Research on the flow of agricultural subsidies and the stability of transfer contracts: with a discussion on its impact on investment

Abstract

Contractual stability in land management is crucial for incentivizing long-term investment, enhancing productivity, and promoting sustainable agricultural development. However, contractual instability remains a prominent issue in China’s land leasing market reform, and its causes and impacts require systematic analysis. This study, based on data from the 2020–2022 China Land Economic Survey and 2018 farmer survey data from Heilongjiang, Henan, Zhejiang, and Sichuan provinces, systematically explores the economic logic and impact of land transfer contract stability from the perspective of agricultural subsidy flows. The results show that when agricultural subsidies flow to receiving households, it not only promotes a trend towards shorter land transfer terms but also increases the risk of contract fulfillment. Further analysis reveals that short-term land transfers and high contract fulfillment risks are key factors inhibiting long-term investment by receiving households. Therefore, during adjustments to agricultural subsidy policies, land transfer contract coordination mechanisms should be strengthened to reduce the impact of subsidy ownership changes on contract stability. Simultaneously, mechanisms for protecting land transfer contracts and resolving disputes should be improved to stabilize the long-term expectations of agricultural operators, thereby incentivizing long-term agricultural investment.