Land fragmentation and its driving forces in China

Fragmentation of landholdings is commonly regarded as a major obstacle to agricultural production growth in China. This study analyses the factors contributing to land fragmentation, and uses household- and village-level data from 11 villages in Jiangxi Province to test these factors empirically. Our analysis shows that land fragmentation in China is caused to a large extent by the egalitarian principles used in distributing and reallocating land use rights to households. Land within each village is classified into different classes, with each household receiving land from each class. Moreover, land is basically assigned on the basis of household size, with large households receiving substantially more (and slightly bigger) plots than small households. We further find that incomes from off-farm employment and land rental markets are associated with lower land fragmentation. Limited market access does not induce land fragmentation. Instead, we find that landholdings in suburban areas are more fragmented, probably because farmers cultivate a wider range of (high value-added) crops in these areas. We conclude that, although land fragmentation has slightly declined during the 1990s, it is likely to remain high in China if the current principles underlying land distribution within villages are maintained. Three policy options for reducing land fragmentation are suggested.