Abstract: In the increasingly open market pattern, great changes have been taken place both in the internal structure and in the external structure of Chinese agriculture. Thus, to develop moderate scale agriculture has become the focus at present. With the promotion of the moderate scale operation in the principal way of land transfer, the land cost problem is appearing. In 2016, land cost in Jiangsu Province rose to 557.5 yuan/mu and land transfer price rose to 791.1 yuan/mu, while the level of land cost of Japan’s rice and wheat farmer households that has the similar resource endowment is presenting a decreasing trend. Further empirical results show that the land cost has an inverted “U” shape effect on the efficiency of wheat planting technology. When the total cost of land exceeds 477.71 yuan/mu or the seasonal wheat land cost is more than 225.57 yuan/mu, the increasing land cost will further damage the competitiveness of the wheat industry. In the future, the Chinese government may explore various ways to realize the moderate scale operation and establish land transfer compliance insurance system to promote the sustainable development of moderate scale operation.

Key words: moderate scale operation; land cost; land transfer price; supply side reform; technical efficiency