Abstract
The Taiwanese government introduced specialized rice production and marketing zones (SRPMZs) in 2005 as part of the structural adjustment of the rice industry. This study shows the effect of SRPMZ on leased farmland and custom farming and clarifies the role of the policy of supporting group farming operations in achieving farmland consolidation. This study uses the difference-in-differences method with and without covariates to estimate the effects of SRPMZ policy in Taiwan. This study analyzes the effect of the SRPMZ designation on the areas of leased and custom farming farmland at the village level. This study used village-level data from Taiwan’s Censuses of Agriculture from 2000 to 2015. We find that SRPMZ designation increases the area of leased farmland per village by 13.5 ha and decreases the area with custom farming by 4.86 ha when we apply difference-in-differences methods with time-varying covariates. This is the effect of farmers choosing to lease their farmland through SRPMZ instead of custom farming. While several studies discuss the SRPMZ policy, focusing on farmer productivity or SRPMZ operator efficiency, few studies have analyzed the impact of the SRPMZ policy on farmland use. The results indicate that the policy of supporting group farming operations, coupled with farmland leasing, can promote farmland consolidation and improve the agricultural structure.
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Notes
Following Takahashi et al. (2018), we define farmland consolidation as the concentration of farmland into large-scale farms and the resolution of farmland fragmentation. In addition to buying and leasing farmland, custom farming is a way to consolidate farmland. Custom farming is a contract in which small farmers outsource all large-scale mechanical work to farmers or companies that manage tractors and agricultural machinery. Outsourced work includes raising seedlings, leveling soil, transplanting, and harvesting crops. Landowners using custom farming pay for all costs, including seeds, chemicals, and other inputs.
A cadastral land number is a unique number associated with the location, acreage, owner, and other information.
Taiwan implemented a policy of reorganizing counties and cities into municipalities in 2010, and the village codes were different before and after the reorganization. As the survey content varied slightly from year to year, this study compared the annual variables and combined them with the village codes to obtain information from the four years. In addition, the public information on SRPMZs sourced from the Council of Agriculture only lists the operators and townships of the designated area, not the villages. Therefore, we obtained the cadastral land number of each SRPMZ operator from the Council of Agriculture for identification. Finally, we used the data from the Cadastral Map Information Network Convenient Service System of the Department of Land Administration, Ministry of the Interior, and determined the village codes.
We do not examine the efficiency or productivity of SRPMZ participants, such as returns to farmland, due to a lack of data in the agricultural censuses.
See Cameron and Trivedi (2005) and Callaway and Sant’Anna (2021) for the discussion on difference-in-differences when the parallel trends assumption holds only after conditioning on observed covariates. Takayama et al. (2021) and Tran et al. (2022) also included time-varying control variables to check the sensitivity of the DID estimation results.
The interviews were conducted in December 2022 in the central part of Taiwan.
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Acknowledgements
We are grateful to the Agricultural and Food Agency (AFA) for providing research data and assistance. This work was supported by the Japan Society for the Promotion of Science Grants-in-Aid for Scientific Research (19K15921).
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Appendices
Appendix A
See Table 6.
Appendix B
See Table 7.
Appendix C
See Table 8 .
Appendix D
See Table 9 .
Appendix E
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Chang, T., Takahashi, D., Huang, CC. et al. Impact of specialized rice production and marketing zoning policy on farmland use in Taiwan. Paddy Water Environ 22, 209–222 (2024). https://doi.org/10.1007/s10333-023-00962-6
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DOI: https://doi.org/10.1007/s10333-023-00962-6