Abstract
Farmland transfer-out is essentially a process of the rural land resource allocation, and it is also of great importance to farmers’ poverty alleviation. The practice of farmland transfer-out in China is generally manifested as farmland expropriation and farmland lease. Based on the survey data of 832 poverty counties in China, this paper empirically analyzed the effects of farmland lease and expropriation on poverty alleviation. The results showed that farmland expropriation and lease in poverty areas could increase farmers’ household income and poverty alleviation, and this conclusion was still valid after instrumental variable estimation and robustness test. Moreover, farmland expropriation significantly promoted the growth of entrepreneurship income and the decrease of farm income, but did not significantly impact non-farm income. However, farmland lease significantly promoted the growth of entrepreneurial income and non-farm income, but was negatively correlated with farm income. It should be noted that farmers’ entrepreneurship strengthened the positive role of farmland expropriation on poverty alleviation, while it did not play a significant role in the relationship between farmland lease and poverty alleviation. Further research showed that the farmland expropriation and lease in poverty areas improved individual well-being through poverty alleviation, and the farmers’ entrepreneurship in poverty areas strengthened this positive effect. This study provides empirical evidence for farmers in poverty areas to achieve poverty alleviation and improve individual subjective well-being through farmland transfer-out.
1. Introduction
Common prosperity is an important developmental objective of Chinese modernization. To achieve common prosperity, China has employed various means to alleviate poverty in poverty areas (Si et al., 2017). China’s poverty governance has gone through five stages: small-scale relief, institutional reform, large-scale development, village-level poverty alleviation, and targeted poverty alleviation. The way of poverty alleviation has transformed from “blood transfusion” to “independent hematopoiesis”, and the target has transformed from “regions” to “rural households”. In 2020, China achieved a comprehensive victory in the battle against poverty as scheduled, that is, under the current standard, all 98.99 million rural poor people, 128 000 villages and 832 counties had been lifted out of poverty.1 However, this achievement does not indicate the end of poverty alleviation, i.e., poverty alleviation at a specific time point does not mean permanent poverty alleviation. Some poor people are at risk of falling back into poverty due to a number of factors. According to a survey, nearly 2 million people who have been lifted out of poverty are at risk of falling back into poverty, and nearly 3 million people are at risk of poverty.2 If there is no sustained and stable source of income, there is a high risk that those who have escaped poverty will fall back into poverty. Therefore, it is still necessary to pay great attention to increasing the income of households lifted out of poverty in poverty areas, and to explore a path of long-term poverty alleviation. In the process of achieving common prosperity, how to make poverty alleviation sustainable, enhance the independent developmental capacity of poverty-alleviated areas and people, and realize the rural revitalization, has become an important issue worthy of attention.
Farmland is the most important livelihood asset of rural households in poverty areas. Farmland transfer is a good way for poverty alleviation by combining large-scale planting. With the transformation of agricultural production mode and the increase in capital and technical input, large-scale and intensive agricultural production can be realized, which can improve agricultural benefits. Farmland transfer has many potential benefits, such as achieving large-scale agricultural production by integrating fragmented cultivated land, promoting non-farm employment, increasing crop yield, and improving the mobility of rural households (Deininger et al., 2009; Qiu et al., 2023; Zhang et al., 2022). Many scholars also believe that farmland transfer can promote the allocation of land and labor resources from the production sector with low marginal productivity to the production sector with high marginal productivity, thereby increasing the income of rural households and alleviating rural poverty (Benjamin, 1992; Scoones, 1998). According to the statistics of the Ministry of Agriculture and Rural Affairs of the People’s Republic of China, as of 2020, the area of transferred farmlands in China exceeded 37 million ha,3 accounting for more than 25% of China’s total area of cultivated land. However, compared with other countries, it is still at a low level, with problems such as insufficient vitality and small scales (Chen and Zhai, 2015).
The realization of farmland transfer depends on sufficient farmland supply and demand. Existing evidence shows that the lack of sufficient farmland supply is the primary factor that inhibit farmland transfer, so it is necessary to pay attention to farmland owners and their livelihood strategies after farmland transfer-out. The idea that farmland transfer-out can increase farmers’ income and reduce poverty has been verified by many scholars (Jin and Deininger, 2009; Jin and Jayne, 2013; Ravallion and van de Walle, 2008). However, there is a view that after farmland transfer-out, farmers face livelihood risks such as employment difficulties, weakened social relations, and rising living costs, and may fall into the dilemma of survival and development, which is not conducive to alleviating poverty (Albertus, 2023). It can be seen that there is still no conclusion on whether the farmland transfer-out in poverty areas is conducive to alleviating poverty. Therefore, in-depth exploration is needed.
By farmland transfer-out, farmers can get property income, which is conducive to increasing the income. Further, by relaxing the household financial constraints, farmland transfer-out can increase the investment capacity in household entrepreneurship, thus promoting farmers’ entrepreneurship (Falkinger and Grossmann, 2013). For farmers in poverty areas, the income from farmland transfer-out provides a certain amount of start-up capital for farmers’ entrepreneurship, and the social, political, economic, and cultural networks attached to land resources have also played a crucial role in farmers’ entrepreneurship (Scheyvens et al., 2017). Therefore, when interpreting the effect of farmland transfer-out on poverty alleviation in poverty areas, we should consider the unique entrepreneurial behavior of farmers in this context. Farmers’ entrepreneurship is not only one of the important means of poverty alleviation, but also an important factor considered when making decisions about farmland transfer. However, few studies have included farmers’ entrepreneurship in the theoretical framework of the effect of farmland transfer on poverty alleviation. In view of this, this study used the data of 832 poverty counties obtained from a survey to focus on the relationship between farmers’ farmland transfer and poverty alleviation in poverty areas, and analyzed the role of farmers’ entrepreneurship. The contributions of this study are as follows.
