Can rural collective economic development mitigate farmland abandonment in China? The roles of endogenous scale economies and exogenous financial incentives

Abstract

Reducing farmland abandonment is of critical importance for the scientific management of land resources, safeguarding food security, and promoting sustainable agricultural development. Existing research on farmland abandonment has mostly focused on individual or policy factors, and the association between the rural collective economy and farmland abandonment has not been fully examined quantitatively. Based on the latest panel data from the China Labor-force Dynamics Survey, this paper empirically examines the statistical correlation and conditional mechanisms between rural collective economic development and farmland abandonment from the dual perspectives of endogenous scale economies and exogenous financial incentives. The study finds that the level of collective economic development is significantly and negatively correlated with both the area and proportion of farmland abandonment. From the perspective of endogenous scale economies, collective economic organizations possessing the dual characteristics of “farmland scale management” and “service scale management” are associated with a lower degree of farmland abandonment. From the perspective of exogenous financial incentives, in the groups of households that have obtained loans and have higher loan amounts, the negative correlation between collective economic development and abandonment is more pronounced. Heterogeneity analysis shows that in villages providing uniform irrigation and drainage, technical guidance, and planting planning services, the aforementioned negative correlation is more prominent. Based on this, the role of the collective economy in relation to farmland abandonment is noted, alongside associations of lower abandoned land with the cultivation of moderate-scale agricultural management and the optimization of rural financial supply.