What Are the Institutional Dilemmas of Farmland Transfer? A Detailed Explanation

I. Brief Overview and Research Perspective

From the perspective of new institutional economics, existing studies on the institutional factors affecting farmland transfer have mainly been carried out in the following aspects: farmland property rights, farmland legal system, rural social security system, and farmers' rational choice. For example, Zhou Rongji (2004) argued that the relatively ambiguous collective property rights gave rise to the "alienation phenomenon" in farmland transfer (the government competing with the people for profits), producing a "principal-agent paradox"; Chen Cheng (2005) took the distortion of land prices under ambiguous property rights as the main reason why the land market mechanism is difficult to realize. In research on the farmland legal system, Ding Guanliang (2003) held that the underdeveloped laws safeguarding farmland transfer cause conflicts between the laws protecting farmland transfer and the laws on lawful recovery or adjustment by the state, reducing transfer performance. In research on rural social security, Yao Yang (2000), in his analytical framework on the farmland system, argued that it is precisely because Chinese farmers' non-agricultural income is currently low that the corresponding economic value-preserving function of farmland enhances farmers' risk resistance, leading to difficulties in farmland transfer; Geng Yongzhi (2010) argued that the national rural land system should be incorporated into the elements of the national adjustment of the rural social security system, and that unless the rural social security problem is solved, it is very difficult for farmers to give up the land in their hands. Farmers' spontaneous choices and willingness have also become a focus of many scholars' research on farmland transfer. Zhong Zhangbao, Chen Xiaowu, and Wang Xulang (2007), through their classification of farmers into three types in farmland transfer, pointed out that farmers guide their behavior in farmland transfer precisely on the basis of their own "bounded rationality," hoping to obtain the policy arrangements most favorable to themselves; Zhang Letian and Lu Yang (2011), through field research on land transfer in Village Z in Zhejiang Province, argued that the rural order formed over a long period, including community consciousness and the sense of human relations, influences farmers' behavioral choices in land transfer at every moment.

Most of the above related studies start from the construction of a single external institution involving the farmland system, and each provides a relatively full explanation of the institutional obstacles to farmland transfer within its own field. However, the adjustment of the farmland system involves many stakeholders (the government, collectives, farmers, and market organizations), and the institutional obstacles to farmland transfer are not isolated external institutional dilemmas, but the result of the combined action of a series of external formal institutions and farmers' subjective informal institutions in an integrated, multi-level set of obstacles. The reason Coase is hailed as the founder of new institutional economics is that he proposed the foundation on which this school relies for its establishment: transaction costs. This creative theory solved the question of the different performances of different institutional constructions in an environment of positive transaction costs. This paper attempts to use the "institutional dichotomy" under the perspective of new institutional economics as a tool of analysis, run the theoretical principle of transaction costs through the whole text, and strive to comparatively systematically expound the subjective and objective factors of the institutional dilemma. It is hoped that in the further transformation of the farmland system, informal institutions such as farmers' subjective "rationality" will be included in the scope of top-level design considerations, so as to achieve "incentive compatibility" between farmers' wishes and the legal text.

II. Formal Institutional Dilemmas

(1) "Predation" Is More Effective: The Government's Unlimited Definition of the Extension of "Public Interest"

China is a socialist country under the people's democratic dictatorship. The state form of the people's democratic dictatorship and the rigid ideology of public ownership determine the characteristic of giving priority to collective interests. Land is the mother of wealth. As the most basic factor of production in agricultural production, agricultural land is of decisive significance for safeguarding national food security and even for consolidating the Party's ruling position. The society idealized by Marxism practices public ownership of land, and farmland is naturally no exception. China's Constitution stipulates that land in cities belongs to the state, and land in rural areas and suburban areas belongs to collectives except as otherwise provided by the state. In addition, it is stipulated that the state may, for the needs of public interest, expropriate land of rural collective economic organizations according to law. The "dual land ownership system" legally strengthens the asset specificity of land to the state.

