How to Govern Farmland Fragmentation? China's Way to Tackle the Problem

The establishment of the household contract responsibility system stimulated farmers' enthusiasm and passion for production, but it also brought the hidden concern of farmland fragmentation. How should farmland fragmentation be viewed? How can the trend of farmland fragmentation be reversed? And how can the predicament caused by farmland fragmentation be resolved? Based on a review of existing research, this article offers some views and suggestions.

I. Farmland Fragmentation: Connotation, Causes and Functions

(1) The connotation of farmland fragmentation

The academic understanding of the connotation of farmland fragmentation has undergone a process of gradual comprehensiveness and increasing complexity. Wang Xingwen et al. (2008) held that land fragmentation refers to “farmers owning multiple plots of land, among which most plots are relatively small in area and not adjacent to one another.” Sun Yan et al. (2010) argued that the above definition, based on the perspective of land property rights, neglects the influence of land use types and planting structure. Based on a meso-level research perspective, they defined land fragmentation as: “influenced by human or natural conditions and by differences in land use types, a certain land use type is difficult to operate in contiguous, concentrated and scaled ways, and land use appears in a state of interplanting, dispersion and disorder.”

Zhao Kai (2011) held that the above understandings of the connotation of land fragmentation were all developed from the attributes of land use structure and were not yet comprehensive enough. Based on previous research, he proposed that the connotation of land fragmentation should include two parts: the attributes of land fragmentation and the causes of land fragmentation. Accordingly, he defined land fragmentation as: “a form of farmers' land operation that arises in the process of agricultural production under the influence of China's natural factors, economic factors, social factors, and institutional and policy factors, and that is characterized by a relatively large number of land plots, small and differing areas of individual plots, inconsistent fertility, and differing distances between households and plots.” This definition comprehensively summarizes the connotation of farmland fragmentation.

(2) The causes of farmland fragmentation

Natural conditions such as topography, geomorphology, geology and hydrology play a foundational and structural role in the formation of land fragmentation. Therefore, in plains, hills and mountainous areas, the degree of land fragmentation would seem to show a gradually rising trend. But Sun Yan et al. (2010), in their meso-scale study, rejected this view. They found that “the degree of land fragmentation is lowest in low mountainous areas, followed by plain areas, while the degree of fragmentation is highest in hilly areas”[2]. However, they included forest land in the analysis. It can be seen that, from different perspectives, the relevant conclusions obtained will be very different.

Chen Peiyong et al. (2011) systematically reviewed domestic and foreign research on the causes of land fragmentation, “dividing the causes of land fragmentation into two aspects: natural conditions and human factors.” Among them, human factors include three aspects: “institutional factors” (including the disintegration of the property inheritance system centered on the equal division among sons and the communal property system), “market transaction mechanisms,” and “land scarcity and population pressure.” Farmland fragmentation reflects, on the one hand, the relationships among plots; on the other hand, the relationships between plots and people; and, more importantly, it also reflects the relationships among people.

Zhou Yingtang et al. (2008) proposed that land use morphology is the result of multi-party games, and that whether it is “fragmentation” or “anti-fragmentation,” both possess a certain rationality. Among these, the most fundamental influencing factor is productivity, but it is also comprehensively affected by numerous factors such as traditional institutions, economic factors and human-land relations. This understanding helps to objectively study the issue of land fragmentation.

(3) The functions of farmland fragmentation

Academic research on the functions of farmland fragmentation is very rich. Tan Shuhao et al. (2003), based on surveys and analysis in Guangxi, Jiangxi and Hubei, held that current land fragmentation causes efficiency losses in the allocation between rural labor and land resources. But Li Gongkui et al. (2006), based on field research and analysis in economically underdeveloped areas of Jiangsu Province, found that “under the specific conditions of a large population and little land and the existence of a large amount of agricultural surplus labor,” land fragmentation makes agricultural production methods and production types dispersed, diversified and flexible, which helps small peasant households spread agricultural risks, make full use of labor resources, and maximize peasant household income.

However, Tian Chuanhao et al. (2005), based on empirical analysis of the Jiangsu, Zhejiang and Shandong regions, found that even when risk diversification and the alleviation of labor shortages are taken into account, cultivated land fragmentation still exceeds what peasant households need, leading to losses in production efficiency. Wang Xiuqing et al. (2002), in a field survey of rural areas in Laixi City, Shandong Province, also found that land fragmentation increased the material costs of local farmers' use of machinery and reduced the labor productivity, land productivity and cost-output ratio of grain production. Zhang Yinjunjie et al. (2008), in a study of Hebei Province, found that land fragmentation has a significant negative effect on economies of scale and grain output, but also has a certain positive effect on peasant household income.

