As the backbone of the state-owned agricultural economy， state farms represent an important force in promoting the modernization of agriculture with Chinese characteristics.Developing modern large-scale agriculture in the new era requires state farms to accelerate the development of modern agricultural large bases， large enterprises and large industries.However， state farms still face prominent constraints in land rights and interests， the separation of social functions， and the optimization of the two-tier management system， which restrict the efficiency of resource integration， the performance of strategic functions and the improvement of market competitiveness.Based on incentive compatibility theory， this paper constructs an analytical framework for the high-quality development of state farms.It is found that state farms are featured by state ownership， communal character and marketability.The deep-seated reason for the dilemmas in the high-quality development of state farms is that a stable and effective incentive compatibility mechanism has not yet been formed among state farms， local governments and worker households.Accordingly， this paper proposes to promote reform in a coordinated way from three levels： the government， state farm enterprises and worker households.We should strengthen the protection of land rights and interests， deepen the reform of separating government functions from enterprise management， improve the benefit linkage mechanism and service empowerment mechanism， and improve the modern agricultural industrial system.