In the discourse system of new institutional economics, the state is naturally confined to a constitutional democratic polity and understood as a grid of principal-agent relations between voters as principals and their representatives [1](P355). Although China does not adopt Western democratic polities such as Western representative systems, the Chinese Communist Party, through its own actions in the eras of revolution and construction, fulfilled its revolutionary promises so that the masses sincerely granted the CCP the right to govern, which to a certain extent is also a people-as-principal and party-as-agent relationship pattern. Local governments at all levels, as constituent parts of the central government, can serve as rights principals vis-a-vis those above; and vis-a-vis those below, they deal directly with the masses and are also the masses' agents. This dual role of local government as both agent and principal greatly encourages its own opportunistic behavior in the process of farmland transfer.

After reform and opening up, the Party's focus shifted to economic construction. Whether viewed from the performance outlook of local government leaders or from the promotion of local economic development, local governments, as "boundedly rational," have made the pursuit of performance an appeal in economic growth. In China's land institutional arrangements, local government land and resources departments are granted actual authority to supervise land transfer. Based on the contract principle and the predation principle stemming from the state [1](P534), local governments have two ways to obtain farmland revenue:

1. The contract principle: the government is the protector of a series of economic contracts in society (farmland transfer contracts are no exception), and the government uses its own force and justice to obtain legitimate income. [1](P534) Specifically, the government should have provided convenience for the transfer of farmland contractual management rights, promoted the activity of the transfer market, charged reasonable intermediary fees on the basis of realizing the rational allocation of farmland resources, and enjoyed part of the surplus brought by the growth of agricultural value after the productive potential of farmland is efficiently brought into play. But transaction costs are everywhere in society. For local governments, local state organs possessing seemingly unlimited coercive power are in fact helpless before well-established institutions. Strong centralization makes local governments extremely cautious in institutional innovation concerning farmland transfer; any slight carelessness in institutional innovation involving farmland property rights entails great political risk; the institutional implementation of farmland transfer not only requires local governments to do the work personally, but designing a perfect farmland system requires coordination and cooperation among multiple levels and departments of government organs, which is costly for China's state organs flooded with departmentalism; even if a successful transfer system increases the surplus of the whole society, a local government as a rational economic actor demanding as much surplus as possible would face enormous pressure from public opinion, so that what it hopes for cannot be obtained, which to a certain extent weakens the enthusiasm of local governments to participate in institutional construction and protection.

2. After believing in the contract theory seems to yield more loss than gain, the "predatory government" seems "more effective." From the viewpoint of new institutional economics, in fact the state, as a "discriminating monopolist" [2](P193), will set different property rights systems in a targeted way from the angle of maximizing its own interests. Under public farmland property rights arrangements, for individual farmers, obtaining limited use rights is the greatest welfare. Collectives, as economic entities, also have no right to freely buy and sell land in the collective's name, and can only participate in claiming interests through the "one-way" upward transfer of land via state expropriation. Local governments often rely on this narrow channel of farmland entering the market, use the extremely strong asset specificity of land, and use the signboard of "public interest" to actually obtain monopoly transfer fees. Moreover, because China's market legal system is unsound, the behavior of local governments is not substantively constrained, and for individual farmers to realize their legitimate interests through litigation, petitions, and other means is extremely costly. In the actual process of farmland expropriation, local governments often join forces with judicial power to carry it out coercively. The extensive and simple commodification of farmland is obviously more cost-saving for the government than comprehensive institutional construction.

(2) The Underdevelopment of the Farmland Transfer Market Has Led to High Transfer Costs

The market is the economic venue for realizing the optimal allocation of resources. A sound and complete farmland transfer market system can fully realize the value of farmland, improve the matching mechanism for farmland efficiency, and increase farmers' property income. However, for a long time, China's land system has often focused on the ownership management of farmland in kind and has failed to fully recognize the economic benefits of farmland transfer. The limited farmland transfer market led by state administrative power has not yet formed a genuine farmland transaction price mechanism, cannot fully realize the economic value of farmland, and the underdeveloped farmland market has caused single transaction costs to remain high.

