Reforming land mortgages in rural China and the incentives for application of environment-friendly formula fertilizers on farm
ISSN: 0002-1466
Article publication date: 18 December 2019
Issue publication date: 29 September 2021
Abstract
Purpose
From the perspective of land mortgages, the purpose of this paper is to understand how farmers can be motivated to utilize environment-friendly formula fertilizers, thereby reducing the use of chemical fertilizers.
Design/methodology/approach
Two hypotheses are empirically tested using questionnaire responses from 714 farmers across three provinces in China to establish the relationship and to determine the role land rent plays.
Findings
This study finds that farmers who obtain land mortgages will be more willing to apply formula fertilizers in order to obtain higher value of their “own” land. This is because obtaining land mortgages can be considered as the process of titling land management rights. Farmers who have been transferred the land by verbal agreement no longer need to worry about losing it at any time. Hence, they are willing to apply formula fertilizers on their transferred land. Similarly, farmers who have been transferred the land by written contract to obtain more land mortgages will also be willing because the formula fertilizers can not only improve the quality of their transferred land, but also increase its value as collateral. This mechanism is clearer in the area where the average land rent is relatively lower.
Originality/value
No study has yet linked the reform of land mortgages to environmentally friendly behavior. While other studies have focused on the way access to credit changes farmer investments and spending, this particular relationship has not yet been formalized, giving this study theoretical and empirical significance.
Keywords
Acknowledgements
This study is sponsored by the National Natural Science Foundation of China (71773052, 71773053, 71803083); the Fundamental Research Funds for the Central Universities (KJQN201955); the China Postdoctoral Science Foundation (2018M632322); A Project Funded by the Priority Academic Program Development of Jiangsu Higher Education Institutions (PAPD).
Citation
Peng, P. and Zhou, L. (2021), "Reforming land mortgages in rural China and the incentives for application of environment-friendly formula fertilizers on farm", Agricultural Finance Review, Vol. 81 No. 5, pp. 617-635. https://doi.org/10.1108/AFR-03-2019-0026
Publisher
:Emerald Publishing Limited
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