Influences of the Transaction Intention of Farmland Transfer under Information Asymmetry: An Empirical Study of 1100 Questionnaires from China

Abstract

The original intention of the tripartite rural land entitlement system was to activate farmland management rights and improve the efficiency of land element allocation. However, information asymmetry is prevalent in a market with imperfect competition. We analyzed the key factors affecting farmland transfer transactions with the structural equation model using survey data from farmers in five major grain-producing counties in Henan province, China. The purpose of our study was to investigate how these factors contribute to the avoidance of a “lemon market” emerging in farmland transfer and can promote the market regulation of farmland transfer operations. This study was conducted under the framework of asymmetric theory analysis with the purpose of discussing the fundamental forces driving farmland transfer transactions. The results show that (1) the economic characteristics of farmers play an important role in the formation of farmland transfer transactions, and their impacts on the willingness to transfer farmland in and out were 0.69 and 0.97, respectively; and (2) among the observable variables, the satisfaction degree of agricultural technology training and the proportion of non-agricultural income had a strong ability to explain the choice of farmland transfer behavior, and the factors that strongly impacted farmland transfer out behavior were physical condition and farmland quality. Thus, we recommend establishing a detailed land transfer pricing system based on the background quality of farmland and increasing the agricultural science and technology education, focusing on dredging information transmission channels to fulfill the new requirements of the three-right separation system on the government’s supervision of farmland transfer to promote effective links between small-scale peasant economies and modern agriculture.