First, the lagging development of farmland intermediary organizations directly increases farmers' information search costs. As a factor of production whose value is strongly determined by natural endowment, farmland with widely differing soil fertility contains enormous value differences. The essential requirement of farmland transfer is to maximize the realization of the value of farmland of different fertility levels. To realize market-based transactions of farmland use rights and their ancillary rights and interests, both parties to the farmland transfer must search for suitable trading partners. The transferring party must spend considerable costs to realize its transfer intention; to maximize its own interests, it needs to compare price information offered by several potential contracting parties; after finding suitable trading partners, bargaining between the two sides based on their respective information channels is unavoidable. At the same time, because of the frequent information asymmetry between the two parties, the externalities of inefficient transfer have to be passively internalized into costs.

Second, the role positioning of the regulatory government has not yet changed. As a publicly owned factor of production, land is granted by the Constitution to the government complete rights of land disposal and supervision. "Benefiting" from the strong-government model under the planned economic system, the construction of a service-oriented government at the present stage is a long and arduous task. On the one hand, the state's reform of agricultural land has just started, and at the same time the profit-seeking nature of capital is all eyeing this huge cake of agricultural land. The government's cautious attitude and effective monitoring of farmland transfer in the early stage of reform are legitimate means of safeguarding farmers' rights and ensuring national food security; on the other hand, strengthening public land ownership also, to a certain extent, strengthens the government's monopolistic control over land. For the state, urban land unconditionally belongs to the state, and rural land nominally belongs to rural collective economic organizations, but because it holds the key of being the only channel for farmland conversion, the government in fact still controls the fate of farmland. This is the "North Paradox" in the field of farmland transfer. Whether the government, out of good intentions, sets cumbersome procedures to monitor farmland transfer, thereby increasing the costs of both parties to the transaction, or, out of profit-seeking "rationality," controls the farmland transaction market through institutional arrangements favorable to itself, both curb the development and growth of the farmland transfer trading market.

(3) Rural Cadres: The Opportunism of Land Agents

China's rural areas are grassroots social organizational units developed by farmers on the basis of geographical and kinship relations and later recognized by the state's formal institutions. Very different from state government organs, the villagers' committee, as the leading body at the village level, is elected by all villagers and is a product of China's direct democracy; village cadres represented by the village committee director, as agents of all the village's voters, independently decide village affairs without state intervention (in theory). This method of electing cadres, which weakens administrative appointment, determines a somewhat personal flavor in the process of village cadre elections. Economically, because the village controls the most important economic resource, land, and creates tangible welfare for villagers, the foundation of grassroots mass autonomy is manifested. But at the same time, China's rural areas are what is called "local state corporatism" (Oi, 1995). Corresponding to the relatively free power of village land disposal, the Party's influence in rural politics is very active [3](P307). Based on the value consideration of collectivism and the ruling outlook of pursuing common prosperity, the Party has an objective need to sacrifice the small-self interests of rural areas and let them give way to overall interests. Constrained by the legal obstacle of mass autonomy, using village cadres who are Party members to make up for the absence of government will has become a very good choice. Collective economic organizations possess relatively independent means of production, namely farmland; workers within the system, namely farmers; and agents influenced by state will yet possessing a certain autonomy, namely village cadres. Such an economic form possesses to a certain degree the characteristics of state-owned economic organizations. Village cadres, as two types of special agents for farmers and land, naturally have two sets of opportunistic motives:

