Deep­en­ing Re­form of the Ru­ral Land Sys­tem with Mar­ket Power

Ad­vanc­ing the re­form of the ru­ral land sys­tem is a sig­nif­i­cant com­po­nent of the strat­egy and an im­por­tant nt sup­port­ing mech­a­nism to ac­cel­er­ate the mod­ern­iza­tion of the coun­try’s agri­cul­ture and ru­ral ar­eas.

China Pictorial (English) - - Front Page - Text by Dang Guoy­ing oy­ing

“Ru­ral vi­tal­iza­tion” was pro­posed as one of the ma­jor strate­gies of de­vel­op­ing a mod­ern­ized econ­omy in the re­port de­liv­ered to the 19th Na­tional Congress of the Com­mu­nist Party of China (CPC). Ad­vanc­ing the re­form of the ru­ral land sys­tem is a sig­nif­i­cant com­po­nent of the strat­egy and an im­por­tant fac­tor in ac­cel­er­at­ing the mod­ern­iza­tion of the coun­try’s agri­cul­ture and ru­ral ar­eas.

Due to is­sues con­cern­ing de­ci­sion­mak­ing rights of ru­ral land use and the di­rect in­ter­ests of land users, the re­form could make a big im­pact on many as­pects of so­ci­ety.

The re­form of the ru­ral land sys­tem starts with a change in land use rights. Be­fore the be­gin­ning of the re­form and open­ing up in 1978, China adopted a land pol­icy fea­tur­ing highly cen­tral­ized farm­land own­er­ship and op­er­a­tion. Farm­ing is­sues such as how to use the land and what and how much to grow were all de­ter­mined by the pro­duc­tion team of the ru­ral peo­ple’s com­munes. Farm­ers had to fol­low sched­ules ar­ranged by the pro­duc­tion team to con­duct work. This sys­tem’s lack of flex­i­bil­ity and in­abil­ity to arouse farm­ers’ en­thu­si­asm caused out­put to fall far short of the huge food de­mands of Chi­nese peo­ple at that time.

Af­ter the Third Ple­nary Ses­sion of the 11th CPC Cen­tral Com­mit­tee, China be­gan to im­ple­ment the house­hold con­tract re­spon­si­bil­ity sys­tem (HRS) and di­vide prop­erty rights of ru­ral farm­land into two lay­ers: The land is col­lec­tively owned by a ru­ral com­mu­nity, nor­mally a vil­lage, and us­age rights are held by an in­di­vid­ual house­hold that con­tracts a piece of land from the vil­lage. This change has re­sulted in im­pres­sive achieve­ments in grain pro­duc­tion.

How­ever, with the rapid de­vel­op­ment of in­dus­tri­al­iza­tion and ur­ban­iza­tion, many ru­ral res­i­dents have mi­grated to the cities and left their farm­land unat­tended. There has been a grow­ing de­mand from ru­ral res­i­dents to gain the abil­ity to of­fi­cially trans­fer their idle farm­land.

Since the 18th CPC Na­tional Congress, un­der the premise of ad­her­ing to the col­lec­tive own­er­ship of farm­land, the CPC Cen­tral Com­mit­tee has man­aged to sep­a­rate the con­tract and man­age­ment rights of the ru­ral farm­land, grad­u­ally form­ing a sys­tem for sep­a­rat­ing own­er­ship rights, con­tract rights and nd man­age­ment rights for con­tracted land, which was hailed as an­other ma­jor in­sti­tu­tional in­no­va­tion af­ter r the HRS.

The sep­a­ra­tion of the three types pes of rights al­lows farm­ers to re­tain the he con­tract right over their land and trans­fer only the man­age­ment right t if they choose to lease the land to oth­ers, which has greatly lib­er­ated farm­ers and im­proved the re­wards of land us­age. At present, more than an 30 per­cent of ru­ral house­holds have ve trans­ferred their con­tracted land, a to­tal of 31.93 mil­lion hectares.

The big change in the ru­ral land d

sys­tem has ac­ti­vated ru­ral re­sources, pro­moted the de­vel­op­ment of ru­ral en­ter­prises and boosted the ru­ral econ­omy.

How­ever, dur­ing the process, new prob­lems have emerged. For ex­am­ple, con­sid­er­able farm­land has been con­tracted for ex­ten­sive in­dus­trial and com­mer­cial use, caus­ing a ma­jor loss in arable land.

Fur­ther­more, the farm­ers’ land con­tract rights are not com­pre­hen­sive prop­erty rights with clear def­i­ni­tion. The land con­tract pe­riod is rel­a­tively short. In some places, farm­ers’ con­tracted lands are frag­mented and di­vided into dif­fer­ent plots, which is not con­ducive to land trans­fer and large-scale agri­cul­tural op­er­a­tion.