But Hou Fang'an (2009), using nationwide statistical data for quantitative analysis, found that the fragmentation of cultivated land, as reflected by the per-laborer operated cultivated land area, did not have a serious negative impact on agricultural mechanization. He explained the rationality of this conclusion from two perspectives: the current stage of development of China's rural areas and the diversity of agricultural machinery functions. Li Weiyi et al. (2010) also found that small scale did not constrain cross-regional operation of agricultural machinery. This view is in tension with the above conclusions of Tian Chuanhao, Wang Xiuqing and others.

Gui Hua (2010), based on long-term and nationwide rural field surveys, found that current rural land is dispersed and fragmented, which is very inconvenient for farmers staying in the villages to engage in agricultural production. Sometimes, in order to compete for public goods resources such as irrigation water, farmers often have to pay the price of sweat, tears and even blood. He Xuefeng et al. (2003) also discovered an innovation in the farmland system carried out by farmers and grassroots organizations to overcome the irrigation predicament——“contracting by designated plots”——in order to overcome the problems caused by land fragmentation.

The above specific surveys based on different regions or explanations and analyses at different levels show great differences in research results. This indicates that Chinese rural areas have already experienced relatively large regional differentiation, and it is precisely this regional differentiation that has made scholars' evaluations of land fragmentation increasingly complex. Therefore, for how to determine and evaluate land fragmentation and its impacts, not only are more empirical materials and perspectives needed, but methodologically, the “ecological fallacy” in particular must be prevented.

II. Two Approaches to “Anti-Farmland Fragmentation”

In 2002, the Law on Rural Land Contracting was promulgated, and its relevant provisions greatly restricted the power of rural collective organizations to adjust land, avoiding the tendency of farmland to become continuously fragmented due to internal collective adjustments, and thus had a certain progressive significance. However, because before the promulgation of this law farmers had already divided the land by grade according to distance and fertility and equally distributed it by population over several rounds, by the time the law was promulgated, farmland fragmentation had already become an established fact. The promulgation of the Law on Rural Land Contracting solidified this fragmented form.

Rural land fragmentation is both rational and irrational. The goal of anti-land fragmentation is, on the premise of acknowledging its rationality, to reduce its irrationality as much as possible. Land transfer and land consolidation are currently the two main approaches.

(1) Land transfer——using market mechanisms to counter land fragmentation

In China, land transfer mainly refers to the transfer of land use rights. The Law on Rural Land Contracting clearly stipulates that “the land contractual management right obtained through household contracting may, in accordance with the law, be transferred by means of subcontracting, leasing, exchange, assignment or other methods,” and that land transfer should adhere to the basic principles of “equal consultation, voluntariness and compensation,” and must not change the form of land ownership or agricultural use.

1. Models of land transfer

In reality, land transfer mainly takes the following forms: ① Rural land exchange. That is, the act of farmers exchanging their respective contractual management rights. ② Rural land leasing. That is, the act of farmers leasing land use rights to others and demanding rent according to a lease contract. ③ Rural land share cooperation (Jiang Shengsan et al., 2003). That is, farmers convert their land contractual management rights into equity, no longer having a direct relationship with specific land, but instead participating in the operation of the collective economic organization through shares. ④ Rural land rent converted into shares. That is, farmers lease their land to others for operation and then convert the rent into shares, jointly participating in land operation. This model can ensure that land contractual management rights always remain in the hands of farmers themselves. ⑤ Rural land subcontracting. That is, the act of farmers transferring their land use rights to collective economic organizations, cooperatives, enterprises, private individuals or the government, which then uniformly transfer the land out.

In the above various models of land transfer, village collective groups often play a very important role. Under China's basic national condition of a large population and little land, the average land per household does not exceed 10 mu, and the plots are fragmented and scattered, which determines that matching supply and demand in the land transfer market faces relatively high transaction costs. The demand side of land often finds it difficult to discover the supply preferences and characteristics of land from thousands of households, while farmers under information asymmetry often lack trust in entities from outside the village world. At this time, village collective organizations have a very important function of reducing the market's price discovery problem and play a role in helping farmers review information and increasing the credibility of the land demand side. Therefore, under ordinary circumstances, farmers first concentrate land into the village collective group, and then the village collective group establishes a transfer relationship with the land demand side, distributes the land downward (subcontracting), or operates it itself (cooperatives, etc.).

2. Land transfer helps counter land fragmentation

Land transfer helps, to a certain extent, to “counter land fragmentation” (Yang Dan et al., 2011). Although farmers exchanging land privately does not change the total planting area of the household, it reduces the number of plots owned by farmers, thereby increasing the area per plot. Forms such as land leasing, shareholding and rent converted into shares are cases in which some farmers relinquish land, objectively reducing the per-laborer land area and possibly facilitating plot consolidation, thereby increasing the scale per plot. The government, collective economic organizations, exchanges or individuals, as intermediaries in land transfer, can relatively comprehensively reflect and capture supply and demand information about land, which is conducive to accelerating the speed of land circulation and promoting scale.