Firstly, this study focused on the samples from poverty counties in China and explored the poverty alleviation effect of farmland transfer-out. This not only verified the poverty alleviation in China, but also improved the pertinence of the research on the effect of farmland transfer-out on poverty alleviation. One of the reasons for the conflicting views on the effect of farmland transfer-out on poverty alleviation in poverty areas in previous studies is the lack of consideration of the institutional contexts of different regions, such as cultural, social, political, and economic backgrounds. Based on this, this study used a recent and representative set of data to focus on the effect of farmland transfer-out on poverty alleviation in poverty areas under the framework of socialism with Chinese characteristics. This study will not only help to tell China’s story to the world, but also help to provide Chinese experience for other countries and regions to get rid of poverty.
Secondly, this study incorporated farmers’ entrepreneurship into the research framework of the effect of farmland transfer-out on poverty alleviation in poverty areas, and expanded the boundary conditions of the relationship between farmland transfer-out and poverty alleviation. Farmers’ entrepreneurship in poverty areas is a special phenomenon affected by various factors, and it is also an effective way to increase the income of farmers in poverty areas, playing a special role that cannot be ignored in the poverty alleviation. However, it is rarely included in previous studies. In view of this, this study included farmers’ entrepreneurship into the research framework to explore the effect of farmers’ entrepreneurship on the relationship between farmland transfer-out and poverty alleviation in poverty areas. This not only strengthens the research of promoting rural common prosperity in poverty areas through farmers’ entrepreneurship, but also enlarges the research scope of entrepreneurship.
Thirdly, this study interpreted the impact of the poverty alleviation effect of farmland transfer-out on individual well-being in poverty areas, and studied the contingency effect of farmers’ entrepreneurship on individual sense of gain. This improves the research model of the sense of well-being of the poor. Many previous studies (Bertram et al., 2021; Issahaku and Abdulai, 2020; Kühling et al., 2022; Kumar et al., 2021; Oduniyi and Tekana, 2021; van Landeghem et al., 2013) have analyzed the impact of land use right change on the well-being of rural residents, but they have not yet given an answer to whether the improvement of income means the improvement of the well-being of the poor. This study further explored the transmission effect of poverty alleviation on the relationship between farmland transfer-out and well-being in poverty areas, and the positive effect of entrepreneurship on poverty alleviation and the well-being of the poor. Besides, this study also provided a guidance for rural households in poverty areas to achieve spiritual common prosperity.
2. Literature review and research hypothesis
2.1 Literature review
The effect of farmland transfer on poverty alleviation and income increase have been widely empirically verified and supported by numerous scholars worldwide, However, farmland transfer can be divided into farmland transfer-in and farmland transfer-out. Can farmland transfer-out achieve poverty alleviation? There are three main views.
Firstly, farmland transfer-out can effectively alleviate poverty. A good farmland transfer market can reduce the transaction costs to a certain extent, improve the farmland use efficiency, and balance income distribution (Deininger, 2003). Therefore, farmland transfer-out has be seen as an important way to allocate land resources. With the continuous development of the transfer-out market, the asset value of farmland has been continuously manifested (Fan et al., 2020), which ultimately increases the land property income of farmers. Besides, farmland transfer-out increases household income by promoting the employment of rural labors (Jin and Deininger, 2009; Li et al., 2012). Farmers’ income growth is the basic condition for poverty alleviation (Ge and Lei, 2013), therefore, poor farmers can alleviate their poverty to a certain extent by farmland transfer-out (Jiang, 2018). In addition, the non-farm income by employment induced by farmland transfer-out enables farmers to invest in agricultural machinery, increases the collateralizable assets, and thereby improves the availability of credit to farmers. This alleviates the financing constraints on agricultural production, promotes the increase of farmers’ income, and ultimately alleviates poverty (Randazzo and Piracha, 2019).
Secondly, farmland transfer-out has led to an increase in poverty. Due to the constraints of credit rationing, it is difficult for the rural poor to obtain stable income from farmland transfer-out (Carter and Olinto, 2003), which leads to the loss of the leveling effect of farmland transfer-out on marginal revenue and the income increase effect. This sacrifices the interests of small farmers, increases the inequality of land resource allocation, and widens the income gap between the rich and the poor (Li et al., 2023), which is not conducive to rural poverty alleviation. When exploring the impact of farmland transfer-out on farmers’ livelihood capital, some scholars have found that farmland transfer-out reduces farmers’ natural capital and social capital (Chang and Liu, 2018). To survive after farmland transfer-out, some farmers choose to get non-farm employment in their hometowns, and in the process, they intentionally or unintentionally establish a new urban social relationship that is different from the rural ones (Ye and Zhou, 2010). This weak relationship network affects the livelihood activities of farmers, which may widen the income gap (Brauw and Mueller, 2012). Moreover, this livelihood risk can reduce the level of old-age security, social connection, and mental health of farmers, leading to a deterioration of welfare (Zhang and Xie, 2019), and exacerbating rural poverty (Chinn, 1979).
Thirdly, there is uncertainty about the effect of farmland transfer-out on poverty alleviation. The process of farmland transfer-out is systematic, complex, and heterogeneous, and the rent brought by it is not stable and long-term, but is affected by a variety of factors (Liu and Zhang, 2014). Some scholars have found that the effect of farmland transfer-out on income is affected by the rationality of farmers. Paying attention to the economic value and the contract of farmland transfer-out can help farmers increase their incomes, while collective rationality has an inhibitory effect (Ali et al., 2020). In addition, farmland transfer-out sometimes does not effectively stimulate agricultural investment and increase farmers’ non-farm employment (Peng and Wu, 2009), and short-term farmland transfer-out has no significant impact on increasing rural surplus labor for non-farm employment and income increase (Tian and Li, 2014). Therefore, there is uncertainty about the effect of farmland transfer-out on poverty alleviation.
