Agricultural subsidies offer significant support for the stability of global food security. With the backdrop of land circulation, the object of China’s land fertility protection subsidy is becoming increasingly ambiguous. Thus, outflower and inflower sense this subsidy as a profitable opportunity. Existing research has treated all agricultural subsidies as a whole, disregarding the distinct policy goals of different agricultural subsidies. The current study subdivides agricultural subsidies, with a focus on land fertility protection subsidies, which explores the relationship between village types dominated by subsidy recipients and the scale of land circulation. The current study, conducted on the village level, reflects individual farmers’ decisions influenced by such causes as village social structure and economic network. This study shows that in subsidized outflower-led villages, the scale of land circulation is considerably large, and the proportion of farmers exiting land to promote circulation is also markedly high. The land fertility protection subsidy often deviates from its intended policy goals. Furthermore, the impact of this distribution on land circulation varies among different entities in land transactions in different villages. Therefore, additional targeted and refined policy reforms are necessary to realize the original goal and effectively promote land fertility protection subsidies.