This paper examines the mechanism and effectiveness of the right to operate farmland in overcoming information asymmetry and mitigating ex post moral hazard within the framework of China’s rural credit guarantee system expansion. The study uses 161,020 loan records issued to 72,649 borrowers from a rural commercial bank from 2004 to 2019 to test the guarantee effectiveness of China’s farmland operating rights from the perspectives of credit risk and default strategies. The study finds that: in the underdeveloped credit market with weak asset liquidity and weak protection of creditor rights, the strong assumption of the ex ante risk theory is weakened, making it insufficient to support the signaling mechanism of farmland operating rights and unable to generally lower the risk pricing. The analysis of mechanisms shows that the ex post incentive and constraint effects of farmland operating rights mortgage are superior to those of credit mutual guarantee and highly liquid assets, but inferior to those of unsecured loans or weakly liquid assets. The “mortgage ineffectiveness theory” of farmland operating rights is misguided, and it is necessary to enhance the execution of the legal right to enforce mortgages and create an institutional environment that enables farmland operating rights to play a role in ex ante screening mechanisms, thereby driving China’s rural credit market risk management from risk control to risk identification.