The road of rural property rights trading grows ever wider
In the process of land circulation, what is most worrying? The state is most worried about farmland becoming “non-agricultural and non-grain”, farmers are most afraid of their interests being harmed, and transferees are most afraid that their management rights will not be guaranteed. In order to give the state, farmers, and transferees peace of mind, in recent years, Hubei Wuhan and other places have carried out beneficial exploration and practice in ensuring farmers' rights and interests and improving the construction of the land circulation market.
A few days ago, the reporter came to the Wuhan Rural Comprehensive Property Rights Exchange in Hubei. A large electronic display screen was looping information on the circulation of land management rights for dozens of parcels, and people were coming and going in the exchange. The Wuhan Rural Comprehensive Property Rights Exchange was formally established on April 30, 2009, and is one of the earliest comprehensive rural trading institutions established in the country.
The exploration of the Wuhan Rural Comprehensive Property Rights Exchange in promoting open, fair, and standardized operation of the circulation and trading of rural property rights such as land management rights has attracted attention.
Sunshine Trading
Yuan Huiwen is from Fengle Village, Cangbu Street, Xinzhou District, Wuhan. In his early years, he made some money in other industries. In 2006, he returned to the village and contracted more than 60 mu of “four wastelands” to develop crape myrtle and other nursery stock industries. Now Yuan Huiwen has become the chairman of Wuhan Haifan Ecological Agriculture Co., Ltd.
Yuan Huiwen introduced that last year, relying on the Wuhan Rural Comprehensive Property Rights Exchange, their company signed a circulation agreement with Fengle Village for more than 180 mu of wasteland. The process of signing the agreement was very standardized: Fengle Village held villagers' representative meetings many times to form resolutions, and at least two-thirds of the villagers' representatives signed in agreement; the company submitted a circulation application to the Wuhan Rural Comprehensive Property Rights Exchange, which was publicly announced for 5 days; the Wuhan Rural Comprehensive Property Rights Exchange issued their company a land circulation transaction verification certificate.
Before 2008, much of the land circulation in Wuhan's rural areas was based on oral agreements, which had no legal binding force. After the establishment of the Wuhan Rural Comprehensive Property Rights Exchange in 2009, Wuhan issued a document requiring that for 10 major categories of rural collective property rights, including all rural land contractual management rights in Wuhan, the right to use “four wastelands” of rural collective economic organizations, the contractual management right of aquaculture water surfaces of rural collective economic organizations, and the right to use forest land and ownership of forest trees of rural collectives, any circulation by transfer, lease, shareholding, mortgage, or other means must be listed and traded on the rural exchange. The Wuhan Rural Comprehensive Property Rights Exchange is composed of a three-level trading platform at the city, county, and district levels. In the project review process, circulation contracts must use a unified format and must be approved level by level.
“With the land management right verification certificate, I have an important basis for enjoying Wuhan's fiscal subsidies. The land management right verification certificate can serve as a circulation transaction voucher for changes in rural property rights, and can also be used as a rural land management right certificate for mortgage loans.” Yuan Huiwen said.
“Through rural property rights circulation and trading, farmers' property income has increased, the flow of rural resources has accelerated, the rural factor market has been activated, and rural collective assets have been revitalized. Through open, fair, and just sunshine trading, corruption is prevented at the source, and the interests of members of rural collective economic organizations are safeguarded.” said a relevant person in charge of the Wuhan Municipal Agriculture Committee.
Risk Control
In the process of rural property rights trading, farmers are the relatively disadvantaged party. How can risk prevention be done well, ensure that transactions do not violate farmers' wishes, and protect farmers' interests to the greatest extent?
Sun Xiaoyan, general manager of the Wuhan Rural Comprehensive Property Rights Exchange, believes that to do a good job in risk control for rural property rights circulation and trading, efforts must first be made in institutional construction and supervision and management. They stipulate that the circulation and trading of farmers' contracted land must be voluntarily transferred by the farmers themselves; the transfer of property rights of rural collective economic organizations must in all cases require the consent of more than two-thirds of the members or member representatives of the collective economic organization; the transfer of farmers' property rights must in all cases require full civil capacity, and farmers who circulate land contractual management rights for the long term are also required to have a stable source of livelihood and residence.
