Analysis Of Farmland Conversion Marginal Cost In The Pearl River Delta

Farmland is an important foundation for social development. With the continuous development of China’s urbanization and industrialization, the amount of arable land declined fast. A large number of high quality arable land around the city is transformed into construction land, which seriously threatened the food security and sustainable development of our country. The way to solve this problem is to provide a more rational land requisition compensation standards.Firstly, this paper introduces the basic theory of the valuation of agricultural land. Based on farmland externality theory and the theory of sustainable development, the marginal cost of farmland conversion can be divided into marginal internal cost and marginal external cost. And marginal external cost can be divided into five parts. Then this paper uses the method of income approach and market substitution to build indicators for the calculation of five different marginal costs.Secondly, this paper uses this method to calculate the marginal cost of farmland conversion in Pearl River Delta, and then analyzes the calculation results. In2011, the marginal cost of farmland conversion in Pearl River Delta is1002.28Yuan/square meter, the marginal internal cost is126Yuan/square meter, the marginal cost of living allowances247.75Yuan/square meter, the marginal cost of employment guarantee is68.89Yuan/square meter, the marginal cost of food security is554.59Yuan/square meter, the marginal cost of ecological protection is5.04Yuan/square meter. Compared arable land compensation standard with marginal cost of land conversion in2011, this paper founds that the highest land compensation accounts for only9.3%of marginal cost of farmland conversion.Finally, based on the results of above, this paper proposes some policy recommendations.