Moderate-scale agricultural land management, with an average of thirty mu per household being appropriate

“The 2015 Fourth China International Agribusiness Summit Forum” was held in Beijing on May 17. Zou Lixing, Vice President of the Research Institute of the Head Office of China Development Bank, attended and delivered a speech.

Zou Lixing stated that the appropriately scaled smallholder economy is an important phenomenon and trend that will persist in China over the long term. “The so-called appropriate scale is roughly twenty to thirty mu per household. If it is too large, there are certain difficulties; if it is too small, it is also unrealistic.”

Zou Lixing gave five reasons. First, farmers have deep-rooted emotional ties to the land. Second, the smallholder economy has tenacious vitality, contains the power of bloodline inheritance, and reflects the characteristic of combining social reproduction with natural reproduction. Third, the smallholder economy has relatively low transaction costs; even for family farms and specialized farming households, it is relatively easy to mobilize relatives and use internal labor. Fourth, the smallholder economy has a relatively strong ability to adapt to the market. Fifth, the smallholder economy provides farmers with employment and income opportunities.

The following is the transcript of the speech:

Zou Lixing: I would like to take this opportunity to briefly exchange views with friends here on three issues.

One, the contribution of land.

Two, the predicament of land.

Three, the choices for land.

As a scarce strategic resource, land's contribution to population is obvious to all. China uses only 7% of the world's available arable land to feed 20% of the global population. The importance of land's contribution is very clear.

Second is the contribution of land price differentials. I will give an approximate figure: the contribution made to industrialization and urbanization through net differential returns from land is roughly around 3 trillion, and this is land's contribution to the nation.

Another very important contribution is land's fiscal contribution. Everyone knows that land finance is a very important source of revenue for our government. At its highest point (2010), land finance accounted for 76% of local fiscal revenue. It declined somewhat in the past two years, but by 2012 it still reached 44%. This contribution is very large.

Land has one shortcoming: it cannot be used endlessly. Under this circumstance, it has encountered a predicament, and this predicament has four aspects:

1. Per capita arable land area is becoming smaller and smaller. At present, the rate of decline in our per capita arable land is the fastest in the world. According to data up to 2008, it had already fallen to only 0.08-plus hectares per capita. This shows that our land is directly linked to food security, and food security is a highly challenging matter.

2. Agricultural land is extremely fragmented. On the one hand, the phenomenon of abandoned and idle land is now very serious. On the other hand, extensive land management has long been very serious. This is the predicament of our country's land.

3. The generational division among farmers is relatively serious. Young and middle-aged adults go out to work, while the elderly, women, and children remain at home, forming the 993861 force. The simple out-of-town migration of migrant workers has caused heavy social costs and sacrificed the happiness of three generations. Migrant workers themselves lack a sense of family happiness, the labor and spiritual burdens on the elderly left behind are especially heavy, and the education and psychological safety problems of left-behind children are very prominent. After the rural able-bodied labor force moves to cities, the hollowing-out problem in rural areas is becoming increasingly serious, and public security conditions are also very severe.

4. The phenomenon of rural decline is relatively serious. We still have to face reality: rural characteristics are gradually disappearing, and hollowing out is becoming prominent. Let me give an example here. For instance, in a village in Linchuan, Jiangxi, an on-site survey showed that of 103 old residences, 93% were vacant there, accounting for 23.9% of the total homestead land. This is reflected not only in changes in the appearance of the countryside, but also in changes in rural society. Rural human ties have become very distant, rural labor has no master, and now the main labor force has no master. Third, rural hollowing out; fourth, rural economic diversification; fifth, the disappearance of rural culture; sixth, the desolation of rural society. Many traditional villages have disbanded and are overgrown with weeds. The rural population has decreased, and the disordered condition of rural areas is relatively serious. It is increasingly hard to find the original flavor.

In this period of great transformation, during the transition of traditional society, and in the process of rapid industrialization and urbanization, major changes and transitions in rural society are inevitable. All kinds of problems are problems in development, and they are also to be solved through development.

What is the approach to solving this? The central government issues a No. 1 document every year. Perhaps, from an academic perspective, we should first look at the period ahead. We feel that three major transformations will occur in rural areas.

1. Villages with historical traditions will transform into villages that combine tradition and modernity with a trend toward modernization.

2. Chinese farmers will transform into rural citizens with modern awareness.

3. Chinese agriculture will transform into an industry with a scale of twenty to thirty mu as the main body, diversified operations, and a modern technical level.

In this process of transformation, there are roughly 6 measures worth considering.

First, let us look at a vision combining tradition and modernity. What kind of countryside will the countryside of the future actually be? We believe it should be a state of economic branding, distinctive rural culture, legal-rational rural society, and livable rural social environment. From the perspective of outlook, what kind of countryside do we hope for? I think our countryside should be a vision combining tradition and modernity in these several ways.