1. Political Opportunism in the "One-Way" Transformation of Ownership

The state and collectives are the two ownership subjects of land in China, and state law stipulates measures for implementing the conversion of collective land to state ownership under certain conditions. Although the state may also allocate state-owned land as farmland, this does not change the ownership attribute of state-owned land, and the state retains the right to recover it at any time. This has caused the one-way transformation of farmland ownership, that is, it can only be transformed from collective ownership to state ownership. In the process of state expropriation of farmland, as a "rational" collective, for the sake of "public interest," it always hopes to obtain the expropriated farmland at the statutory standard price or even at a low price, while farmers, based on the same rationality, use collective ownership as a bargaining chip, intending to raise the compensation standard or even make exorbitant demands. In this game between officials and the people, the identity of village cadres is awkward on both sides. On the one hand, as elected cadres, they must fight for the people's interests; on the other hand, as members of the Party organization, they have the responsibility to assist higher-level organizations in doing grassroots work well. When local governments encounter difficulties in handling farmland expropriation, they often use the serious discipline of the ruling party to pressure village cadres, and some local governments even link land expropriation to village cadres' personal political prospects. At this time, village cadres as individuals often submit to the former between powerful organizational pressure and the villagers' hoped-for wishes, because being cursed by the people is always more worthwhile than affecting one's own and even one's family's political opportunities. Village cadres, who should represent the people's interests, often become the vanguard of the government in forcing down land expropriation prices, and such cases have been too numerous to enumerate in recent years. Such political opportunism directly lowers the value of farmland and farmers' psychological expectations, and in turn the continuously declining psychological expectations reduce the willingness to transfer, strengthening the difficulty of transfer in both respects.

2. Economic Opportunism in the Operation of Farmland Transfer

In farmland transfer, whether it is government-promoted transfer of farmland ownership or transfer of contracting rights and use rights at the nongovernmental level, collective income is the core interest of villagers. On the one hand, Chinese law stipulates that collectives may control 5% of collectively owned cultivated land, and during the process of farmland conversion to non-agricultural use, collectives enjoy the right to retain and use income. The land income of village-group collectives in land conversion to non-agricultural use mainly comes from the retention of land compensation fees and compensation for public cultivated land not contracted under responsibility. In China's rural production and operation relations, the village collective is the actual owner of China's rural cultivated land and the formal subject of state governance. [4] How the income from non-agricultural collective farmland transfer is used involves completely asymmetric information between the broad masses of villagers and village cadres; because collectively directly managed farmland has no direct interest relationship with individual farmers, and because the broad masses of farmers are also negligent in supervision beforehand, it is no longer rare for potential contractors of collective farmland to obtain directly managed farmland at low prices through bribery and other means. Even afterward, because the village's bottom-up governance function has weakened, the cost for farmers to supervise village cadres in reasonably and lawfully disposing of collective land is extremely high, and village cadres' self-interested motives lack constraint, greatly reducing transfer efficiency.

III. Informal Institutional Dilemmas

Formal institutions can fully play their role only when they are recognized at a broader social level and only when they are compatible with certain informal institutions. This is an important viewpoint of the new institutional economics school. China's market-oriented farmland transfer market is still underdeveloped. On the one hand, this stems from an unsound rigid land transfer system; on the other hand, informal institutions such as the rural kinship order, ideological inertia, and "land attachment" complex of Chinese farmers, who are more strongly imbued with rural flavor, also shackle the driving force of farmland transfer.

(1) Farmers' Rural Order in a Society of Acquaintances

First, viewed from grassroots rural areas, the proposition that "Chinese society is rural in nature" [5](P1) is still accurate. In institutional arrangements for farmland transfer involving economic egoism, the "economic man" hypothesis on which traditional Western economics research relies for its establishment has great limitations in China's rural relationships. Related studies have shown that in contemporary China, even in areas where the farmland transfer market mechanism works best, nearly 90% of farmland is transferred between acquaintances. [6](P121) This shows that in China's farmland transfer market, informal institutions such as blood ties and neighborly feelings built on a society of acquaintances and rural villages have a great offsetting effect on written transfer institutions and the market. As individual subjects of nongovernmental farmland transfer, Chinese farmers, because of the relatively ambiguous property rights attributes of farmland, often embed social factors of rural neighborly ties into purely economic transaction activities involving farmland transfer. Many farmland transferring-out households do not seek transferees purely for greater transfer income, but based on the simple traditional idea that "fertile water should not flow into others' fields," transfer at low prices to relatives, old friends, and fellow villagers. This rural order weakens the motivation of both parties to comprehensively obtain market information, farmland cannot achieve the maximum potential of value stimulation, and the construction of a purely market-oriented transaction mechanism remains a long and arduous task.

