New Round of Rural Reform Puts Collective Property Rights Reform First, Farmland Market Entry Postponed
The "Comprehensive Implementation Plan for Deepening Rural Reform" (hereinafter referred to as the "Plan") promulgated at the end of last month once again pushed a series of related rural contradictions and problems to the forefront of reform and development.
In recent years, the Ministry of Agriculture, the Ministry of Land and Resources and other departments have successively introduced a series of rural reforms related to farmland transfer, collective asset share reform and collective land market entry. The above-mentioned "Plan" actually plays a comprehensive guiding and directing role for these rural reforms. In the words of Chen Xiwen, deputy head of the Central Rural Work Leading Group and director of its office, "it mainly clarifies the major principles and basic direction of rural reform, draws clear bottom lines, and resolves the coordination among various reforms in all aspects of rural areas."
An expert close to the Ministry of Land and Resources told Economic Observer that in the current rural reform, and even in the entire "three rural" reform, the most concentrated and complex contradictions are mainly issues of land reform, such as collective construction land market entry, farmers' homestead rights, disposal of small property rights housing, cultivated land ownership, contract rights, and management rights under the "separation of three rights." Between the central and local governments, as well as among some experts, there are still relatively large differences.
Domestic economists Wu Jinglian, Li Yining, Zhou Qiren and others are all extremely concerned about the land reform issue. Wu Jinglian publicly stated in May this year that at present, the relevant parties' explanation of the "separation of three rights" for farmland is not clear enough, causing many people to understand it differently; Li Yining has also said many times that farmers should be issued property ownership certificates as soon as possible. After farmers have property ownership certificates, their properties can be transferred, mortgaged, etc., and farmers' houses will appreciate. This is also conducive to solving the problem of many vacant homesteads in farmers' homes; Zhou Qiren believes that the current "half-finished" land reform project has already caused many problems and created great challenges for social management, and deeper reform must be carried out.
It is worth noting that the "Opinions on the Pilot Work of Rural Land Expropriation, Market Entry of Collective Operating Construction Land, and Homestead System Reform" issued by relevant parties at the end of last year is a policy land reform document that the industry is extremely concerned about. The Ministry of Land and Resources and other parties have already carried out pilot reform for more than 10 months in 33 county-level units across the country, but so far, the document has not been made public. In the "Plan," the main contents of the document and the progress of the 33 pilot reforms all appear in "omitted" form.
Collective Property Rights Put First
The above-mentioned "Plan" makes clear that at present and for a period to come, deepening rural reform mainly focuses on 5 major areas: the rural collective property rights system, the agricultural operation system, the agricultural support and protection system, the institutional mechanism for integrated urban-rural development, and the rural social governance system.
Why is reform of the rural collective property rights system placed first? Chen Xiwen explained that the main body of rural China is the rural collective economy, and reform of the rural collective property rights system is closely related to the vital interests of more than 900 million farmers.
Of China's entire land area, about 46% is owned by rural collectives, including more than 2 billion mu of cultivated land, as well as rural collective construction land. For example, township enterprise land and farmers' homesteads belong to collective construction land.
According to the above-mentioned expert close to the Ministry of Land and Resources, the main existing problem regarding cultivated land is that there is relatively large controversy over the "separation of three rights" of farmers' contracted land. The so-called "three rights" refer to the ownership, contract rights, and management rights of farmland. This formulation appeared in the "Opinions on Guiding the Orderly Transfer of Rural Land Management Rights and Developing Moderately Scaled Agricultural Operations" (hereinafter referred to as the "Opinions") issued by the General Office of the CPC Central Committee and the General Office of the State Council on November 20 last year.
However, before the "separation of three rights" policy was introduced, China's farmers' contracted land implemented the "separation of two rights," namely the "separation" policy of collective land ownership and farmers' contracted management rights. In the transition from the "separation of two rights" of farmers' contracted land to the "separation of three rights," the above-mentioned "Opinions" stated that this is for the confirmation and registration of farmers' contracted land rights and orderly transfer, ultimately achieving moderately scaled agricultural production and cultivating new agricultural operating entities such as large grain growers and family farms, that is, safeguarding the country's food security.
Some experts' controversy over the "separation of three rights" mainly focuses on the ownership issue of farmers' contracted land. One view holds that farmland ownership should be returned to farmers; another view holds that the rural collective ownership system should continue to be upheld, and the ownership of farmers' contracted land should belong to the collective.
Wu Jinglian's view is consistent with the latter. He believes that under the current land reform policy, what is transferred for farmland is management rights, but some interpreters of the "separation of three rights" policy have not explained clearly or consistently how the "three rights" are separated, thus causing differences in understanding among many people.
Farmland Market Entry Proceeds Slowly
The above-mentioned expert close to the Ministry of Land and Resources told Economic Observer that at present what the industry is most concerned about is not the transfer of farmers' contracted land, but collective construction land. Some economists believe that the pace of rural collective construction land market entry is too slow and the reform intensity is too small, which will cause many problems.
Rural collective construction land is divided into two major categories: operating and non-operating. Farmers' homesteads are non-operating collective construction land, while township enterprise land is operating collective construction land. At present, according to data held by the Ministry of Land and Resources and other parties, the total area of farmers' homesteads nationwide is about 170 million mu, and the land occupied by township enterprises nationwide is about more than 40 million mu. The pilot land reform in 33 county-level units that began this year mainly targets township enterprise land nationwide. Only this part of farmland is allowed to enter the auction market, and a precondition has also been set -- it must comply with the Ministry of Land and Resources' land planning and use control.
As for farmers' homesteads, the current requirement for the 33 land reform pilot sites is that each farmer household may have only one homestead. The transfer of the right to use farmers' homesteads must also be limited to villagers of the same village, and urban residents are strictly prohibited from buying land and building houses in rural areas.
