IRTG 1070: SP 3.3 Property rights and access to credit, inputs and agricultural knowledge in the North China Plain: implications for technical efficiency, sectoral change, and rural income inequality

Agricultural and rural development policies as well as formal and informal institutional arrangements concerning farmers’ access to land, capital, agricultural knowledge, and agricultural inputs influence the intra-sectoral changes of agriculture in the North China Plain. The general objective of the subproject is to analyze the determinants of the change in the number and types of farms over time and the implications of the observed lack of structural change in the farming sector on sustainability in its three dimensions. The central hypothesis is that the transition from the current unsustainable high-input, low-output part-time smallholder agriculture to a more efficient commercially oriented full-time agriculture is hindered by a range of policies and institutional arrangements. Especially for part-time farm households in Hebei province which derive their major share of total household income from rural non-farm sources as well as from migration of household members to urban areas, we hypothesize that land ‘possession’ and related ‘farming’ is mainly motivated by subsistence and old-age security motives and as a strategy to diversify incomes out of agriculture.

We apply methodological features from innovative recent micro-economic policy studies. Different types of households are classified along the continuum of increasing dependence on agriculture as a source of livelihood, using secondary panel from the Research Center for Rural Economy (RCRE). Further we use the data to estimate econometric models to explain fertilizer use/ demand by farm households (Probit and Tobit models), technical efficiency in grain production (Stochastic Frontier Analysis) and cropping shares, yield levels and land cultivated (simultaneous-equation models). Cooperation with the National Bureau of Statistics (NBS) is planned regarding the analysis of data from the Rural Household Survey of the NBS which includes more detailed information on off-farm income sources compared to RCRE, among other topics.  We will conduct qualitative interviews with local administrative officials, farmers, extension officers and input suppliers to gain valuable insight into perceptions, aspirations, and expectations of institutional stakeholders regarding the structure, conduct and performance of fertilizer market and agricultural extension.