Laws and regulations need to be revised to give them full property rights over the contracted land they work

Although over the years the central government has effectively protected farmers' rights and interests to use their collective rural land, it has failed to introduce practical measures to legally enable them to hold the property rights over contracted land.

Most of the problems related to rural land use are due to farmers' lack of full and legally protected property rights over collectively owned land. China places its rural land under collective ownership, giving farmers management rights over their contracted land and right of use over their homestead lots. Farmers have contracts granting them the right to use the land for 30 years, but it is difficult for them to negotiate for fair compensation when their land is requisitioned, because they don't have property rights. This has resulted in sluggish development of the rural land transaction market and hampered agricultural industrialization and large-scale farming. And while urban enterprises can acquire loans against their assets, the use of collectively owned land, such as arable land, plots for housing construction and self-preserved land, cannot be used as collateral for bank loans, which is tantamount to erecting a legal barrier to farmers acquiring bank loans.

In its bid to accelerate urbanization to tap domestic demand over the next decade and allow farmers to enjoy the dividends from the country's reform and opening-up, China should revise the relevant laws and regulations as soon as possible to give farmers property rights over the land they work. Enjoying such land rights will not only make it possible for farmers to move to cities with the gains they make from land sales, it will also help lubricate the transfer of rural land and promote agricultural industrialization and large-scale farm operations. Property rights over their contracted land will enable farmers to have a bigger say in the transfer of the land and enable them to use the courts to better protect their interests. Reforms of this kind have been piloted in Chengdu, Sichuan province, and neighboring Chongqing municipality. However, some malpractices have emerged. The country should try to legally correct these malpractices so that land-rights reforms can be effectively implemented nationwide.

The country should make further revisions to the related laws and regulations to ensure farmers enjoy the right to occupy, use and profit from their land in line with State laws. At the same time, practical measures should be taken to set up a unified urban-rural land market. To this end, the country should add to its current land management law a clause requiring local governments above county level to set up a unified urban-rural land market to promote a reasonable distribution of land resources through the market mechanism and provide a legal basis and systematic guarantee for the transfer of farmers' land-use rights.

Legislation should be drawn up to finalize long-term and stable land contracts, instead of the current 30-year tenure, as contained in the country's land management law. At the same time, some practical measures should be taken to simplify the current contracting and transfer procedures. Those signing land contracts should also be granted the power to determine their land contracts and transfers in accordance with related State laws and regulations. Such a practice, however, can only be based on the approval of more than two-thirds of villager representatives or members of the village committee

Current laws and regulations related to the compensation paid for land expropriations should be changed. For example, new stipulations should be made to ensure farmers are paid the market value of the land, rather than the current 30 times the land's annual agricultural output. At the same time, some social security compensation should also be paid if farmers' land is to be expropriated and no approval for such land requisitions should be given if such compensation is not provided.

In addition, the current legal restriction on the transfer of land use rights to secure loans should be removed to give farmers more access to funds to expand their economic activities.

The author is president of the China Institute for Reform and Development based in Hainan.

(China Daily 03/11/2013 page9)