Impact of Wheat Price Changes on Farmers’ Willingness to Participate in Fallow

doi:10.5814/j.issn.1674-764x.2020.06.006

Abstract

Abstract:

After operating for four years, the fallow project in the groundwater funnel area of the North China Plain has produced an initial water-saving effect. However, groundwater funnel remediation is a long-term process, and grain price changes over time may affect farmers’ willingness to participate in fallow. Based on the estimation by the Cobb-Douglas production function, the relationship between farmers’ satisfaction with fallow compensation and planting income is analyzed based on survey data collected from farming households in Hebei, a typical province located in the groundwater funnel area. Using this data, the impact of wheat price changes on farmers’ willingness to participate in fallow is simulated. The results indicate wheat price changes affect farmers' expected planting income and consequently their willingness to fallow; 88% of farmers would be unwilling to participate in fallow with a 0.1 yuan per 500 g increase in the wheat price, whereas 71.4% of farmers would be willing to participate in fallow with a 0.2 yuan per 500 g decrease in the price. Finally, some policy implications are proposed, such as the recommendation that the fallow compensation should be adjusted according to the wheat price multiplied by the average wheat yield of the three years before fallow in the North China Plain.

Key words: wheat price change, fallow, ecological compensation, farmers

CHENG Hao, XIE Hualin. Impact of Wheat Price Changes on Farmers’ Willingness to Participate in Fallow[J]. Journal of Resources and Ecology, 2020, 11(6): 589-597.

Figures/Tables 8

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Farmer feature	Levels	Percentage (%)
Gender	Male	80.1
Gender	Female	19.9
Age	35 years old or below	4.1
	36-45 years old	8.7
	46-55 years old	31.1
	56-65 years old	38.8
	66 years old or older	17.3
Education level	Uneducated	8.2
	Primary school	33.2
	Junior high school	48.5
	High school, Secondary school, Vocational college	9.7
	College or above	0.1
Does the family have an off-farm income?	Yes	28.6
Does the family have an off-farm income?	No	71.4
The expectation of fallow compensation	< 400 yuan mu^-1	24.2
	400-500 yuan mu^-1	26.6
	500-600 yuan mu^-1	23.4
	600-700 yuan mu^-1	18.7
	> 700 yuan mu^-1	7.1

Farmer feature	Levels	Percentage (%)
Gender	Male	80.1
Gender	Female	19.9
Age	35 years old or below	4.1
	36-45 years old	8.7
	46-55 years old	31.1
	56-65 years old	38.8
	66 years old or older	17.3
Education level	Uneducated	8.2
	Primary school	33.2
	Junior high school	48.5
	High school, Secondary school, Vocational college	9.7
	College or above	0.1
Does the family have an off-farm income?	Yes	28.6
Does the family have an off-farm income?	No	71.4
The expectation of fallow compensation	< 400 yuan mu^-1	24.2
	400-500 yuan mu^-1	26.6
	500-600 yuan mu^-1	23.4
	600-700 yuan mu^-1	18.7
	> 700 yuan mu^-1	7.1

Farmer feature	Levels	Satisfied with the current compensation (%)	Unsatisfied with the current compensation (%)
Gender	Male	55.45	44.55
Gender	Female	28.00	72.00
Age	35 years old or below	60.00	40.00
	36-45 years old	63.64	36.36
	46-55 years old	53.85	46.15
	56-65 years old	30.61	69.39
	66 years old or older	77.27	22.73
Education level	Uneducated	60.00	40.00
	Primary school	32.31	67.69
	Junior high school	57.38	42.62
	High school, secondary school, vocational college	58.33	41.67
	College or above	100.00	0.00
Does the family have an off-farm income?	Yes	63.89	36.11
Does the family have an off-farm income?	No	44.44	55.56

Farmer feature	Levels	Satisfied with the current compensation (%)	Unsatisfied with the current compensation (%)
Gender	Male	55.45	44.55
Gender	Female	28.00	72.00
Age	35 years old or below	60.00	40.00
	36-45 years old	63.64	36.36
	46-55 years old	53.85	46.15
	56-65 years old	30.61	69.39
	66 years old or older	77.27	22.73
Education level	Uneducated	60.00	40.00
	Primary school	32.31	67.69
	Junior high school	57.38	42.62
	High school, secondary school, vocational college	58.33	41.67
	College or above	100.00	0.00
Does the family have an off-farm income?	Yes	63.89	36.11
Does the family have an off-farm income?	No	44.44	55.56

Variables	β	S.E.	Sig.
ln (sown area)	0.999	0.075	0.000***
ln (laborinput)	0.033	0.019	0.019*
ln (capital input)	0.030	0.070	0.038*
Age	0.015	0.557	0.579
Educational level	-0.13	-0.497	0.620
Constant	7.153	0.473	0.000
R²	0.935