In general, there are a lot of studies on the effect of farmland transfer-out on the causes, forms, and sizes of poverty alleviation, but whether farmland transfer-out in poverty areas is conducive to poverty alleviation is still inconclusive. Therefore, it is necessary to further clarify the relationship between farmland transfer-out and poverty alleviation in poverty areas. Moreover, there is still a lack of sufficient evidence on how the various economic and social factors by which farmland transfer-out affects poverty alleviation interact with each other. Our survey found that the income of rural households could be divided into entrepreneurial income, non-farm income, and farm income, and this study intended to analyze each income to clarify the internal mechanism of the effect of farmland transfer-out on poverty alleviation. In addition, considering the poor development conditions, poor infrastructure, and lack of supporting services in poverty areas, scholars have begun to consider entrepreneurship as a solution to poverty (Bruton et al., 2013; Najafizada and Cohen, 2017; Ribeiro-Soriano, 2017), and believe that entrepreneurial activities are not only an important factor in promoting local economic growth (Acs and Storey, 2004), but also an important tool to alleviate poverty (McMullen, 2011; Si et al., 2015). Moreover, since the reform and opening up, China has carried out a series of institutional reforms and innovations with Chinese characteristics, which has yielded many entrepreneurs with innovative and exploratory capacity. This provides rich materials for in-depth analysis of entrepreneurship in poverty areas. However, the existing studies ignore the important role of farmers’ entrepreneurship in the relationship between poverty alleviation and farmland transfer-out in Chinese poverty areas. Based on this, this study incorporated farmers’ entrepreneurship into the research framework to clarify the impact of farmland transfer-out on poverty alleviation in poverty areas, and the role of farmers’ entrepreneurship.
2.2 Research hypotheses
2.2.1 Impact of farmland transfer-out on poverty alleviation in poverty areas
Farmland transfer-out is essentially a process of reallocation of rural land resources, which reflects farmers’ transformation from livelihood rationality and risk rationality to economic rationality. Most of China’s poverty areas are located in mountainous areas, with poor transportation connection, no tap-water and electricity supply, poor infrastructure, and low level of industrial development. Besides, these areas often face serious financial constraints, and lack financial services, which in turn affects the development of local industries (Li, 2010). However, rural households in poverty areas can independently choose different forms of farmland transfer-out in the imperfect rural factor market based on their livelihood capital endowment, to obtain economic income and reduce external risks.
In practice, farmland transfer-out generally includes farmland expropriation and farmland lease. For rational small farmers, behind the farmland expropriation must be hidden the farmers’ accurate calculation of the benefits and costs. There are resource constraints and factor shortages in poverty areas (Frankish et al., 2014), and poor groups generally have few ways to obtain financial resources (Rhyne and Otero, 1992), so rural households in poverty areas always wait for government land expropriation, to obtain high income. Stijns (2005) argued that land endowment led to a decline in farmers’ income, because the abundant lands led the rural economy to the direction of primary processing and agricultural exports, rather than the introduction of agricultural resources to high value-added industries. This resulted in a low growth rate of the rural economy, which is not conducive to increasing farmers’ income. In this sense, farmland expropriation reduces dependence on land endowments, and farmers in poverty areas can join in high value-added industries, which is conducive to income growth. In addition, farmers in poverty areas can obtain non-farm employment after farmland expropriation, which can further increase their incomes. In view of this, the following hypothesis is proposed:
H1a: Farmland expropriation has a positive effect on poverty alleviation and can increase the income of the poor.
Farmland is an important property of most farmers in poverty areas, and the income from farmland management directly affects the speed and quality of poverty alleviation. On the one hand, farmers can obtain stable rents through farmland transfer-out, or convert the land into shares to become shareholders of new agricultural business entities (these entities are fully responsible for the production and operation activities of farmland). In addition, farmland ownership fragmentation is common in poverty areas, leading to a low agricultural production efficiency. After the farmland is leased, benefiting from the rents, the income of farmers increases steadily. On the other hand, farmland transfer-out can release the labor forces and other productive resources from agricultural production, increasing the wage income of farmers, and improving farmers’ ability to withstand risks (i.e., farmland lease can avoid the negative impacts of natural disasters and price fluctuations, and reduce the probability of falling into poverty). Therefore, the following hypothesis is proposed:
H1b: Farmland lease has a positive effect on poverty alleviation and can increase the income of the poor.
2.2.2 Moderating role of farmers’ entrepreneurship in poverty areas
A large number of studies have shown that labor mobility and non-farm employment can effectively alleviate income inequality and poverty in rural areas (Ba et al., 2021; Boss et al., 2022; Hathaway and Perkins, 1968). Farmland lease and expropriation can free farmers in poverty areas and realize labor mobility and non-farm employment. As a livelihood strategy actively or passively chosen by farmers who have leased their farmlands to others in poverty areas, entrepreneurship affects all aspects of rural society and economy in China’s poverty areas. Especially, in the process of China’s poverty alleviation, farmers’ entrepreneurship not only helps rural individuals and organizations get rid of resource constraints, but also increases income and employment. This drives the development of the rural economy, and creates a new way for the industrialization, agricultural modernization, urbanization, and rural revitalization. When farmers in poverty areas choose to start a business, they can get rid of their dependence on land, which promotes farmland expropriation and lease. Besides, the compensation from farmland expropriation and the rents from farmland lease can become entrepreneurial capitals. This increases the income of farmers. In addition, the increase in entrepreneurship will not only drive the surrounding people to start their own businesses, but also create new employment opportunities, which drives the surrounding people to get rid of poverty and become rich, thus strengthening the positive role of farmers’ entrepreneurship in the relationship between farmland transfer-out and poverty alleviation. In reality, even if farmland transfer-out can bring a certain amount of rents or compensations, farmers are often reluctant to lease and expropriate farmland due to the fear of losing their lands. In the long run, a poverty culture of “inhibition on progression” is formed. Under the influence of this negative culture, poor farmers are prone to poverty psychology such as helplessness, low self-esteem, and a sense of shame (Lewis, 1959). They even numbly attribute their poverty to fate and lose their intrinsic motivation to get out of poverty, which in turn reduces the endogenous motivation to get out of poverty through entrepreneurial activities (Mickelson and Williams, 2008). It is also worth noting that the poor resource endowment and institutional environment of poverty areas often restrict the positive effect of entrepreneurship on poverty alleviation, so that entrepreneurial activities in poverty areas cannot eradicate poverty (Alvarez and Barney, 2014; Alvarez et al., 2015; Yanya, 2012).