Ad­di­tion­ally, farm­ers’ idle res­i­den­tial land and houses in ru­ral ar­eas are not al­lowed to be trans­ferred to ur­ban res­i­dents, ex­cept for farm­ers with­out hous­ing in the same vil­lage, which has pre­vented some farm­ers from reap­ing ben­e­fit from their res­i­den­tial land.

When he presided over a sym­po­sium on ru­ral re­form in 2016, Chi­nese Pres­i­dent Xi Jin­ping, also gen­eral sec­re­tary of the CPC Cen­tral Com­mit­tee, called for more to be done to ad­vance ru­ral re­form, with the core work to prop­erly ad­dress the re­la­tion­ship be­tween farm­ers and land.

To solve prob­lems that have long plagued farm­ers, agri­cul­tural op­er­a­tion and in­dus­trial in­te­gra­tion, the re­port de­liv­ered by Xi to the 19th CPC Na­tional Congress an­nounced that ru­ral land con­tract­ing prac­tices would re­main sta­ble and un­changed on a long-term ba­sis. And the cur­rent round of con­tracts will be ex­tended for an­other 30 years upon ex­pi­ra­tion.

This im­por­tant de­ci­sion means that the ru­ral land con­tract­ing re­la­tion­ship will re­main sta­ble for a to­tal of 75 years from the first round of the con­tract, ev­i­denc­ing the cen­tral govern­ment’s strong de­ter­mi­na­tion to pro­tect farm­ers’ land rights and in­ter­ests.

The re­port also stressed that China would ad­vance the re­form of the ru­ral land sys­tem and im­prove the sys­tem for sep­a­rat­ing own­er­ship rights, con­tract­ing rights and man­age­ment rights for con­tracted ru­ral land, which is meant to ra­tion­ally op­ti­mize land re­sources by consolidating the ba­sic ru­ral op­er­a­tion sys­tem in such ar­eas.

With im­proved sep­a­ra­tion of the three types of rights, more land man­age­ment rights can be ac­ti­vated. Ru­ral col­lec­tive eco­nomic or­ga­ni­za­tions are pro­vided greater ac­cess to prop­er­ties that can be con­trolled, and all the peo­ple in­volved in ru­ral land con­tract­ing and man­age­ment have more de­fined roles to play.

By free­ing up man­age­ment rights such as land trans­fer, the re­form has laid a solid foun­da­tion and gen­er­ated great sup­port for at­tract­ing in­dus­trial cap­i­tal to ru­ral ar­eas, im­prov­ing man­age­ment ef­fi­ciency of the farm­land and in­creas­ing farm­ers’ in­comes.

In re­cent years, the cen­tral govern­ment has in­creased ef­forts towards the farm­land sys­tem re­form. For ex­am­ple, by car­ry­ing out pilot pro­grams for con­fir­ma­tion, regis­tra­tion, and certification of farm­ers’ rights to their con­tracted land, it aims to pro­tect farm­ers’ land rights, fa­cil­i­tate land trans­fer, pro­mote large-scale agri­cul­tural op­er­a­tions and im­prove the ef­fi­ciency of the agri­cul­tural econ­omy.

By the end of Septem­ber 2017, the land area that com­pleted right con­fir­ma­tion had reached a to­tal of 72 mil­lion hectares in China, ac­count­ing for 80 per­cent of the land area spec­i­fied in the se­cond round of the con­tract.

In ad­di­tion, the cen­tral govern­ment has cho­sen 33 re­gions to carry out trial re­forms on ru­ral land req­ui­si­tion, mar­ke­ti­za­tion of ru­ral col­lec­tive land des­ig­nated for com­mer­cial con­struc­tion and the sys­tem for man­ag­ing ru­ral res­i­den­tial land, aim­ing to ex­pand the land man­age­ment rights of ru­ral col­lec­tives and im­prove farm­ers’ earn­ings from their con­tracted land. Through th­ese ef­forts, the govern­ment will end the mo­nop­oly on the sup­ply of ru­ral con­struc­tion land, step by step.

Fur­ther­more, the govern­ment will also grad­u­ally abol­ish ex­ces­sive re­stric­tions on ru­ral house­holds’ rights to their res­i­den­tial land by al­low­ing ur­ban res­i­dents with cap­i­tal to co­op­er­ate with farm­ers to ex­pand uti­liza­tion of farm­ers’ res­i­den­tial land and houses, im­prov­ing the mar­ket value of farm­ers’ as­sets.

More than 16.7 mil­lion hectares of res­i­den­tial land can be found in China’s ru­ral ar­eas. By mak­ing op­ti­mal use of the reg­u­la­tory role of mar­ket mech­a­nisms, the new pol­icy will en­sure that land is used more ef­fec­tively.

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