Agricultural production in rural China has long been constrained by small-scale and fragmented land holdings. More than 60 percent of farms were cultivated by smallholders with farms less than 0.5 hectare. Given the fact that well-functioning land rental markets have the potential to effectively alleviate rural poverty and facilitate the rural structural transformation, policy promoting land consolidation and larger-scale farm operations through more active land rental market participation has been put forward in recent years in China. However, the progress has been rather uneven across regions and much of the arable land is still maintained in the operation of smallholders nowadays.

Upon the preceding background, researchers were motivated by the question that, beyond external factors such as socio-demographic and institutional factors, if psychological traits might also be fundamental factors explaining rural smallholders’ land renting decisions. Based on a rural survey of 2119 households from the North China Plain, researcher conceptualized the links between personality traits and smallholders’ renting behavior and empirically estimated this impact. The findings suggest that smallholders with a relatively high level of openness participated more in the farmland rental market. Internal locus of control was found to play a significant role in explaining smallholders’ land renting-in decisions. Researchers further showed that the effect of internal locus of control was mediated through the smallholders’ need for achievement, indicating that fostering higher levels of internal locus of control—and subsequently achievement desire—could play a significant positive role in promoting smallholders’ land renting behavior. In conclusion, the result reveals the fact that personality traits can indeed influence smallholders’ entering into land markets.

There is no doubt that releasing external constraints is still playing a central role for the development of rural land rental markets. Nevertheless, as researchers have found in this study that there are also “psychological hurdles” of entering into land rental markets, reducing external constraints alone (i.e. institutional transaction costs) may not straight forwardly and immediately translate into greater market participation. In the future, policy makers aiming to identify appropriate rural households that have potentials for the scale-farm operation may take their personality traits into full consideration.

Supported by ASTIP program of CAAS (No. CAAS-ASTIP-IAED-2020-06), the article entitled Effect of personality traits on smallholders’ land renting behavior: Theory and evidence from the North China Plain completed by the Innovation Group of International Agricultural Economics and Trade at Institute of Agricultural Economics and Development of CAAS was published in the China Economic Review (5-year if = 3.372).

More details can be found at the link below:

http://doi.org/10.1016/j.chieco.2020.101510

By Qian Chen (chen.qian@wur.nl)