Today, land rents in some rural areas continue to rise. In order to ensure that the land rent obtained by farmers can continue to grow, the Wuhan Rural Comprehensive Property Rights Exchange has established a rent escalation mechanism during project approval. For example, in a land circulation contract signed in 2014 between Wuhan Haifan Ecological Agriculture Company and Fengle Village for 183.2 mu of wasteland, it was clearly stipulated that the circulation period was from January 1, 2014 to January 1, 2028, the price was 460 yuan per mu, increasing by 10% every 5 years.
In order to prevent poor business operations from affecting farmers' property rights and interests, the Wuhan rural operation and management department requires enterprises that circulate land to pay a risk deposit, amounting to 1 to 3 times the annual rent, paid in full at one time. Land rent and risk deposits are all uniformly deposited in the resource, asset, and capital supervision centers of Wuhan's city, district, and county levels. Once an enterprise cannot pay rent on time, the risk deposit is used to pay farmers' rent.
“Public announcement of rural collective property rights circulation and trading is an important means of ensuring open, fair, and just land property rights trading.” Sun Xiaoyan said, “When the rural property rights transaction price is lower than the base price of the subject matter, the property rights holder has the priority repurchase right; for transactions of rights or income distribution rights after rural land is converted into shares, the rural collective economic organization and farmers' professional cooperatives where the land is located have the priority purchase right; for the transfer of contractual management rights of rural collective economic projects, under equal conditions, members of the collective economic organization enjoy the priority purchase right.”
Sun Xiaoyan believes that rural land property rights trading is a new thing, and the Wuhan Rural Comprehensive Property Rights Exchange has encountered some difficulties and problems in its development, and still needs continuous exploration to solve them. First, existing laws, regulations, and policies are still not complete enough. For example, issues such as how land management rights can be circulated a second time have, to a certain extent, restricted the flow of rural property rights; second, at present, it is difficult to confirm the rights of many rural property rights, and progress is slow, and the legal status of land management rights needs to be further clarified; third, there are difficulties in mortgage financing, rural assets lack professional appraisal institutions and appraisers, and industry standards for agricultural appraisal have not yet been established.
Institutional Innovation
Liu Aihua, who is engaged in aquaculture, established the Wuzhou Aquaculture Professional Cooperative in 2010 and leased more than 1,000 mu of wasteland in Songzui Village, Cangbu Street, Xinzhou District. During operations, funds were short. With the rural property rights circulation transaction verification certificate for more than 1,000 mu of wasteland, Liu Aihua applied to a bank for a mortgage interest-subsidized loan. On the first application, he obtained a 10 million yuan mortgage loan, with a 50% fiscal interest subsidy. After receiving the loan, Liu Aihua carried out bold renovation of the fish ponds.
As of the end of April, the Wuhan Rural Comprehensive Property Rights Exchange had conducted a total of 2,169 property rights transactions, with a transaction amount of 12.727 billion yuan, and, together with financial institutions, provided 1.974 billion yuan in mortgage loans to agricultural enterprises, cooperatives, and large planting and breeding households, of which the highest single amount reached 200 million yuan.
The benefits of mortgage financing based on land management rights are obvious, but some people worry whether it will create a risk of farmers losing their land. A relevant person in charge of the Wuhan Municipal Agriculture Committee believes that because what farmers circulate in land circulation is only the management right of the land, the ownership of the land itself and the attribution of various interests attached to it have not changed, so mortgage loans using land management rights as collateral will not cause farmers to lose their land. Moreover, in actual operation, the mortgage of rural land management rights must obtain the consent of the land owner and the original contractor, the mortgage term is within the circulation period, and at the same time the term of the land management rights obtained by the mortgagee should be more than 5 years, and as of the date of the credit mortgage, the remaining term should be no less than 1 year.
“In order to control the risk of rural property rights mortgages, the Wuhan Rural Exchange has brought in guarantee companies to provide guarantees for financing entities when collateral is insufficient. At present, Wuhan is organizing relevant departments to study systems such as risk compensation, and to study measures such as relying on agricultural investment companies to establish policy-based asset management companies to dispose of land and non-performing assets where operational risks have occurred.” said a relevant person in charge of the Wuhan Municipal Agriculture Committee.