Land rental, prices and the management of China's grasslands: the case of Inner Mongolia Autonomous Region

Heterogeneity among China's pastoral households raises the prospect that efficient transfer of grassland-use rights may improve grassland management. More understanding of grassland rental is needed if policy incentives on grassland management are to be refined. Based on a survey of 252 herders in the typical steppe, desert steppe and sandy grassland areas of Inner Mongolia, a significant part of China's overall grasslands, a multinomial logit model was used to explore factors influencing the decision to: (i) rent in grassland, (ii) rent out grassland, or (iii) neither rent in nor rent out grassland. A multiple regression model then investigated the factors influencing the price of this rented grassland, including a focus on the factors of the exchange. The findings suggest that rental has facilitated a level of specialisation whereby households with less own-grassland area, more livestock, more intensive production systems, lower perceptions of degradation, and some off-farm income (but not high levels) being more likely to rent in land. The likelihood was independent of the type of grassland, extent of grazing bans or grassland subsidies received. Similarly, households more likely to rent out land had fewer livestock and some land subject to grazing bans. The specialisation and larger land areas has enabled households renting in land to have lower stocking rates than those of households not renting grassland. However, analysis of rental prices reveals limitations in the rental market, with prices dependent on the form of contract and relationship of the participants in the exchange, as well as on area rented and type of grassland. Thus, improving land transfer may be warranted to facilitate further specialisation and improved grazing management and herder livelihoods.