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of long-term leases, usually 70 years,
that are typically tradable. Agricultural
land leases, typically 30 years, for individual
farms are administered by village
committees.
These factors mean the state—
or local governments acting on its
behalf—is directly responsible for land
conservation. The central government
in Beijing has ordered local governments
to strictly limit the rezoning of
agricultural land for urban purposes,
but the policy is hard to enforce. Local
governments have a strong financial
incentive to acquire agricultural land
for development, as they can cash in
on the huge difference between the
compensation price and the rezoned
property’s commercial value.
In the absence of private land ownership
and rural land markets, farmers
tend to get the short end of the stick
in the rezoning of their land for urban
purposes. The regulated compensation
price is calculated as the present value of
future agricultural income. The lack of
legal recourse against the acquisition
of farmland for urban development,
together with inadequate compensation,
is probably the most important
source of thousands of often violent
rural protests in China every year.
In response to those problems, some
cities have begun to experiment with
different compensation methods—for
example, giving farmers shares in
companies that will use their land for
commercial projects, such as shopping
malls or apartment complexes.
In the long run, China may return
to a system of private land ownership,
but—though much debated in
academic circles—it remains a highly
charged subject, and no major changes
are expected anytime soon. The issue
of land ownership is so controversial
in China because the Communist
revolution was based, in part, on the
redistribution of large land holdings to
the many millions of landless farmers
20 SAISPHERE
who worked for landlords, often under
conditions of semi-serfdom.
The nearest thing to private ownership
of agricultural land that might
occur is the conversion of long-term
leases into lease contracts of indefinite
duration, combined with full tradability
of user rights and the use of agricultural
land as collateral for bank loans.
A 2008 State Council decision made
that possible in principle, but there has
been no legislative follow-up. Unlike
India, China has few landless farmers;
a return to private land ownership
could re-create conditions that force
many farmers to sell their land to large
landowners.
To increase the supply of agricultural
land and permit the consolidation
of small plots into larger, more efficient
farms, Chongqing and other cities
with significant farmland within their
municipal boundaries are bulldozing
rural village compounds. The cities
house the villagers in urban apartment
complexes while issuing them,
as part of the deal, an urban hukou
to improve their access to subsidized
Unlike India, China has few landless farmers; a return to private
land ownership could re-create conditions that force many
farmers to sell their land to large landowners.
urban services. This can be a source
of enormous friction between farmers
affected by such policies and the local
authorities. China also is trying to
expand its agricultural or grazing land
through land reclamation. The result
of all efforts combined is that the net
loss of agricultural land in recent years
was zero.
China’s rural transformation has
progressed far since the late 1970s but
will not be complete until all agricultural
surplus labor has been absorbed in
alternative, higher-productivity activities;
landowner and land user rights are
secure; and the composition of output
has adjusted to the principles of comparative
advantage, as envisaged under
the World Trade Organization. n
Pieter Bottelier is senior adjunct
professor of China Studies.
Is
Agri
Despite the
emerging
consensus on the
need to
support
agricultural
development, the
question of how
to do so remains
controversial