What is the significance of the current transfer of rural land management rights in China?

The most prominent feature of China's current rural land system is the non-economic principle of the primary market (that is, the rural land contracting market) and the lagging development of the secondary market (the market for the transfer of land use rights or management rights). In the primary market, one notable feature of the current household contract management system is the implementation of the “equal field system”, under which land is distributed equally within rural collective economic organizations according to the number of people. Members of collective economic organizations hold the same area of land in each quality grade of land, so the cultivated land area of each farming household, which averages only a few mu, is often divided into several plots, or even dozens of small plots. According to China's historical experience, land is both a commodity and a livelihood guarantee for farmers. If we are unable to provide farmers with other livelihood guarantee measures, we cannot overemphasize the commodity nature of land. When the social security system has not yet covered rural areas, this household contract management system characterized by the “equal field system” actually has the nature of a social security system. Under this system, the principle of fairness comes first, and the principle of efficiency comes second. Land resources are to a large extent regarded as social security materials distributed equally according to population rather than as production factors allocated according to efficiency. In the secondary market, due to reasons such as the level of economic development and the lack of supporting systems, there are still many problems in the current transfer of rural land use rights, such as small transfer scale, poor transfer performance, and irregular practices. The so-called land transfer refers to separating land management (use) rights from contracting rights under the premise of stabilizing the contracting relationship, and handling them through methods such as granting, transfer, external contracting, external sub-contracting, and joint operation cooperation. Its core is “separation of the three rights, voluntary participation, market contracts, and government supervision”. The so-called “separation of the three rights” refers to the separation of land ownership, contracting rights, and management rights. Land ownership still belongs to the rural collective and is not transferred. What enters the market for transfer is only the land management right, which has a relatively independent legal status. Through the market transfer and optimized allocation of land management rights, the allocation efficiency of land resources and the comparative benefits of agriculture are improved, farmers' incomes are increased, and at the same time agricultural modernization and rural industrialization and urbanization are promoted, overcoming various drawbacks related to the current household contract management system. This overcoming is the improvement of the current household contract management system. Therefore, the introduction of land use rights transfer measures in response to the above-mentioned drawbacks of the current land system is an adjustment to the current household contract management system and a revision of the current land system, so as to meet the needs of agricultural and rural economic development in the new era. Its major practical significance is reflected in the following aspects:

1. The transfer of agricultural land management rights is the consolidation and improvement of the household contract management system

From a legal perspective, only when a certain right held by a market entity is clearly defined by law does that right have the premise for entering the market for exchange, and rural land management rights are no exception. Although the household contract management system separates agricultural land ownership from contracting and management rights, and stipulates that contracted land may not be arbitrarily adjusted during the contract period, due to reasons such as the lack of clear legal basis, according to sample surveys, land was adjusted 3.1 times on average nationwide within the 15 years of the first-round contract period. The carrier of land contracting and management rights——the plot——also changed accordingly 3.1 times, which means that the land contracting and management rights held by farming households are in fact uncertain. The prerequisite for land management rights to circulate in the factor market and achieve optimized allocation through market mechanisms is to eliminate this uncertainty, that is, it is necessary to clearly define in law land ownership, contracting rights, and management (use) rights, and to legally guarantee their stability during the contract period. Only in this way can farming households trade this statutory right in the market. The “third land revolution”, centered on the construction of a rural land management rights transfer system, is premised on consolidating the achievements of the “second land revolution”, whose main content is the household contract management system. In other words, to carry out the “third land revolution”, we must first clarify and consolidate the achievements of the “second land revolution” in the legal system (that is, in formal institutions). From this, it is not difficult to draw a conclusion: the construction of a rural land management rights transfer system is conducive to institutionally consolidating the household contract management system.

⟦NL> 2. The transfer of agricultural land management rights helps improve the allocation efficiency of land resources

In the nearly 20 years after China's reform and opening up, the socioeconomic environment has undergone great changes. On the one hand, in the developed eastern coastal areas, with the development of rural non-agricultural industries, household part-time farming based on semi-subsistence small-scale land management has generally appeared. A considerable proportion of farming households have already shifted to non-agricultural industries, and phenomena such as abandoned land, scattered use, and small operating scale have appeared, resulting in enormous efficiency losses in resource allocation. On the other hand, in regions with slower economic development and lower development levels, especially in the central and western regions, because the development of rural non-agricultural industries lags, farmers cannot smoothly transfer to non-agricultural industries locally, and operating on scattered, small-scale land cannot realize farmers' desire to become prosperous. A large number of rural laborers go out to work, leading to phenomena such as abandoned land, which likewise causes enormous efficiency losses in land resource allocation. It can thus be seen that the current household contract management system, whether in China's developed eastern coastal areas or in the central and western regions with lower economic development levels, can no longer well adapt to the needs of agricultural and rural economic development, as shown by various drawbacks in land resource allocation. In order to allocate land resources according to the principle of efficiency, change the existing scattered, small, and inefficient land use pattern, and create a mechanism for land concentration so as to implement scale management, this constitutes the institutional demand for a land transfer system.

3. The transfer of agricultural land management rights helps farmers increase their incomes

The growth of farmers' incomes can be reflected in the increase in income of large farming households, in the transfer fees obtained from transferring land management rights, and in the increase in farmers' incomes caused by the considerable wages obtained when agricultural laborers become hired agricultural industrial workers. It can also be reflected in the increase in the incomes of farmers working in non-agricultural industries caused by farmers transferring out land management rights, thereby weakening the binding of land on agricultural labor and promoting the transfer of agricultural labor to non-agricultural industries. The increase in income of farming households engaged in appropriately scaled efficient agriculture is easy to understand. There are also examples in modern economic life of farming households relying on transferring land management rights to obtain land transfer fees and obtaining considerable wage income by becoming hired agricultural industrial workers. For example, enterprises such as Chaoda Group, which is listed in Hong Kong, China, Yuyao Pickled Mustard Factory in Zhejiang, and Yeli Wine Factory purchased farmers' land management rights in contiguous tracts, ranging from at least 1,000 mu to more than 10,000 mu. In addition to paying farmers land management rights transfer fees ranging from several hundred yuan per mu, they also hired many agricultural laborers to engage in agricultural production or work in agricultural product processing factories. This greatly increased the total income of farmers who transferred out their land compared with before the transfer.