3. The two major dilemmas of land transfer

However, in reality, land transfer also faces a double dilemma.

(1) First, the existence of holdouts causes insufficient land transfer. The existence of holdouts may cause land transfer to face the “tragedy of the anti-commons” (Koch, 2009). Because the Law on Rural Land Contracting has solidified farmers' land property rights, land transfer may face very high transaction costs. Those farmers who want to transfer their land out may be unable to do so because of the existence of farmers who do not want to transfer land, thus causing insufficient land transfer.

If agricultural production is to have economies of scale, land must be contiguous. But because the land is originally very fragmented, transferring land contiguously will involve numerous households. Different farmers have very different degrees of dependence on land——farmers lacking non-agricultural employment opportunities (such as the elderly) are the most dependent on land. Different degrees of dependence lead to different willingness and asking prices for transferring land.

Ultimately, land transfer can only be concluded at the highest asking price. The reason is that land is immovable, and if the demands of the farmer with the highest asking price are not satisfied, he may be unwilling to transfer the land——thus making it impossible for the land to be contiguous. If one encounters a “hard holdout” who absolutely refuses to transfer land, and whose plot location happens to be very special, then even if all other farmers are willing to transfer land, everyone's wishes cannot be realized.

(2) Second, “radical promotion by external forces” leads to excessive land transfer. “External forces” (including the government, village collective groups, enterprises, cooperatives, etc.) use “coercive power” such as gangsters to force farmers to transfer land, causing farmers who originally did not want to transfer land to be forced to transfer it as well, resulting in “excessive transfer.” Because of the current agricultural policy orientation and the “pressure-type system,” grassroots organizations find it difficult to reflect and represent farmers' true demand preferences, thereby causing coercion in land transfer.

The current agricultural policy orientation generally excludes small farmers and tends to support scale operation and specialty agriculture. The pressure-type system amplifies this exclusivity toward small farmers. In government policy documents, there are not only various subsidies and preferential policies for land transfer, but also rigid land transfer tasks or targets issued level by level, signed responsibility statements, incorporation into target management responsibility systems, evaluations, linkage with promotion, bonuses and performance, and administrative incentives such as assigning dedicated personnel to supervise.

As the saying goes, “when those above have a preference, those below will go even further.” The starting point above may be good, but once it reaches the lower levels for implementation, it often becomes task-oriented and even politicized. Thus, in order to complete superior-level tasks, grassroots officials often find it difficult to take into account farmers' demand preferences and actual wishes. This involuntary land transfer violates the wishes of farmers in the villages——they are often the most vulnerable group among farmers (Zhang Jianlei, 2014)——damages their rights and interests, and may very likely trigger social conflict.

In short, the operating models of land transfer are diverse and have the effect of countering land fragmentation; but problems of “insufficient transfer” or “excessive transfer” may also arise, and the intervention of village collective groups will further increase this effect while also intensifying the above problems. “Insufficient transfer” of land indicates that the work of anti-fragmentation still has room for further improvement, while “excessive transfer” of land indicates that the work of anti-land fragmentation has become detached from the current rural reality and deviated from the current interests of farmers in the villages.

(2) Land consolidation——engineering and technical anti-land fragmentation

Land consolidation reflects humanity's understanding and transformation of nature, and this work appeared in China as early as more than 3,000 years ago. With the continuous deepening of understanding, the connotation of land consolidation has become richer and richer and its functions more and more complete. Land consolidation refers to “the activity of reclaiming unused land suitable for agriculture, carrying out comprehensive consolidation of fields, water, roads, forests and villages, and restoring and utilizing historically damaged land such as abandoned industrial and mining areas and land damaged by natural disasters, in order to improve the quality of cultivated land, increase the effective area of cultivated land, optimize the land use structure, raise the land utilization rate, and improve agricultural production conditions and the ecological environment.”

1. Models and functions of land consolidation

Lu Xinshe (2002) summarized seven types of land consolidation in China. Among them, farmland consolidation is currently the main body of land consolidation in China, including agricultural land consolidation and collective construction land consolidation (Tian Meng, 2014). From the perspective of engineering technology and consolidation goals, agricultural land consolidation can be divided into three models: the newly added cultivated land land-saving type, the industrial restructuring supporting type, and the landscape ecology combined type; collective construction land consolidation can be divided into three models: the residential area reclamation model, the new community reconstruction model, and the urban-rural construction land linkage model (Zhang Shichao, 2014).