Second, the rural order weakens the spirit of contract. The underdeveloped farmland transfer is not only "thanks" to relatively ambiguous property rights arrangements, but also to the solidification of the rural order. A contract is the embodiment of legal and credit relations in economic connections among members of a modern economic society. The signing of a contract defines the scope of an economic community of a group of people, and this community is established on the principles of equal status and mutually beneficial economic outcomes. In Western society, blood ties, geographical ties, and rural sentiment are all filtered out before contracts; a piece of contract is simply an economic relationship, whereas nongovernmental land transfer agreements in China are "situational contracts" [7], and transfer contracts filled with personalization are different from Western contracts that follow rigorous legal provisions; they are highly elastic legal texts built on the rural order. In such transfer contracts, a set of hidden rules of a "society of acquaintances" is implied within the legal terminology carefully scrutinized on the surface. (1) These hidden rules continuously increase the motivation of the broad masses of farmers to breach contract afterward when the transferred farmland generates enormous value-added benefits; as fellow villagers and relatives on the contracting side, they will also generally choose to return the contract and supplement payment to settle the matter based on the rural order and neighborly feelings. Although institutional arbitration and even litigation can be adopted to maintain the integrity of the contract, the immediate economic costs and even the afterward "good-neighborliness" emotional costs of doing so must be considered. When the Western spirit-of-contract text is interpreted with the mindset of China's society of acquaintances, and flexible informal institutions are paired with rigid formal institutions, it is not surprising that farmland transfer agreements are greatly discounted.

(2) The Shackles of Ideological Inertia on Farmland Transfer

China's land ownership system, through the widely carried out land reform after the founding of New China, realized the transformation from landlord private ownership to individual peasant private ownership, and then, out of consideration of ideological principles, through the vigorous agricultural collectivization movement, the private ownership of land was recovered and has remained so to this day. In the twenty years after the basic completion of agricultural collectivization in 1956, storm-like movement-style revolutionary education changed traditional farmers' small-owner consciousness, and compulsory ideological education reminded farmers at every moment: any individual attempting to possess means of production is a petty bourgeois and must be overthrown. This highly centralized "return to the public" ideology, day after day for decades, eroded the small peasant's dream of possessing "one mu and three fen of land." This cheap supply of "public ownership" ideology had an enormous impact on farmers. [8](P57) Since entering the new period of reform and opening up, this ideological inertia still exists in farmers' hearts: obeying this established convention does no harm to oneself.

As rational economic actors, small peasants are no less skilled at careful calculation than successful entrepreneurs (Schultz, 1987). Related studies have shown that even if the state grants farmers sufficient rights to income, transfer, and so on, most farmers still have many misgivings about ownership and still regard farmland over which they have considerable operational decision-making power as entirely the state's. [9] This sentiment holds that the state has the right to recover cultivated land at any time, which affects their motivation for long-term investment in soil fertility. Based on the selfish view that "it is someone else's land, so there is no loss in farming it," their development of the land is often eager for quick success and instant benefits, focusing on short-term interests. This development intensity, which focuses only on short-term interests and drains the land like draining a pond to catch all the fish, causes a decline in the marginal efficiency of soil fertility. If they farm it themselves, within the limited contract period, output decreases year by year; and because of the relatively poor output performance, such land will not fetch a good price on the transfer market, affecting the contracting party's desire to contract.

In addition, the contradiction between the increasing scarcity of land and the year-by-year growth of population is irreconcilable. The state guarantees that land contractual management rights remain unchanged for 30 years in order to stabilize farmers' stable expectations regarding farmland use rights and encourage farmers to continuously invest in land to maintain marginal productivity. At the same time, ideology requires that the ruling party's ruling ideal is to strive for the welfare of all the people. In order to safeguard the fair land rights of the newly added rural population, the state has also granted rural collectives appropriate power to adjust land. This policy contradiction leads to the relatively widespread unlawful transfer of land by farmers in private, and oral contracts with no guarantee are extremely fragile when facing conflicts of interest.

