Capital goes to the countryside: strong enough to grab land, but not capable of farming it
Land lessees unilaterally “break contracts” or even “abscond”, land rent is hard to collect, and returned land either has lost its boundaries or has seriously damaged motor-pumps and pipes, or even misses the farming season and is left abandoned……
In early April, a China Youth Daily reporter interviewed rural areas in Baixiang and Wei County of Xingtai City, and Cheng'an, Qiu County and Ci County of Handan City in Hebei Province, and found that land transfer “contract-breaking and land-abandonment” has appeared in many places——last year they had just signed 5-year and 10-year “land contracting agreements” with farmers, and this year the land lessees unilaterally terminate the contracts and forcibly return the farmland.
A China Youth Daily reporter's investigation found that the farmers currently in trouble are mostly “early adopters” who just handed over land during the land transfer boom of the past two years, while those who “break contracts and abandon land” are almost all countryside-bound capital that has not farmed for long. Because the area involved in “contract-breaking and land-abandonment” reaches over a thousand mu and involves many farming households, it is tantamount to a small-scale “earthquake” locally.
An expert told a China Youth Daily reporter: the currently frequent “contract-breaking and land-abandonment” phenomenon is precisely caused by the “strength to compete for land, but no ability to farm” exposed in recent years as capital has gone to the countryside to farm. As downward economic pressure increases, the “contract-breaking and land-abandonment” appearing in rural areas today is only the beginning.
Last year “contract”, this year “dump”: land transfer rides a “roller coaster”
On April 9, in Baixiang County, Xingtai City, wheat seedlings in the surrounding plots had grown about a chi tall, but the farmland of Guo Erpang, a villager of Neisan Village, Neibu Township, was overgrown with weeds and had become a pasture for a shepherd from a neighboring village. The reason was that around the Spring Festival, Zhinong Vegetable Planting Professional Cooperative unilaterally terminated the 10-year land contracting agreement signed last year.
On April 1, in Cheng'an County, Handan City, faced with accusations of “contract-breaking and land-abandonment” from villagers of Beilangbao Village, Shangcheng Town, the person in charge of Rulin Vegetable Planting Farmers' Professional Cooperative said: “You can sue me (in court); the harder you sue, the better!” She, who lost money last year transferring land, claimed: “I still don't know whom to sue!”
On April 7, also in Cheng'an County, Handan City, when talking about land transfer, a villager of Houpeili Village, Xinyi Township shook his head repeatedly: “Last year, land transferred west of the village to grow cabbage lost money, and the land contractor ran off without even paying the farmers' land rent.” The leisure farm built on transferred land north of the village also failed to make money, and the “Mongolian camp” that was set up has now changed hands……
In contrast to today's helpless scene of “contract-breaking and land-abandonment” is the land transfer boom that local farmers still remember vividly, which swept through local rural areas rapidly in the past two years.
Guo Zhenling, a villager of Neisan Village in Baixiang County, recalled that last year, in order to recruit branch managers, Zhinong Vegetable Planting Professional Cooperative set up “working groups made up of about ten people” in every township of the county, and in order to invite him to “come out of retirement”, the working group not only promised a high salary but also used all kinds of connections to “pay three visits to the thatched cottage”.
Wang Chengqiang, a villager of Beilangbao Village in Cheng'an, remembered: in early spring last year, “bosses” drove cars to the village in batches to seek land contracts. At that time, the village barbershop also became a rather busy transfer station for land contracting information, and the barber, and even the roadside bicycle repairer, took part-time jobs as “intermediaries”.
Land transfer “models” were even competed for by local media: it said that because of the appearance of “Zhinong”, this new-type agricultural professional cooperative covering the whole county, Baixiang County's agricultural structure and farmers' production methods were undergoing “unprecedented” changes; because the cooperative transferred large amounts of land, farmers could “earn three kinds of money from one piece of land”——they could receive land transfer rent and dividends, and also work at the cooperative to earn wages……
For a time, land transfer entered the fast lane.
The “boss” surnamed Li of Rulin Vegetable Planting Farmers' Professional Cooperative was a trial participant who went to the countryside to farm for the first time last year. According to this “boss” surnamed Li, not only had the more than 1000 mu of land she transferred in Cheng'an County last year undergone “contract-breaking and land-abandonment”, but other “bosses” who transferred land in Cheng'an at the same time were now all “dumping land”——either returning it to farmers or subcontracting it to others.
