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Moving off the farm: Land institutions to facilitate structural transformation and agricultural productivity growth in China

Author:	Deininger, Klaus; Jin, Songqing; Xia, Fang;	Collection Title:	Policy Research working paper ; no. WPS 5949
Country:	China;	Date Stored:	2012/01/17
Document Date:	2012/01/01	Document Type:	Policy Research Working Paper
Language:	English	Major Sector:	Public Administration, Law, and Justice; Agriculture, fishing, and forestry; Finance
Rel. Proj ID:	1W-Land Policies For Growth And Poverty Reduction: Moving Towards -- -- P095390;	Region:	East Asia and Pacific
Report Number:	WPS5949	Sub Sectors:	General agriculture, fishing and forestry sector; General public administration sector; Housing finance
SubTopics:	Economic Theory & Research; Rural Poverty Reduction; Labor Policies; Economic Growth; Rural Development Knowledge & Information Systems	TF No/Name:	TF095610-Computerization; TF096734-Impact Evaluation of Land Tenure Regularization in Rwanda; TF097647-India Gendered impacts of NREGA; TF098730-BNPP-GENDER; TF092028-GENDER; TF091533-GENDER; TF091531-GENDER; TF092663-EVALUATING THE EFFECTIVENESS OF SUSTAINABLE LAND MANAGEMENT INTERVENTIO; TF098469-New Approaches to securing land tenure in Sub-Saharan Africa
Volume No:	1 of 1

Summary: Agriculture has made major contributions to China's economic growth and poverty reduction, but the literature has rarely focused on the institutional factors that might underpin such structural transformation and productivity. This paper aims to fill that gap. Drawing on an 8-year panel of 1,200 households in six key provinces, it explores the impact of government land reallocations and formal land-use certificates on agricultural productivity growth, as well as the likelihood of households to exit from agriculture or send family members to the non-farm sector. It finds that land tenure insecurity, measured by the history of past land reallocations, discourages households from quitting agriculture. The recognition of land rights through formal certificates encourages the temporary migration of rural labor. Both factors have a large impact on productivity (at about 30 percent each), mainly by encouraging market-based land transfers. A sustained increase in non-agricultural opportunities will likely reinforce the importance of secure land tenure, which is a precondition for successful structural transformation and continued economic attractiveness of rural areas.


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