019 | 0.035 | 0.062 | 0.034 | 0.044 | 0.070 | 0.072 |
Variable | Villages with Strong Social Relationship | Villages with Weak Social Relationship | Renting Land within the Same Village | Villages Renting Land to Outsiders | ||||
---|---|---|---|---|---|---|---|---|
(1) | (2) | (3) | (4) | (5) | (6) | (7) | (8) | |
Output price support | 38.29 | 434.51 ** | −53.52 | 915.99 * | ||||
(114.23) | (202.36) | (98.48) | (518.18) | |||||
Agricultural subsidies | 0.20 * | 0.63 * | 0.20 | 0.60 * | ||||
(0.12) | (0.33) | (0.12) | (0.35) | |||||
Market return | 0.07 | 0.01 | 1.17 *** | 0.96 ** | 0.66 ** | 0.56 ** | −0.18 | −0.39 |
(0.26) | (0.23) | (0.42) | (0.39) | (0.32) | (0.28) | (0.33) | (0.36) | |
Market development | 81.33 ** | 77.58 ** | 122.94 ** | 118.06 ** | 139.72 ** | 131.26 ** | 140.85 | 160.67 |
(35.35) | (36.56) | (59.98) | (58.34) | (65.57) | (64.05) | (100.11) | (102.73) | |
Irrigation service | −70.76 *** | −69.22 *** | −8.72 | −7.61 | −14.14 | −13.43 | −67.97 ** | −64.70 * |
(25.57) | (24.70) | (11.79) | (11.86) | (11.33) | (11.23) | (32.99) | (34.23) | |
Migration service | 7.53 | 6.14 | 37.88 *** | 34.48 ** | 22.94 | 22.49 | 21.21 | 18.41 |
(8.90) | (8.92) | (13.76) | (14.05) | (14.89) | (14.81) | (29.28) | (30.12) | |
Natural disaster | −12.43 | −11.30 | 28.01 | 29.37 | −8.48 | −5.39 | 14.05 | 4.84 |
(12.06) | (12.20) | (22.36) | (22.19) | (9.14) | (8.61) | (42.23) | (40.40) | |
Constant | 133.72 | 182.08 * | −720.14 ** | −237.35 | −67.94 | −96.31 | −514.28 | 451.71 *** |
(135.76) | (93.61) | (296.85) | (166.24) | (123.73) | (118.20) | (517.88) | (142.97) | |
Fixed effect | YES | YES | YES | YES | YES | YES | YES | YES |
Observation | 476 | 476 | 1122 | 1122 | 1099 | 1099 | 499 | 499 |
F test | 2.53 ** | 2.56 ** | 2.78 ** | 2.59 ** | 1.94 * | 1.91 * | 3.34 *** | 3.22 *** |
R squared | 0.076 | 0.087 | 0.083 | 0.089 | 0.081 | 0.089 | 0.088 | 0.073 |
Variable | (1) | (2) | (3) | (4) | (5) | (6) | (7) | (8) | (9) |
---|---|---|---|---|---|---|---|---|---|
Output price support | 630.39 * | 453.31 *** | 106.35 | 299.08 | 206.27 *** | 69.40 | |||
(363.17) | (72.65) | (423.36) | (403.40) | (57.01) | (434.51) | ||||
Agricultural subsidies | 0.98 *** | 0.73 *** | 0.79 | 0.87 ** | 0.65 *** | 0.78 | |||
(0.30) | (0.12) | (0.85) | (0.33) | (0.11) | (0.86) | ||||
Region land rent | −47.66 *** | −46.65 *** | −46.61 *** | ||||||
(13.07) | (12.51) | (12.62) | |||||||
Market return | 1.57 *** | 0.49 *** | 0.60 | 1.29 *** | 0.28 ** | 0.53 | 1.23 *** | 0.23 ** | 0.53 |
(0.47) | (0.15) | (0.37) | (0.41) | (0.13) | (0.36) | (0.41) | (0.11) | (0.36) | |
Market development | 167.09 | 9.15 | 135.09 *** | 157.87 | 2.07 | 136.91 *** | 154.22 | −0.45 | 137.18 *** |
(114.08) | (7.33) | (41.92) | (113.50) | (5.66) | (41.49) | (113.45) | (5.60) | (41.61) | |
Irrigation service | 54.08 | −10.71 ** | 112.64 *** | 56.55 | −8.85 ** | 113.03 *** | 56.76 | −8.71 ** | 112.94 *** |
(36.28) | (4.51) | (38.49) | (36.21) | (3.86) | (38.01) | (36.20) | (3.71) | (38.15) | |
Migration service | 39.37 | −3.02 | 162.56 * | 34.47 | −6.62 | 160.76 * | 35.28 | −6.07 | 160.26 * |
(42.73) | (4.74) | (89.08) | (43.18) | (4.29) | (86.27) | (43.03) | (4.09) | (87.66) | |
Natural disaster | 2.17 | −17.90 *** | 118.34 ** | 5.24 | −15.58 *** | 116.68 ** | 5.65 | −15.30 *** | 116.63 ** |
(17.03) | (5.50) | (49.54) | (16.43) | (4.94) | (48.79) | (16.40) | (4.81) | (48.86) | |
Constant | −1132.33 *** | −432.87 *** | 5681.48 *** | −447.18 ** | 63.03 | 5641.59 *** | −714.94 * | −121.64 * | 5563.52 *** |
(396.16) | (76.76) | (1876.86) | (171.28) | (47.97) | (1568.08) | (423.95) | (71.84) | (1829.37) | |
Fixed effect | YES | YES | NO | YES | YES | NO | YES | YES | NO |
Provincial FE | NO | NO | YES | NO | NO | YES | NO | NO | YES |
Observation | 1598 | 1598 | 798 | 1598 | 1598 | 798 | 1598 | 1598 | 798 |
F test | 4.95 *** | 13.52 *** | 2.78 ** | 7.78 *** | 16.73 *** | 4.99 *** | 6.55 *** | 16.56 *** | 5.76 *** |
R squared | 0.045 | 0.346 | 0.083 | 0.055 | 0.550 | 0.124 | 0.056 | 0.573 | 0.124 |
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Lin, W.; Chen, R. The Capitalization Effect and Its Consequence of Agricultural Support Policies—Based on the Evidence of 800 Villages in China. Sustainability 2021, 13, 7678. https://doi.org/10.3390/su13147678
Lin W, Chen R. The Capitalization Effect and Its Consequence of Agricultural Support Policies—Based on the Evidence of 800 Villages in China. Sustainability. 2021; 13(14):7678. https://doi.org/10.3390/su13147678
Chicago/Turabian StyleLin, Wensheng, and Rongyuan Chen. 2021. "The Capitalization Effect and Its Consequence of Agricultural Support Policies—Based on the Evidence of 800 Villages in China" Sustainability 13, no. 14: 7678. https://doi.org/10.3390/su13147678