An analysis of the effect of farmland transfer subsidy policy: from the perspectives of crowding-out effect, government rent-creation and objective deviation
【Abstract】The implementation of subsidy policy to promote farmland transfer and operation scales in agriculture is of wide concern in the urbanization process. After reviewing the relevant literature on the formation of farmland transfer subsidy policy in China and international experience, this article summarizes the main contents and short-term positive effects of farmland transfer subsidy policy in China. It carries out a theoretical analysis of some negative effects induced by the implementation of farmland transfer subsidy policy, and verifies the crowding-out effect of farmland transfer subsidy policy on small and medium-sized business entities by establishing an econometric model using the survey data. The study shows that, concomitant with short-term positive effects in the implementation of farmland transfer subsidy policy, some negative effects are inevitable. The policy implementation leads to transfer premium that is beneficial to the outflow party for rent seeking, produces a crowding-out effect on small and medium-sized business entities and self-crowding in transfer transactions on large-scale business entities, and becomes club products, causing a social welfare loss and a failure to achieve social consensus. In addition, the farmland transfer subsidy policy would facilitate a negative incentive to maintain land productivity and make transfer subjects keen on the epitaxial development model of scale expansion, which is neither conducive to the stable and orderly development of operation scales in agriculture, nor to the protection and maintenance of national food security. Long-term policy supports to promote the development of operation scales in agriculture would still need to be explored.
【Keywords】 farmland transfer; subsidy policy; crowding-out effect; government rent-creation;
(Translated by LI Mengling)
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