Economic Reason for Cultivated Land Circulation

Characteristics of interest subjects in land circulation market of rural China are introduced, which are land supplier (peasant household) and requester (large household). It is pointed out that due to the poor management capacity and market adaptability, peasant household may rent some or all the contracted land in the form of subcontract if someone is willing to offer a higher rent. Having high comprehensive quality, large households may introduce new agricultural technology on time. They are good at operating efficient agriculture and scale agriculture and have strong market adaptability and business decision-making skill. Through establishing the cost-benefit function, cost benefit of rural land circulation subject is analyzed and the economic reason of rural land circulation is discussed. Result shows that rural land circulation is the expected analysis of cost benefit by relevant subjects driven by economic benefits, in order to realize the optimum allocation of efficiency. Only when the interests of relevant subjects are ensured or improved, can rural land circulation be carried out smoothly. Finally, suggestions are put forward, such as ensuring the price rise of agricultural products, promoting the development of agricultural science and technology, reducing the circulation cost and enhancing the formation of agricultural scale in order to promote the rapid, orderly and healthy development of rural land circulation.