China's Current Three Rural Issues and the Direction for Deepening Agricultural Land System Reform
Basic Development of the Three Rural Issues in 2014
First, let us review the basic situation of the three rural issues in 2014. In 2014, the overall situation of the three rural issues was stable and improving. Grain output increased by 0.9% over the previous year, and the production of livestock products, aquatic products, fruits and vegetables remained stable. In 2014, the average per capita net income of farmers was 9892 yuan, an increase of 9.2% after deducting price factors, and the income growth rate continued to be higher than that of urban residents. The pilot reform of the target price for cotton and soybeans proceeded steadily, the pilot registration and certification of contracted agricultural land management rights was carried out in an orderly manner, land management rights were transferred, and appropriately scaled agricultural operations advanced rapidly. The development gap between urban and rural areas narrowed, the rural living environment and infrastructure continued to improve, and integration between urban and rural areas had already begun.
On the other hand, in 2014 some problems also emerged in China's development of the three rural issues. Under the combined effect of rising input prices, labor wages and land rents, the cost of agricultural products climbed rapidly, and the prices of China's major agricultural products were generally higher than those of imported agricultural products entering China under quotas. Because domestic agricultural product prices were high, marketing enterprises and processing enterprises were more willing to use imported agricultural products, causing domestic agricultural product inventories to climb. The agricultural growth model that single-mindedly pursues output and competes for resources has put great pressure on resources and the environment. Agriculture has become a major source of water body deterioration and soil heavy metal pollution, and urban residents are generally worried about the quality of agricultural products.
⟦NL> For these problems, our main current countermeasure is the integrated development of the primary, secondary and tertiary industries. That is, in rural areas, in addition to providing primary agricultural products, it is also necessary to process agricultural products and develop services such as tourism. Across the country, county-level administrative units with the conditions and foundation are selected to carry out pilot reforms for rural land expropriation, entry of collectively operated construction land into the market, and the rural homestead system. Research on agricultural genetically modified organisms, safety management and science popularization should be strengthened. Outstanding members of the group going to cities to work should be guided to return home to start businesses, bringing back capital, technology, management ability and personal connections. Rural cooperative finance and inclusive finance should be developed.
Deepening Agricultural Land System Reform
Ultra-small-scale agricultural land operations can solve farmers' food and clothing problems, but cannot solve the development of modern agriculture. Agriculture is suited to family operation. The problem of ultra-small-scale agriculture is not the problem of family operation. The sustained and rapid development of China's economy has brought farmers non-agricultural employment opportunities that are increasing in number and increasingly stable.
The upgrading of farmers' employment structure, on the one hand, has made non-agricultural employment the main source of farm households' income growth, and on the other hand, has gradually increased the opportunity cost of engaging in agricultural production, thus giving rise to the behavior of farm households subleasing land. Agricultural land transfer helps overcome the drawbacks of ultra-small-scale agricultural operations, helps promote the application of new agricultural technologies, and helps advance agricultural development. As the scale of agricultural land transfer expands and the forms of transfer increase, the current arrangement of rural land property rights is becoming increasingly unsuitable for the requirements. The problems caused by land transfer should not be explained anew within the original property rights structure; the property rights structure should be further improved and reformed.
Reform of the land property rights structure requires adjustments in three aspects: first, changing from land contracting rights to land shares, which also realizes shared ownership by shares of collective land through equity. Second, changing property rights in physical form to property rights in value form. Third, changing the production rights of specific land to the income rights of specific land.
Cultivating New Types of Agricultural Operating Entities
Because ultra-small-scale agricultural operation forms lack competitiveness, as the economy develops, fewer and fewer farmers are willing to engage in ultra-small-scale agriculture, so much so that some people have developed the worry of who will farm the land in the future. In fact, the decline of ultra-small-scale agriculture not only need not be worried about, but should be welcomed. Only when more and more farmers are unwilling to engage in ultra-small-scale agriculture will new types of agricultural operating entities grow up.
New types of agricultural operating entities are operating entities with self-generating capacity, not operating entities that need support in order to function. The government should create a more competitive environment for new types of agricultural operations and push them into the market. If this approach is adopted, the development of new types of agricultural operating entities will certainly be somewhat slower. Only in this way will so-called new types of agricultural operating entities that seek government subsidies be eliminated, and new types of agricultural operating entities with self-generating capacity be retained. In this way, banks will be willing to lend to new types of agricultural operating entities, insurance companies will be willing to insure them, and a market-oriented business environment will gradually take shape.