In view of this, the following hypotheses are proposed:
H2a: Farmers’ entrepreneurship in poverty areas strengthens the positive effect of farmland expropriation on poverty alleviation, that is, the more farmers in poverty areas choose to start a businesses, the stronger the positive effect of farmland expropriation on poverty alleviation.
H2b: Farmers’ entrepreneurship in poverty areas strengthens the positive effect of farmland lease on poverty alleviation, that is, the more farmers in poverty areas choose to start a business, the stronger the positive effect of farmland lease on poverty alleviation.
2.2.3 Logic of the positive effect of farmland transfer-out on poverty alleviation
Income increase from multiple sources is a necessary for the poverty alleviation in poverty areas, and farmland expropriation and lease is closely related to income increase. According to the survey, farmers’ income in poverty areas can be classified into three classes: entrepreneurial income, non-farm income, and farm income. Entrepreneurial income refers to the income obtained from entrepreneurial activities. Non-farm income refers to the income of farmers who go out to work and get employment in non-agricultural industries. Farm income refers to the income obtained from agricultural activities. This study focused on the impact of farmland expropriation and lease on entrepreneurial income, non-farm income, and farm income, to comprehensively reveal the mechanism by which farmland transfer-out impacts farmers’ incomes, and find an effective way to help farmers get rid of poverty in poverty areas. Scholars believe that financial services are the most common ways to promote entrepreneurship among the poor (Kunal, 2013). Only with financial support can the entrepreneurial enthusiasm of poor groups be effectively stimulated (Premchander, 2003), the credit constraints be reduced, the quality of entrepreneurship be improved, and the income by entrepreneurship be increased. Secondly, the peasants in poverty areas who have leased their farmland usually have weak agricultural production and management capacity. Due to the lost or reduction of farmland, the farm income also reduces. At the same time, some labor forces are released from agricultural production to non-agricultural activities, bringing about an increase in non-farm income. However, many scholars believe that the poor group is conservative and short-sighted, and has low levels of skill and education (Baxter, 2014). Therefore, they are prone to enjoy leisure and not willing to work, until they spend all the obtained income from farmland transfer-out, that is, they can not obtain non-farm income through labor.
Based on this, the following hypothesis is proposed:
H3: Farmland expropriation and lease have a positive impact on entrepreneurial income, a negative impact on farm income, and an uncertain impact on non-farm income.
In summary, the relationship between farmland transfer-out and poverty alleviation in poverty areas is complex. To this end, a conceptual model is established (Figure 1).
Conceptual model of the relationship between farmland transfer-out and poverty alleviation.
Citation: International Food and Agribusiness Management Review 27, 5 (2024) ; 10.22434/ifamr1119
3. Research design
3.1 Data source
The data used in this research were from the “Survey of 1000 Villages in China” conducted in 2016. The “Survey of 1000 Villages in China” project launched in 2008 aims to gain a deep understanding of China’s “Three Rural Issues” through social research. The theme of the 2016 is “Survey on the Rural Entrepreneurship in China”. More than 30 000 questionnaires were obtained in this survey, including 1208 questionnaires from village heads/branch secretaries, 9533 questionnaires from non-entrepreneurs and 4600 questionnaires from entrepreneurs. The data are suitable for the research for three reasons. Firstly, the database provides representative information about the village governance environment, business environment, rural entrepreneurs’ entrepreneurial characteristics, and entrepreneurial motivation in China. Secondly, the purpose of the survey is not to explore the impact of farmland transfer-out, but to gather information on the current state of entrepreneurship in rural China. Therefore, in questionnaire collection, the bias caused by the induction of interviewers is avoided. Thirdly, the interviewees of this survey include town mayors, village cadres, villagers, etc., which helps to capture the information of farmland transfer-out from different perspectives, and can overcome the problem of homology-induced bias to a certain extent. In addition, it was also found that there was no significant difference between the samples and the whole country through the t-test, indicating that the survey villages were well representative.4
The data in this study were mainly from the questionnaires of the village heads and villagers, and the entrepreneurs and non-entrepreneurs in 832 national-level poverty counties were selected as the research sample. This research mainly studied the poverty alleviation effect of farmland transfer in poverty areas, in essence, this study measured the difference in poverty alleviation between rural households with farmland transfer-out and rural households without farmland transfer-out. However, farmland transfer is two-way. Some farmers transfer out farmland at the same time as transferring in farmland, and some farmers only transfer in farmland. Therefore, this study excluded the samples with farmland transfer-in, and then matched with some variables in the village heads’ questionnaires. Finally, 2267 samples were obtained.
3.2 Variables
3.2.1 Dependent variable
In this research, poverty alleviation (PA) was selected as the dependent variable. According to previous studies, poverty is defined as a state in which the income level is insufficient to obtain the minimum necessities necessary for the proper functioning of the body, or a state in which a family is unable to meet the minimum standard of living due to insufficient income (Rowntree, 1901). It can be seen that income level is highly correlated with poverty level. Income can be used as a proxy variable to measure poverty level. In view of this, this study used the household income to measure poverty alleviation. The higher the household income, the more obvious the poverty alleviation. In the questionnaire for 1000 villages, the question “What is the average annual household income in the past three years? (Unit: 10 000 RMB yuan)” was used to measure the income of rural households. In addition, according to the results of the survey, the average annual household income in the past three years included three parts: entrepreneurial income (EI), non-farm income (NFI) and farm income (FI). The variable Entrepreneurial Income in the questionnaire was used to measure the financial performance of farmers’ entrepreneurship. The variable Non-farm Income in the questionnaire was used to measure the part-time income and wage income of rural households in addition to farm income. The variable Farm Income in the questionnaire was used to measure the farm income of rural households.