According to the above-mentioned expert close to the Ministry of Land and Resources, in fact, since 1999, in more than 20 provinces (autonomous regions and municipalities) including Wuhu in Anhui and Suzhou in Jiangsu, many breakthrough farmland transfer reforms have been carried out, including in the transfer of farmers' homesteads, and some places have even issued policies and regulations on collective construction land transfer. However, these have basically been difficult to gain recognition from the national land authorities.
Zheng Zhenyuan, former deputy director of the Planning Department of the former National Land Administration Bureau, told Economic Observer that judging from the current progress of the 33 land reform pilot sites, the pace of reform is not fast, and the results and experience obtained are extremely limited. In this "Plan," related land reform policies were "omitted," and the progress of the 33 land reform pilot sites was not mentioned. Basically, it can also be seen that the Central Rural Work Leading Group Office, the Ministry of Land and Resources and other parties are still in a state of strictly controlling risks and closed management regarding collective land market entry.
The above-mentioned expert close to the Ministry of Land and Resources analyzed and stated that in addition to rural cultivated land and collective construction land, rural collective assets also include village-run enterprises, village-run primary schools, village-run clinics, etc. The total book value of this part of rural assets nationwide is about 3 trillion yuan. In the next step of rural collective property rights system reform, this part of the assets will be "converted into shares and quantified," with ownership clearly belonging to the village collective, and farmers will truly become "shareholders" of the village collective.
In the market entry of collective construction land and the shareholding reform of rural collective assets, the issue of how to dispose of small property rights housing will be involved. Therefore, relevant parties have also adopted a strategy of pilot first and strict risk control for the share reform of rural collective asset property rights. As early as May this year, the Ministry of Agriculture and other parties issued the relevant share reform plan to 29 cities (counties, districts), but to this day, the plan and the list of pilot cities (counties, districts) have not been made public.
The above-mentioned expert close to the Ministry of Land and Resources added that the deadlines for the relevant pilot market entry of rural collective land, the pilot homestead reform, and the pilot share reform of rural collective asset property rights are all by the end of 2017. This means that the amendment of the "Land Administration Law" will also be postponed until two or three years later.
The Real Goal of Reform
Chen Xiwen interpreted the "Plan" at a press conference held by the State Council on November 4.
In addition to emphasizing reform of the rural collective property rights system, he also provided in-depth interpretation of current issues such as grain regulation and agricultural subsidies. These are all closely related to the reform of the agricultural operation system, the agricultural support and protection system, and the institutional mechanism for integrated urban-rural development proposed in the "Plan."
Regarding the sharp decline in grain prices such as corn and wheat since the second half of this year, Chen Xiwen analyzed that domestic grain now shows a "simultaneous increase in three quantities" of production, imports, and inventory, and domestic and international grain prices are seriously inverted, making the situation in the domestic grain market very complex. One main reason behind this is that reform of the grain price support policy has lagged relatively far behind. The current minimum purchase price and temporary storage purchase price for grain both combine price and subsidies together. In the next step, following the idea of "separating price from subsidy," the grain purchase and storage policy will be improved, subsidy methods will be perfected, and excessive government intervention will be avoided as much as possible.
Jiao Shanwei, president of the Yida Research Institute of China Grain Network, analyzed to Economic Observer that after implementing the "separation of price from subsidy" policy, farmers will sell grain at market prices. If the market grain price is low, the government will directly subsidize farmers. This is also the grain "target price" reform currently being advanced. The advantage of the "target price" policy is that the grain price formation mechanism is close to the market, while also protecting farmers' reasonable interests.
Regarding the question of "who will farm the land" that many people are currently worried about, Chen Xiwen said that the average age of farmers farming the land in Japan is now 67, and there are still more than 600 million people living in rural areas in China. Relying on this group to farm the land, "age and gender are not the main obstacles." The key is to gradually cultivate professional farmers, and also to develop moderately scaled agricultural operations and agricultural socialized services.
Han Jun, deputy director of the Central Rural Work Leading Group Office, also does not worry too much about the question of "who will farm the land." Earlier this year, the Central Rural Work Leading Group Office conducted a national survey in Jiangsu Province, and 5%-6% of university students were willing to return to rural areas to farm. He said, "I was quite pleasantly surprised to see this figure."
Jiao Shanwei also said that there are currently more than 70 agricultural universities nationwide, and each year they cultivate a large number of agricultural university students. In the future, this group of highly educated talent can become specialized and professional farmers, and can gradually develop new agricultural operating organizations such as large grain growers and family farms in full accordance with mechanized, scientific, and factory-style management techniques.
Regarding reform of the agricultural operation and protection system, what Economic Observer learned is that the central government's annual expenditure on the "three rural" issues is currently about 1.5 trillion yuan. In the next step, one main line of "three rural" policy is "give more, take less, and loosen control," and the intensity of "giving more" to farmers and rural areas will become greater and greater. The recently announced recommendations for the "13th Five-Year Plan" also clearly proposed continuously increasing investment in agriculture and improving the agricultural subsidy system. These are all new policy signals of central support for the "three rural" issues.
Regarding reform of the urban-rural integration system, Han Jun's interpretation is that one of the most difficult tasks proposed in the "Plan" is to advance the process of turning migrant workers into urban residents in the future, and to advance people-centered urbanization. The above-mentioned expert close to the Ministry of Land and Resources further analyzed that the recommendations for the "13th Five-Year Plan" already contain new and specific statements, roughly meaning that migrant workers who meet basic conditions, along with the agricultural transfer population and their family members, should be allowed to settle in cities, so that these migrant workers can live a decent life like urban residents.