(3) The Dilemma Between the "Land Attachment" Complex and the Lack of Social Security

The greatest difference between agriculture and nomadism or industry is that it draws directly from the land. This economic activity, deeply rooted in the soil, determines that the subject engaged in this activity, the farmer, is stuck to the land. [5](P3) Chinese farmers have a strong attachment to land. This "land attachment" complex determines that most farmers regard cultivated land as the primary use of farmland and have not yet formed the view of farmland as a factor of production that can play a greater economic value. This simple idea of farming one's own land, on the one hand, is conducive to China's cultivated land protection, causing any act destroying cultivated land to encounter strong traditional resistance; on the other hand, it also weakens farmers' willingness to scale up land and strengthens the difficulty of transfer. The reason why the "land attachment" complex remains strong to this day, apart from the influence of thousands of years of traditional small-peasant thought, is mainly the lagging rural social security system.

Land has three very important utilities: agricultural production, profit transmission, and social security. At different stages of social development, farmers rely on the three utilities to different degrees. Over more than 30 years of reform and opening up, China's secondary and tertiary industries have developed rapidly and have replaced agriculture's pillar position in the national economy. The proportion of non-agricultural income in farmers' income has gradually increased, the purely productive function of farmland has tended to weaken, and at this time the social security function of land becomes prominent. Correspondingly, China's current rural social security supply is far smaller than farmers' needs. The migrant worker group, which is both worker and farmer, has no unemployment security, and in rural areas the procedures for applying for the minimum living guarantee are cumbersome and the coverage rate is low. This has caused Chinese farmers, accustomed to thinking of danger in times of peace, to have to let the value-added function of land give way to the relatively more urgent social security utility. Farmland is both a "retreat field" and a "life-saving field."

Some scholars believe that the social security function of farmland will weaken as agriculture's comparative benefit among the three major industries declines and as the proportion of agricultural income in farmers' income declines. [10] But in fact, it is precisely because the comparative benefit of farmland has weakened that the security value of farmland has become increasingly important. Moreover, with the successive introduction in recent years of a series of measures supporting and benefiting agriculture, such as abolishing the agricultural tax and raising the minimum purchase price of grain, the decline in the comparative benefit of agricultural production has been limited, and the security function of farmland remains very important.

For Chinese farmers, abandoning outdated ideas and increasing land income is of great significance for strengthening their ability to pay for social security, but can they share in continuous value-added benefits after transferring land out? Can they effectively cope with real problems such as birth, aging, illness, and death? These doubts strengthen farmers' passive "land attachment" complex. This complex reduces the efficiency of farmland resource allocation and affects the whole society's allocation of funds to rural social security funds; this low level of security coverage in turn strengthens the fragmented operation of land. The realistic dilemma of being caught between two difficulties restricts farmland transfer.

IV. Countermeasures and Suggestions for Escaping the Institutional Dilemma

(1) Strengthen Institutional Supervision and Overcome "Boss's Will" Interfering with the Market Mechanism

The nature of the state as a people's democratic dictatorship determines that the perspective of economic decision-making is from the very beginning focused on the fundamental interests of the broad masses of the people. When the socialist market economy mechanism is unsound and the socialist legal system is imperfect, government organs are needed to strengthen supervision over land involving the fundamental interests of millions of farmers. But China's local governments are in fact still, to a certain extent, a kind of boss-responsibility system under the leadership of the Party committee. The Party and government top leaders' decision-making on market economic activities still cannot escape the influence of the traditional one-sided performance outlook, and their understanding of the economic benefits of farmland transfer is insufficient, with economic decisions often focusing on short-term immediate interests. Local government intervention in the farmland market is often accompanied by overt or covert "boss's will" at work. To fully give play to the market mechanism of farmland transfer, the urgent task is to change the performance assessment mechanism and strictly prohibit GDP-ism that sacrifices farmers' interests as the cost. Higher-level government organs should, within the scope permitted by law, grant grassroots government organizations discretionary power to innovate forms of farmland transfer, correctly understand the relationship between Party committees and governments and villagers' self-governing organizations. The Party's leadership over government organs and villagers' organizations cannot be all-encompassing; the Party committee's political leadership function should be exercised on the basis of fully respecting market laws, and the boundary of the Party's leadership function should be clarified. Improve the intra-Party democratic feedback mechanism. When village cadres, as grassroots mass self-governing organizations, face the situation that local policies deviate from the reality of farmland transfer, they should retain the right to report the actual farmland situation of the villagers of their collective to higher-level Party organizations, establish and improve according to law the punishment system of Party discipline and state law for coercive expropriation that violates farmers' wishes, and truly put power in the cage of institutions.

