The Influence of Rural Land Transfer on Rural Households’ Income: A Case Study in Anhui Province, China

Abstract

This paper looks into the impact of China’s new rural land reform, the three rights separation policy (TRSP), on Chinese farmers’ income. Based on data collected from 360 rural households in Anhui Province, China, 2021, this paper constructed the influence pathways of the TRSP on household income and estimated the effects along different pathways using the structural equation model (SEM) model. It showed that through expanding the planting scale and promoting resource-use efficiency, the new land tenure system can indirectly increase transfer-in household income. However, the TRSP has a significant negative direct effect on transfer-out households’ income, and only a slight impact on transferring rural labor to other industries or relaxing the liquidity constraint. In short, the TRSP’s effect on income gains is more prominent in transfer-in households than transfer-out ones, which in the long run would lead to an increased income gap, more so if transfer-out households lack easy access to non-farm employment. Our findings suggest that public authorities should respect farmers’ autonomy in land transfer decisions and pay special attention to labor transfer in poverty alleviation. Meanwhile, widening income disparities among different groups should be heeded while implementing local governments’ service roles.