The Cause Of Rural Land Circulation And Its Welfare Effects

Since the late1990s, with the acceleration of urbanization and industrialization, and with the rapid development of services, the labors of the agricultural sector start massively shifting to the non-farm business sector. There are discontinue farming and let go out of cultivation in China’s rural area, we implement the average distribution of rural land in China that causing the land decentralized operation, this mode cannot be accustomed to modern agricultural development which need large scale、market and information. Therefore, we need to reform existing farmland’s system and reallocate land to get over the growing efficiency of agricultural and the welfare loss of farmers. The average allocation of farmland by government administrative cannot play to the efficiency of the rural labor force, and cannot enhance the production efficiency by scale management; to some extent it is also to hinder the development of agriculture. In the case of administrative means can’t efficiently allocate land, farmers select configuration of land resources by rational thinking, rural land circulation as a kind of new system comes into being.It is obvious that system influences on the economic efficiency. Institutional change can be understood that a more efficient system replaces to benefit lower system, individual and group propose by themselves when they can able to profit. The cause of institutional change is the main body of institutional change on the benefits of institutional change. The same as land circulation system, it is that the farmers pursue the interests of new system; it can provide revenue to both sides by land circulation. As the marketization of agriculture, the limitation of Household-responsibility system is gradually revealed. Household-responsibility system is no problem, but there are small and land finely disadvantages. Being different from the traditional institutional change, Land Transfer is not to replace Household-responsibility system; it is just to change all kinds of system within Household-responsibility system that improving the level of household welfare and land’s efficiency. Farmers advocate spontaneously rural land circulation, but the land circulation has political and need support from the state, the government decides the direction of the land circulation and plays an indispensable role in the formulation of land circulation system. The government’s attitude for land circulation is from the initial denial, pressing to gradually accepting, acquiescence and support, finally to promoting. Rural land circulation is in favor of agricultural structure adjustment, and we can achieve agricultural management of scale and enhance the land utilization efficiency, land circulation is the key to the issues concerning agriculture. Rural land circulation can promote rural productivity development, and increase farmers’ income, and reduce rural poverty.It depends on income of land circulation whether to participate in the transfer. If the effect of land circulation (including roll-in and roll-out) is more than the effect of non-circulation, farmers adopt land circulation. This paper explains the reason of land circulation by supply and demand theory of institutional change; then this paper adopts Propensity Score Matching Methods and makes use of the data of5814rural families of China Family Panel Studies which is collected from in21provinces in2010and2012, to identify the factors of land circulation, and assess the welfare effects; Basing on the matching sample, we analysis agricultural policy mechanism under different production style; The conclusion is given and the relevant policy recommendations at last.The empirical results show that mainly non-agricultural income of farmers have outward transferring willingness and predominantly agricultural income of farmers have inward transferring willingness, combination produced a demand for land circulation system, and eventually land circulation, it needs support from the state. In land circulation, the head of the household, family and village characteristic will affect the circulation flow behavior of farmers. The roll-in land and the roll-out land would be increase farmers income levels and reduce rural poverty. Farmers of different production methods, the influence factors of income is also different, such as education, macro economic environment, the. geographical position, etc. According to above conclusion, countries should promote the reform of rural education, encourage the combination of land system reform and the financial sector and establishing and perfecting the land circulation market.