(2) Improve Farmland Market Intermediaries and Strengthen the Construction of the Rural Social Security System

The government should be committed to establishing efficient farmland transfer intermediary organizations, innovating channels to collect rural land transfer information, simplifying transfer procedures, coordinating land resource allocation relations, and reducing the transaction costs of farmland transfer subjects; establish a scientific land transfer evaluation system to prevent arbitrary price-raising behavior in farmland transfer. Try to establish land financing companies. For farmers who transfer farmland to other subjects that can make better economic use of it, because these people are relatively strongly dependent on farmland, preferential policies such as low-interest or interest-free loans should be given to promote their transfer to other industries; establish a government-led land agency, entrusted by farmers with weak operational willingness or poor operational ability, with the government renting, subletting, or transferring on their behalf to owners with strong operational ability, avoiding the abandonment of farmland and promoting the realization of farmland's economic potential. The state should continuously improve the rural new cooperative medical care and other security systems, and establish a social security system mainly self-funded by farmers' families, supplemented by state and collective security, including the three levels of social assistance, social insurance, and social welfare. Its funds come from the state, collectives, and individuals, and consideration may also be given to having owners pay social security funds on behalf of the transferring-out party out of part of the rent or subcontracting fee, truly relieving farmers of worries about giving up contracted land, [11] promoting the transfer of agricultural labor and realizing the efficient allocation of farmland resources.

(3) Guide Farmers to Change Concepts and Form a Flexible Market Economy Ideology

General Secretary Xi Jinping pointed out in an important speech at the fifth meeting of the Central Leading Group for Comprehensively Deepening Reform held on September 29, 2014: "We must respect farmers' wishes, adhere to law-based, voluntary, and compensated transfer of land management rights, and must not use coercive orders or arbitrary administrative commands." [12] In the institutional practice of farmland transfer, full attention must be paid to the thinking and concepts of the farmer group. Especially in an environment like China with a farming history and tradition of several thousand years, any government institutional decision involving farmland must add the function of farmers' concepts. For farmers, at the present stage land is still the sole reliance for the survival security and economic welfare of many farmers, and together with the land-attachment complex formed by historical accumulation, they are often unwilling to give up land management rights. In view of this, in the practice of farmland transfer, propaganda and education for farmers should be strengthened, farmers' minds should be armed with modern market economy concepts, farmers' traditional rural concepts should be transformed, the traditional small-peasant mentality should be broken, and a correct land values outlook should be established. In view of China's rural society, which is connected by rural sentiment and blood ties, the establishment of a farmland transfer mechanism should not only strengthen the design of economic mechanisms, but also incorporate sociological research on conceptual transformation such as farmers' psychological impetus, strengthen legal system construction, and promote the transformation of rural interpersonal networks from an ethical type to a legal-rational type. Increase educational efforts, enhance farmers' legal awareness and market awareness, treat farmland transfer with a rational attitude, and establish a long-term effective mechanism for educating farmers' concepts.

In summary, in the future process of formulating land transfer policies, decision-makers should not only pay attention to the design of formal institutions such as clear definition of ownership, convenient transfer systems, and effective agent supervision, but also devote energy to informal institutions such as farmers' concepts and the dismantling of outdated culture. Only when the software of informal institutions is perfectly matched to the hardware of formal institutions can farmland transfer become a new growth point for the whole society's economy.

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