3.2.1 Independent variable
Farmland transfer-out (FLT) was selected as the independent variable. The transfer-out of farmland in poverty areas mainly includes two forms: farmland lease (FLL) and farmland expropriation (FLE). Farmland lease refers to the act of transferring the land use right to other residents or economic organizations. Farmland expropriation refers to the transformation of the land use rights owned by the rural collective economic organizations into state ownership in accordance with the provisions of the law after giving corresponding compensation to the rural collective economic organizations and individual farmers for the needs of the public interest. In the questionnaires of 1000 villages, this study selected the question “What is the current land status?” to measure whether rural households’ farmland was leased. The answers “lease to others” and “pool land as shares” were assigned a value of 1, and the other answers were assigned a value of 0. Besides, the question “How much land was expropriated by the government?” was used to measure whether rural households’ farmland was expropriated by the government. The answer “expropriated” was assigned a value of 1, and 0 for others.
3.2.3 Moderating variable
Entrepreneurship (FE) in poverty areas was selected as the moderating variable. The entrepreneurship refers to the fact that farmers in poverty areas, either by themselves or in partnership with others, produce or provide services by creating new enterprises and organizations, including the self-employed. Based on the method of Yang et al. (2017), this study set the moderating variable as the dummy variable of whether to start a business; 1 was assigned to the entrepreneurial behaviors, otherwise 0 was assigned.
3.2.4 Control variables
Based on existing studies (Deininger, 2011; Lay and Nolte, 2018), this study used control variables at the individual, household, and village levels to control heterogeneity at the individual, household, and village levels. The control variables at the individual level included: (1) Age (Age). Values were assigned according to the samples filled in the questionnaire with the same values before and after; (2) Skill mastery (Skill). It was measured by the question “Do you have any particular craft or skill”. If the farmer had a craft or skill, the value was 1, otherwise it was 0. The control variables at the household level include: (3) the proportion of males in the family (Male), that is, the proportion of males in the total number of people in the family except entrepreneurs; (4) Clan (Clan). It was measured by the question “Do people with the same surname as you have a genealogy”. If the answer was “yes”, the value 1 was assigned, otherwise 0 was assigned. The control variables at the village level included: (5) industrial park (inpark). It was measured by the question “whether there is an industrial park in the village”. If the answer was “yes”, the value 1 was assigned, otherwise 0 was assigned; (6) Social harmony in the village (Harmony). If the answer was “very low, a little low, fine, a little high, very high or extremely high”, 1, 2, 3, 4, 5 or 6 was assigned, respectively. The values for the answers were averaged finally.
3.2.5 Instrumental variable
Based on the research of Taylor et al. (2003), the average farmland transfer-out ratio (AFLTR) of a village in poverty areas was selected as an exogenous instrumental variable. On the one hand, within a village, there may be a strong peer selection effect for farmland transfer-out. It is easy for different rural families within the village to imitate, and the farmland transfer-out decisions of surrounding families may have a great impact on the decisions of a rural family. On the other hand, the decision of surrounding households to transfer-out farmland is not directly related to the income increase and poverty alleviation of a family. Therefore, this index is an appropriate instrumental variable.
3.3 Model setting
To test the effect of farmland transfer-out on poverty alleviation in poverty areas, as well as the role of farmers’ entrepreneurship, the following models were established:
Citation: International Food and Agribusiness Management Review 27, 5 (2024) ; 10.22434/ifamr1119
Where PAi is the dependent variable poverty alleviation, which is measured by household income; EIi is the dependent variable entrepreneurial income; NFIi is the dependent variable non-farm income; FIi is the dependent variable farm income; FLTi is the independent variable farmland transfer-out (including land expropriation (FLEi) and farmland lease (FLLi)); FEi is the moderating variable, indicating whether farmers start a business or not; Ci is the control variable;
3.4 Data processing and analysis
To avoid the influence of outliers on the test results, the main continuous variables were winsorized at the level of 1% before the test. To avoid the influence of multicollinearity, the continuous variables that make up the interaction terms were centralized, and variance expansion factor (VIF) diagnosis was performed for all explanatory variables. The results showed that the average VIF of each variable was 1.14, which was less than 10. Therefore, multicollinearity was excluded. In addition, robust standard error was used in the regression, to eliminate heteroskedasticity and autocorrelation.
4. Empirical analysis
4.1 Descriptive statistics
The descriptive statistics of the main variables are shown in Table 1. The results showed that the average annual income of rural households in poverty areas was 98 930 RMB yuan. About 1.06% of the respondents in poverty areas had their farmland expropriated, and 28.4% of the respondents leased their farmlands to others. About 32.3% of the respondents had entrepreneurial behaviors. The average age of the respondents was about 42.02 years old. About 31.6% of the respondents mastered some skills. The average proportion of men in the respondents’ households was 48.7%. About 21.1% of families had a genealogy. About 23.2% of the villages had industrial parks. The social harmony of the villages was at a high level.
Descriptive statistics.
Citation: International Food and Agribusiness Management Review 27, 5 (2024) ; 10.22434/ifamr1119
4.2 Main effect test
Table 2 shows the impact of farmland transfer-out in poverty areas on poverty alleviation, as well as the moderating role of farmers’ entrepreneurship. Column (1) contains only control variables. Column (2) analyzes the relationship between farmland expropriation and poverty alleviation. Column (3) adds the interaction between farmland expropriation and farmers’ entrepreneurship on the basis of column (2). Column (4) analyzes the relationship between farmland lease and poverty alleviation. Column (5) adds the interaction between farmland lease and farmers’ entrepreneurship on the basis of column (4).
