China’s farmland transfer market has long been embedded in networks of kinship, geography, and acquaintance relations, where informal transactions such as oral agreements and zero- or low-rent transfers are relatively common. In such contexts, rents often fall below market transaction prices due to reciprocal favors and ambiguous rights and responsibilities, failing to adequately reflect the true value of farmland management rights. Against the backdrop of the state’s continued policy emphasis on regulating farmland transfer, whether the formalization of contract forms can improve the rent price formation mechanism has become an important issue facing the standardized development of the farmland transfer market.Drawing on plot-level panel data from the 2022-2025 China Farmland Transfer Survey (seven rounds) conducted by the Center for Land Policy and Law, China Agricultural University, covering 27 provinces, this paper takes individual plots as the basic unit of observation and employs a two-way fixed effects model for empirical analysis. The findings reveal that plots with written contracts command higher rents than those with oral agreements. However, this effect does not imply that written contracts per se “inflate” rents; rather, formal contracts clarify the rights and obligations of both parties, reduce transaction uncertainty and friction costs, and thus align rental pricing more closely with the true market value of management rights. Mechanism tests indicate that written contracts affect rent formation through three primary channels: (1) specifying lease duration and breach penalties, which lowers the risk of premature termination and enhances operational stability; (2) shifting payment from lump-sum to annual settlement, which eases liquidity constraints and reduces default risk; (3) incorporating market-adjustment clauses linked to market conditions, which prevents rents from becoming rigidly fixed during the contract period and enables them to respond more flexibly to external market fluctuations. Heterogeneity analysis reveals that these effects are more pronounced among new agricultural business entities and in large-scale transactions, whereas no significant differences emerge across land types or geographical origins of the parties.Relative to the existing literature, this paper makes two contributions. First, by using plot-level transaction data that link rents, contract forms, and specific terms to individual plots, it enables a more refined identification of the relationship between contract form and rent. Second, by incorporating contract form, duration arrangements, payment methods, and adjustment rules into a unified analytical framework, it not only tests the direct effect of written contracts but also reveals the logic of “formalization of contract form→standardization of contract terms→rationalization of rent formation” from three dimensions, thereby deepening the understanding of contract governance and price formation mechanisms in the farmland transfer market.This study sheds light on the intrinsic logic of how contract forms affect rent price formation mechanisms in China’s farmland transfer market. The findings can help government departments formulate more targeted policy measures for contract governance and price guidance in the process of promoting the standardized development of the farmland transfer market, and provide differentiated institutional support for the rationalization of farmland transfer rents across different transfer entities and transaction contexts, so as to foster a healthy and orderly development of the farmland transfer market.