Formation Mechanism Of The Act Of Abandoning Farmland: An Analysis Based On The Transaction Cost Theory

In the new stage of agricultural development,there is a serious extended trend of abandoned farmlands which causes a huge waste of lands and hinders the development of agriculture and country's economy.In order to make full use of the land resources and keep the food security in our country,it is necessary to do a further study of the farmlands abandoning phenomenon.Actually,a lot of thsises are written by many people for digging out the reasons of this phenomenon.However,they just focus on the two aspects: the natural condition and the comparative benefit of agriculture,which is lack of the theoretical analysis.However,we found that as a new dimension to explain formation mechanism of the abandoned farmland,the transaction cost theory of New Institutional Economics has its own unique perspective.This paper uses the case study method,take one village in Gansu province as a study subject.From the perspective of the transaction cost theory,this paper proposed a explanatory framework to analyze the reasons of abandoned farmland with the transaction cost by using the study methods of filed investigation and interview.The empirical study show that: the most important reason for abandoning farmlands is the high transaction cost during the procession of rural land transferring and the agricultural products selling.(Such as: information search cost,negotiation cost,and execution cost,penalty cost,and transportation costs).Considering these costs above,the farmers think that the comparative income of agricultural investment is too low.Thus,more and more farmers are suffering from the shrinking of agriculture;they have no choice but abandon their farmlands.Since then,large amount of the farmlands are abandoned.Through the analysis of the formation mechanism of the act of abandoning farmland,this paper tries to put forward recommendation.First,the governmental administration should advocate the policy of "land bank".Second,the government should help to set up intermediary organization of the rural land transfer.Finally,weshould also to establish specialized cooperative organizations in rural areas.Through the measures above,we believe that we can reduce the transaction costs during the procession of rural land transferring and the agricultural products selling.Therefore,we can reduce the costs and improve the land utilization,which can help to deal with the abandoning farmland phenomenon.