Results of the main effect test.
Citation: International Food and Agribusiness Management Review 27, 5 (2024) ; 10.22434/ifamr1119
The results of column (2) in Table 2 show that there is a significant positive correlation between farmland expropriation and poverty alleviation in poverty areas (
The above analysis shows that farmer entrepreneurship plays a significant moderating role in the relationship between farmland expropriation and poverty alleviation. To show this moderating effect clearly, this study drawn a two-dimensional interaction diagram (Figure 2). Figure 2 shows that in the case of farmers’ entrepreneurship, the slope of the corresponding effect line is greater than that of non-entrepreneurs. This indicates that farmers’ entrepreneurship can strengthen the positive effect of farmland expropriation on poverty alleviation.
Moderating role of farmers’ entrepreneurship on the relationship between farmland expropriation and poverty alleviation.
Citation: International Food and Agribusiness Management Review 27, 5 (2024) ; 10.22434/ifamr1119
To further explore the effect of farmland transfer-out on poverty alleviation, this study analyzed whether there were differences between the dimensions of household income. Table 3 shows the test results of the relationships between entrepreneurial income, non-farm income, farm income, and farmland transfer-out in poverty areas. Columns (1), (2) and (3) analyze the relationship between farmland transfer-out and entrepreneurial income. Columns (4), (5) and (6) analyze the relationship between farmland transfer-out and non-farm income. Columns (7), (8) and (9) analyze the relationship between farmland transfer-out and farm income.
Test results of the relationship between farmland transfer-out and household income.
Citation: International Food and Agribusiness Management Review 27, 5 (2024) ; 10.22434/ifamr1119
The results of columns (2) and (3) in Table 3 show that farmland expropriation and farmland lease are positively correlated with entrepreneurial income (
4.3 Endogeneity test
4.3.1 Instrumental variable method
Considering the urgent need to get rid of poverty, Peasant may directly or indirectly change their livelihood capital and thus change their livelihood strategies, that is, they may passively convert agricultural land into non-agricultural land, or lease their lands to others. Therefore, there may be a reverse causality. This study used the two-stage instrumental variable method to eliminate the endogeneity of the model (Wooldridge and Jeffrey, 2010, 2014).
Table 4 shows the results after dealing with the endogeneity of the model using the instrumental variable method. Columns (1), (3), (4), (6), (8) and (9) in Table 4 show that in the first stage the values for the instrumental variable are all positive (p<0.01), which indicates that the instrumental variable meets the requirements of relevance. Besides, the F-values of the first stage are all greater than 10. The results of column (2) in Table 4 show that there is still a positive correlation between farmland expropriation and poverty alleviation in poverty areas after considering the endogeneity problem caused by sample selection bias (
Instrumental variable test.
Citation: International Food and Agribusiness Management Review 27, 5 (2024) ; 10.22434/ifamr1119
4.3.2 Heckman two-stage regression
To eliminate the potential sample selection bias in the main effect test, the Heckman two-stage method was used for correction. Specifically, a probability equation of poverty alleviation in poverty areas was first established, the Probit model was used to estimate the possibility of farmland expropriation and farmland lease, and then the estimation results was used to calculate the Inverse Mills Ratio (IMR) and IMR1. Then, an regression equation of the impact of farmland transfer-out on poverty alleviation was further constructed, and the IMR and IMR1 calculated in the previous step were incorporated as control variables into the equation to adjust the possible error. In addition, the average farmland transfer-out rate in poverty areas was still included as an exogenous variable in the probability equation.
The results of column (2) in Table 5 show that there is still a significant positive correlation between farmland expropriation and poverty alleviation in poverty areas (
Heckman two-stage regression results.
Citation: International Food and Agribusiness Management Review 27, 5 (2024) ; 10.22434/ifamr1119
4.3.3 Propensity score matching (PSM)
In this study, the propensity score matching (PSM) was used to solve the possible problems of variable omission and sample selection bias. Specifically, the Logit model was used to filter the matching variables, and the matching variables participating in the filtering were the control variables that appear in the regression models in this study. The dependent variables were 0-1 dummy variables. On this basis, the corresponding propensity score was calculated based on the fitting value of the Logit model, the samples were paired according to the kernel matching, and then the regression models were refitted according to the samples matched by the PSM. The results are shown in Table 6, indicating that the main conclusions of this paper remain robust after using the PSM method to control the possible endogeneity problems.
Propensity score matching (PSM) results.
Citation: International Food and Agribusiness Management Review 27, 5 (2024) ; 10.22434/ifamr1119
4.4 Robustness test
4.4.1 Hierarchical linear model (HLM) test
The key explanatory variable in this paper was analyzed based on the farmland transfer-out at the individual and household levels. The individuals and households live in poor villages. Therefore, there is an obvious nesting relationship between the data. It is suitable to use the HLM for cross-layer analysis. In view of this, this study used HLM to test the robustness of the above hypotheses, and used random intercept model to estimate. It is found that the results obtained are not different from the above, and all the hypotheses are supported (Table 7).
Hierarchical linear model test results.
Citation: International Food and Agribusiness Management Review 27, 5 (2024) ; 10.22434/ifamr1119
4.4.2 Test by substituting dependent variable
The poverty does not only include low income in the absolute sense. The concept of relative poverty has become increasingly prominent as the gap between rich and poor has widened. Some scholars have defined relative poverty as a situation below the normal standard of living or below the average income level with reference to the general population (Townsend, 1979). In view of this, this study constructed an index of relative poverty alleviation for robustness test, and the difference between the household income of a village family and the average household income of the village was used for measurement. The larger the value, the smaller the difference, and the more obvious the effect of farmland transfer-out on alleviating relative poverty. The results of the robustness test by substituting dependent variable (Table 8) show that there was no difference with the main effect test results.
