Farmland Rental and Productivity of Wheat and Maize: An Empirical Study in Gansu, China

The rapid growth of farmland rental markets in China raises questions about the association of farmland rental and agricultural productivity. Although this issue has been extensively studied, the majority of studies have focused on yields and technical efficiency, with input use and cost efficiency receiving little attention. This study aimed to determine the statistical association of wheat and maize farmers’ farmland rental behaviors (renting land, not renting land and renting out land) and input use, and the consequent association of farmers’ farmland rental behaviors and cost efficiency. For this purpose, the linear regression model and stochastic frontier model were employed, based on a survey data of 419 wheat and maize farmers in 25 villages in five counties of Gansu Province, China. The study found that farmland rental enhanced productivity and sustainability of agriculture through transferring farmland from households with less productivity to those with high productivity, and it was also helpful to reducing the consumption of fertilizers and chemicals in agricultural production. The results suggest that replacing labor with machines is an important way to reduce production costs, and households specializing in agricultural production use more rational amounts of fertilizers and chemicals than those with low productivity. Thus, the machinery purchase policy in China should continue to give great benefit to farmers. In addition, the machinery purchase subsidization policy has achieved satisfactory results in China, and it could be a good reference for other developing countries. However, some efficiency loss was found in households that rented out their land, and policy makers need to pay some attention to these households.