Although Wu et al., based on quantitative analysis of questionnaire survey data from 227 farming households, found that land consolidation in China's comprehensive agricultural development had no impact on reducing farmland fragmentation, Lyu Xiao et al. (2011), on the grounds that the sample size of that study was too small, questioned the representativeness of their conclusion. Overall, that land consolidation helps overcome land fragmentation has been confirmed by a large number of studies and has become a basic academic and policy consensus.

In the process of land consolidation, village collective groups often need to play a very important role and function. Land consolidation requires dealing with farmers, and its fundamental goal is to meet farmers' needs for engaging in agricultural production. Therefore, farmer participation in land consolidation is not only a subjective wish but also an objective requirement. From the preparation and application of land consolidation plans, to the implementation and supervision of land consolidation projects, to the adjustment of land ownership and allocation of resources after land consolidation, to the subsequent maintenance and management of farmland water conservancy infrastructure after land consolidation, and so on, every link cannot do without farmer participation. Once farmer participation is lacking, the effectiveness of land consolidation will inevitably be greatly reduced. However, different farmers have different preferences regarding the needs of agricultural production. Therefore, land consolidation work needs to appropriately classify and screen these demand preferences and respond to and even resolve farmers' needs in a targeted manner. But this requires costs. At the practical operational level, the main channel for villagers' participation is to “entrust” the village collective group, or, under the leadership of the village collective group, establish corresponding farmers' autonomous organizations (such as farmers' cultivated land protection associations, supervision committees, etc.) to gather, organize and express their own demand preferences, and to actively supervise the quality and schedule of land engineering implementation. This not only greatly reduces the cost of obtaining farmers' demand preferences in land consolidation, but also reduces the cost of construction supervision, helps land consolidation work to be implemented more smoothly, and allows the consolidation effects to be brought into fuller play.

2. Problems in land consolidation and their improvement

However, land consolidation work does indeed have problems. At present, the land consolidation work promoted by the Ministry of Land and Resources through “projects” lacks overall planning, cooperation and coordination, focuses on increasing cultivated land as the goal, and leans toward using engineering and technical means to change the physical form of land and soil structure. It not only neglects the integration of farmers' land rights and the adjustment or exchange of plots, but also neglects the expansion of the scale of farmers' per-unit cultivated area, thus causing land consolidation to fail to fully play its due role.

As to why this problem arises, Gao Xiangjun et al. (2011) held that it is because current rural land consolidation work lacks unified normative policies and measures, and interdepartmental cooperation is insufficient; there is a contradiction between comprehensive land consolidation and the lag in village-level planning; financing channels are single, and farmers lack financial incentives; a performance assessment mechanism has not yet been established, and responsibility implementation is unclear; insufficient attention is paid to farmers' wishes, and farmer participation is inadequate; and the distribution of income from land is unclear, among other things.

On how to improve it, Wang Jun (2011) and Yun Wenju et al. (2011) proposed that land consolidation should strengthen support from ecological landscape theory, methods and technology. Liu Yansui (2011), on the basis of suggesting “elevating rural land consolidation to a national strategy,” proposed that currently advancing land consolidation should be combined with new rural construction, with the consolidation of hollow villages as the focus and core. Wu Cifang et al. (2011), from a more abstract perspective, proposed that the theoretical vision of land consolidation should move from physical form to functional system, that the rational paradigms include instrumental, value and exchange rationality, that the engineering positioning should move from project areas to ecological farms, and that the strategic path should move from emergency goals to systematic solutions.

Zhang Fengrong et al. (2009) held that land consolidation is not only a technical engineering issue, but also involves the reallocation of land use space, land rights and land interests, and that doing a good job in plot adjustment is an important link in giving full play to the maximum benefits of land consolidation projects. Yu Biao (2014), from a political science perspective, insightfully proposed that, under given current conditions of land consolidation engineering technology, “agricultural governance” that resolves the connection between large-scale agriculture and small farmers is the key factor affecting the performance of farmland consolidation. After evaluating the performance and problems of the two current models of organizing farmland consolidation, namely the village group unit and the cooperative unit, he held that “in addition to strengthening project management and improving engineering technology, the most important thing is to explore and find a new long-term model for governing agriculture.”

In short, land consolidation can, at a certain level, eliminate those irrational factors that cause land fragmentation and promote appropriate scale of land. But land consolidation also faces many practical problems. The fragmentation of macro administrative power in policy implementation, the immaturity of project operation models and the ambiguity of theoretical direction, the unsoundness of project management systems, and the lack of farmer participation mechanisms have all caused losses in the benefits of land consolidation work and affected the effective realization of the goal of countering land fragmentation.