Robustness test results by substituting dependent variable.
Citation: International Food and Agribusiness Management Review 27, 5 (2024) ; 10.22434/ifamr1119
4.5 Additional analysis
Poverty alleviation in poverty areas provides a solid foundation for solving the problems of Chinese farmers. It also means that China has embarked on a new journey of gradually realizing common prosperity, that is, with the aim of achieving the common prosperity, the government tries to promote the continuous increase of farmers’ income, and constantly improves the sense of gain, happiness, and security of farmers. It can be seen that the essence of achieving common prosperity is to enhance people’s sense of happiness. Therefore, it is particularly important to clarify the logical relationship between farmland transfer-out, poverty alleviation, and individual happiness in poverty areas.
Many scholars have studied the effect of farmland transfer-out on individual happiness. Michael (2011) believed that farmland expropriation freed the land-expropriated people from their original living difficulties and helplessness, and forced them to a new development way with new livelihood strategies (Levien, 2011). This ultimately improved the welfare of the land-expropriated, and promoted their non-farm employments, the increase in household income, and the wealth effect, thereby significantly improving the happiness of farmers. However, some scholars believe that farmland expropriation leads to the transfer of social wealth from the poor to the wealthy, exacerbating social income inequality (Carpenter and Ross, 2009), and reducing farmers’ happiness. However, is there a relationship between the happiness brought by farmland transfer-out and the poverty alleviation induced by farmland transfer-out? Does income increase and poverty alleviation mean an increase in individual happiness? Existing studies have not yet provided an answer to this question. This study argues that the effect of farmland transfer-out is an important bridge between farmland transfer-out and individual happiness in poverty areas, but the income increase is not completely equivalent to the improvement of happiness. Farmers’ entrepreneurial behavior also plays an important role in the relationship between poverty alleviation and individual happiness.
4.5.1 Transmission effect of poverty alleviation on individual happiness in poverty areas
There is no consensus on the relationship between income level and happiness at the macro level. Some studies have even shown that there is an “Easterlin Paradox” between economic growth and happiness. However, most scholars believe that income increase at the individual level can help improve happiness. For example, a randomized controlled trial in rural Zambia conducted by Natali et al. (2018) showed that farmers’ happiness was positively correlated with their income levels. Diener (2000) also demonstrated a significant positive correlation between economic income and subjective well-being. Especially for the poor, poverty alleviation is an important source of happiness (Holtz-Eakin and Weathers, 2000). To test the transmission effect of poverty alleviation on the relationship between farmland transfer-out and happiness in poverty areas, the following model was established:
Citation: International Food and Agribusiness Management Review 27, 5 (2024) ; 10.22434/ifamr1119
Where Well_being is the individual happiness. This study also used a six-point Likert scale to measure happiness based on the question “What is your family’s overall happiness?” in the questionnaire (Crum and Chen, 2015), and 1, 2, 3, 4, 5 and 6 were assigned to “very unhappy”, “unhappy”, “okay”, “somewhat happy”, “happy” and “very happy”, respectively. In this study, the values for respondents’ responses were averaged.
Table 9 shows the regression results of the relationship between farmland transfer-out, poverty alleviation, and individual happiness in poverty areas. The results of column (1) in Table 9 show that farmland expropriation in poverty areas can significantly improve the subjective well-being of farmers (
Test of the mediating role of poverty alleviation.
Citation: International Food and Agribusiness Management Review 27, 5 (2024) ; 10.22434/ifamr1119
4.5.2 Positive role of farmers’ entrepreneurship in the relationship between poverty alleviation and individual happiness in poverty areas
Although the income increase and poverty alleviation induced by farmland transfer-out can help improve individual happiness in poverty areas, happiness does not depend entirely on income level. Previous studies have shown that giving the poor people multi-dimensional satisfaction and enjoyment in economic income, medical care, environment, and insurance is an important way for the poor to get happiness (Luo et al., 2021). In particular, the environment improvement is an important driving force and guarantee to promote economic development and social harmony in poverty areas in the post-poverty alleviation era, and has become one of the core contents of improving individual happiness. It is worth noting that many scholars ignore the role of entrepreneurship when studying the contribution of environment improvement to human well-being. This study argues that in the post-poverty alleviation era, farmers’ entrepreneurship in poverty areas is a core point affecting the relationship between poverty alleviation and individual happiness. Successful entrepreneurship can not only effectively extend the industrial chain and increase the added value of products (Kimhi, 2010), but also help to increase the income and family capital accumulation of entrepreneurs, reducing the probability of entrepreneurs falling into poverty. On the one hand, the jobs and incomes generated by entrepreneurship can improve the level of social welfare and promote the development of the local economy through the “trickle-down effect”. On the other hand, entrepreneurship promotes local economic growth by enhancing market competition and product and service innovation (Baumol and Strom, 2007; Samila and Sorenson, 2011), helping to develop new products, new markets, and new technologies, and increasing jobs. Thus, entrepreneurship can not only create new industries and products (Ali and Ali, 2013), but also provide employment opportunities for the poor, increasing the income of the poor (AzisMuthalib et al., 2014; McMullen, 2011). The poor can also indirectly benefit from the socio-economic development and improved social welfare brought by entrepreneurial activities (Mustapa, 2018), enhancing individual happiness. Therefore, to investigate the effect of farmers’ entrepreneurship on the relationship between poverty alleviation and individual happiness, this study conducted a regression analysis on the relationship between the two. The results of column (2) in Table 10 show that there is a positive correlation between poverty alleviation and individual happiness in poverty areas (
The role of farmers’ entrepreneurship in the relationship between poverty alleviation and individual happiness.