Is capital going to the countryside farming or “playing” at agriculture?
Regarding the land transfer boom that rapidly swept through local rural areas in the past year or two, a large grain-growing household surnamed Wang in the Handan area, who has transferred land for many years, was not optimistic.
In her view, the promoters of this wave are no more than two forces: one is the urban industrial and commercial capital that has gone to the countryside to farm in the past year or two, and the other is people with ulterior motives who use land transfer to “flex their muscles” to achieve the purpose of illegal fundraising.
According to her estimate, among those around her who “grabbed land” to farm in the past year or two, nearly half were such non-agricultural capital.
As for the recent large amount of urban industrial and commercial capital going to the countryside to farm, an expert engaged in land transfer research at Shijiazhuang University of Economics also paid attention during investigation. “The investment prospects of modern agriculture are widely favored, which has stimulated industrial and commercial capital to ‘surge’ into the modern agriculture field.” She said that especially in recent years, the state has strengthened macroeconomic regulation of industries such as real estate, steel and coal, and coupled with the sluggish markets of these industries, this part of the funds has been directed toward agriculture to find a way out. “This is even more so for Hebei, which once used steel and coal as the two major supporting industries of the provincial economy.”
A China Youth Daily reporter saw that the influx of countryside-bound capital was changing some rural areas in southern Hebei: the beautiful scenery of foreign farms and the “foreigners” farming “freely” in them——huge advertisements with similar themes blocked the construction sites of agriculture-related enterprises on farmland; even in relatively remote rural areas, sightseeing agriculture marked by erected yurts could be seen everywhere……
A farmer told the reporter: this is not doing agriculture at all; it is simply “playing” at agriculture. Large grain-growing households have no goodwill toward countryside-bound capital farming.
This expert at Shijiazhuang University of Economics analyzed: “Among the urban industrial and commercial capital going to the countryside, it cannot be ruled out that some enterprises enter agriculture tempted by land value, with the purpose of ‘enclosing land’ or non-agriculturalization. Some enterprises enclose land without using it, and what is worse, some industrial and commercial capital enters agriculture for the purpose of fraudulently obtaining state subsidies.”
“Of course, many of them are sincerely committed to engaging in agriculture.” She also pointed out: “Judging from the current industrial and commercial capital going to the countryside to farm, the composition of identities is complex, including enterprises in real estate, construction, steel, coal and other industries.” Some of these enterprises enter agriculture because they see the state's strong support for agriculture, some think doing agriculture may be easier than other industries, and some are based on a simple agricultural sentiment. “But most lack deep understanding of the basic attributes of agriculture and the complexity, long-term nature and risk of agricultural investment, and are blindly following the trend.”
The large grain-growing household surnamed Wang in the Handan area also told a China Youth Daily reporter that the urban industrial and commercial capital around her that farmed for the first time last year paid no small amount of “tuition” for this: a real estate “boss” farming for the first time transferred 1800 mu of land to grow purple sweet potatoes, and ended up losing several million; another real estate “boss” entering agriculture for the first time transferred 600 to 700 mu of land at 1200 yuan per mu to grow rice, and ended up losing at least 500 yuan per mu……
Land transfer: to the highest bidder?
Last year, a “boss” in the steel industry in a certain place in Handan planned to transfer land to grow sweet potatoes, and in order to push aside competitors, “generously” raised the land rent from 1200 yuan/mu/year to 1400 yuan at once.
“The ‘bosses’ going to the countryside to farm are fearless in their ignorance, and indeed are not short of money, so land rent keeps rising again and again.” The large grain-growing household surnamed Wang in the Handan area, who has many years of land transfer experience, sighed to a China Youth Daily reporter: “I really don't know how sweet potatoes can be grown without losing money at such high land rent.” According to her experience, only when land rent is around 700 yuan/mu/year can the risk of loss in growing sweet potatoes be controllable.
According to research by an expert engaged in land transfer research at Shijiazhuang University of Economics, around 2012, land transfer rent in Hebei Province was still around 400 yuan/mu/year. In less than three years, the average level has now risen to 1000 yuan/mu/year, and the high end has even reached 1200 yuan to 1400 yuan/mu/year.