The Causal Effect of Land Consolidation Projects on Land Rental Development

A Case Study of Kyoto Prefecture

Abstract

The objective of this study is to examine whether land consolidation projects (LCPs) facilitate land rental in agriculture. The Japanese agricultural policy has long been aiming at consolidating small-scale farms into sufficiently large size farms. A theoretical model in this paper predicts that the LCPs increase the demand for farmland on both lessors and lessees, which obscures the effect of land transactions between them. Using data collected by the author from Kyoto Prefecture, this paper measures the effectiveness of the LCPs on land rental. My empirical result shows that the LCPs have no causal effect on land rental, which is not consistent with previous studies in the relevant literature.