Citation: International Food and Agribusiness Management Review 27, 5 (2024) ; 10.22434/ifamr1119
5. Conclusions and Implications
5.1 Conclusion
Based on the data of the survey of 1,000 villages, this study analyzed the impact of farmland transfer-out on poverty alleviation in poverty areas, and focused on the important role of farmers’ entrepreneurship. The following conclusions are obtained: Firstly, farmland transfer-out in poverty areas helps to increase the income of households and alleviate poverty, that is, farmland expropriation and farmland lease are effective means to alleviate poverty and achieve common prosperity in poverty areas. Secondly, farmers’ entrepreneurship effectively strengthens the positive effect of farmland expropriation on poverty alleviation in poverty areas. However, farmers’ entrepreneurship does not play a significant role in the relationship between farmland lease and poverty alleviation. Finally, farmland expropriation significantly promotes the increase of entrepreneurial income, but has no significant impact on non-farm income. Farmland lease significantly promotes the increase of entrepreneurial income and non-farm income. Both farmland expropriation and farmland lease are negatively correlated with farm income. Farmland transfer-out (farmland expropriation and farmland lease) improves individual subjective well-being in poverty areas through poverty alleviation, and farmers’ entrepreneurship strengthens the happiness improvement induced by poverty alleviation.
5.2 Policy implications
Firstly, this study explains the positive effect of farmland transfer-out on poverty alleviation in poverty areas. The results suggest that the current poverty alleviation should focus on increasing policy support for farmland transfer-out, improving the farmland transfer market, encouraging small farmers to transfer out their farmlands, and promoting large-scale operation of farmland. On the one hand, it is necessary to increase the publicity of farmland transfer-out, to encourage rural households to transfer out farmland. Farmers’ willingness to transfer-out farmland shall be focused, to avoid compulsory farmland transfer-out. The supervision mechanism for farmland transfer-out shall be established to prevent farmland transfer-out from becoming a means for a few people to seek wealth. On the other hand, under the premise of the “separation of three rights” of farmland, the property rights and interests of households who have leased or expropriated farmland shall be protected, and the credit support and non-farm employment shall be provided, to avoid adverse selection behavior.
Secondly, to highlight the positive effect of farmland transfer-out on poverty alleviation in poverty areas, it is necessary to improve the policies and service systems that encourage and support farmers to start businesses, and strengthen the important role of farmers’ entrepreneurship in the poverty alleviation induced by farmland transfer-out. On the one hand, the government shall provide entrepreneurship training for farmers. By investigating farmers’ entrepreneurship training needs, the government shall provide innovative and targeted training courses for farmers at different levels of demand. The training performance shall be evaluated, to improve the quality and efficiency of entrepreneurship training and the effect of training in boosting farmers’ entrepreneurship and increasing income. On the other hand, the reform of the farmland transfer-out policy shall be deepened, especially the design of the land transfer-out policy for the purpose of encouraging and supporting farmers’ entrepreneurship, so as to ensure the smooth connection between farmers’ participation in farmland transfer-out and entrepreneurship. Supports such as credit support for farmers’ entrepreneurship shall be increased, and the platforms for farmers’ entrepreneurship and financing shall be established and improved, to help farmers’ entrepreneurship.
Thirdly, the increase of wealth is one of the important factors to improve the subjective happiness of individuals in poverty areas. However, in the post-poverty alleviation era, the positive effect of poverty alleviation on happiness also needs to emphasize the important role of farmers’ entrepreneurship. While emphasizing the improvement of happiness of the poor through economic development, the government shall also pay attention to farmers’ entrepreneurship, and further play its role in integrating regional resources, optimizing the industrial structure, promoting economic development, and increasing employment and income, to improve the happiness of individuals.
5.3 Limitations
This study also has limitations, such as insufficient attention to the complexity of the poverty state and the lack of multi-dimensional analysis and dynamic characteristics of poverty forms. In addition, although this study demonstrates the relationship and mechanism between farmland transfer-out (farmland expropriation and farmland lease) and poverty alleviation in poverty areas, it ignores the differential effect of lease and expropriation of partial farmland on household income. Therefore, further empirical analysis is needed.
Acknowledgements
Conceptualization, M.Z.; methodology, M.Z.; validation, M.Z. and N.Z.; formal analysis, M.Z.; investigation, X.H.; data curation, X.H.; writing—original draft preparation, M.Z. and N.Z.; writing—review and editing, M.Z..and W.Z.; supervision, X.H. and W.Z.; project administration, W.Z.; funding acquisition, M.Z. This research was supported by Soft Science Research Program of Zhejiang Province, funding number 2022C35011; Zhejiang Postdoctoral Research Merit-based Funding Projects, funding number ZJ2022040; and Major Humanities and Social Sciences Research Projects in Zhejiang higher education institutions, funding number 2023QN023. Conflicts of Interest: The authors declare no conflicts of interest.
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Data from the State Council Information Office of the People’s Republic of China. Poverty Alleviation: China’s Experience and Contribution. Available online at http://www.scio.gov.cn/zfbps/ndhf/2021n_2242/202207/t20220704_130672.html.
Data from Xi Jinping: Speech at the Symposium on Decisive Battles to Succeed in Fighting Poverty. Available online at http://www.xinhuanet.com/politics/leaders/2020-03/06/c_1125674682.htm.
Data from Ministry of Agriculture and Rural Affairs of the People’s Republic of China. Available online at http//www.moa.gov.cn/govpublic/zcggs/202010/t20201014_6354246.htm.
The per capita disposable income of rural residents in China in 2015 was 10 772 RMB yuan, and the per capita consumption expenditure was 9223 RMB yuan (data source: China Statistical Yearbook 2016). The per capita disposable income of rural residents in the sampling area in 2015 was 10 618 RMB yuan, and the per capita consumption expenditure was 8333 RMB yuan, close to the national average. The t-test results of per capita disposable income and per capita consumption expenditure of rural residents in the sampling area and the whole country are −0.58 and 0.06, respectively, which rejects the null hypothesis that there is a significant difference between the sampling area and the whole country.
