Grain-price conversion faces challenges: can land transfer achieve win-win outcomes for all parties?
In rural land transfer, the “grain-price conversion” model is generally adopted, whereby after villagers transfer their land, the land rent is calculated at the market price equivalent of a certain number of jin of rice per mu. A reporter's frontline investigation in rural Sichuan found that some villagers are already dissatisfied with this model, and Sichuan has explored various forms of benefit-sharing linkages such as land equity participation, seasonal sharing, and reverse leasing and subcontracting, to solve the difficulty of sharing benefits between villagers and operating entities.
“Grain-price conversion” land transfer faces challenges
In rural Sichuan, land transfer prices are generally calculated at the market price equivalent of 400 to 1000 jin of rice per mu per year. However, this model has begun to encounter resistance from some villagers, and in some places villagers have even come into confrontation with business owners.
In April 2014, in Jinhua Town, Shehong County, Suining City, a large number of villagers became involved in a dispute with Junyuan Agricultural Co., Ltd., which grows hybrid citrus. Villagers said that while the benefits of hybrid citrus increased year after year, the land transfer fees remained very low. “For a long time, the grain-price conversion for one mu of land was only about 400 yuan, which is too little.” Villager Du Zhikai told the reporter that if the rent was not raised, the villagers would not lease their land to the company. During that period, incidents of stealing fruit, stealing trees, and even cutting down trees and destroying land occurred from time to time.
Some villagers believe that they should share the fruits of agricultural development together with the business owners, rather than simply collecting land rent. Otherwise, they would rather keep the land in their own hands than transfer it. In Yingchun Village, Xianfeng Township, Zitong County, Mianyang City, Sichuan, villagers over a period of nearly 3 years successively rejected land transfer plans from nearly 20 agricultural companies. Villager Wang Dingqiu said that all the visiting enterprises had a big “appetite”: they wanted to contract more than 2000 mu of land from the entire village in one go, and only transfer land by way of rent. A survey in the village found that only a small portion of villagers who had all gone out to work accepted it. “Everyone has many concerns, and we have never been able to reach an agreement.” Wang Dingqiu said.
Some agricultural experts said that by simply adopting the grain-price conversion model, villagers get land returns under the traditional agricultural model, but lose the support of land, employment and social security for developing modern agriculture. Even if villagers work on the land, that is only a minority.
“Benefit linkage” achieves win-win outcomes for multiple parties
The reporter's investigation found that rural Sichuan is gradually forming various forms of benefit linkage such as land equity participation, seasonal land sharing, and reverse leasing and subcontracting, which are welcomed by villagers. Experts believe that a reasonable and well-developed benefit linkage mechanism can not only allow villagers to share the fruits of modern agricultural development, but also make the development environment for business owners more stable.
Junyuan Agricultural Co., Ltd. transferred more than 3000 mu of land from more than 900 local households. After April 2014, villagers participated with land management rights as equity, and the company was responsible for production management and operations. Ni Dequan, production director of Junyuan Agricultural Co., Ltd., said that after villagers participate with transferred land as equity, they receive 25% of the output value based on land area, the company takes 74%, and the land transfer cooperative based on the village collective takes 1%. Regardless of the company's performance, villagers will receive a guaranteed minimum income of 600 yuan per mu of land per year. Villager Du Zhikai said that he transferred 6 mu of land to the company, the minimum output value could reach 40000 yuan, and he would have an income of 10000 yuan, about 7000 yuan more than simple land transfer. “Now we all consciously protect the forest, afraid that something will go wrong in some link, unlike before when we were indifferent to the transferred land.”
The reporter's investigation learned that increasing farmers' income through equity participation is also one of the important contents of Sichuan's pilot program to increase farmers' property income. Chongzhou City in Sichuan has explored the establishment of land share cooperatives, where villagers convert land contractual management rights into shares and join the cooperative. The land is handed over to the cooperative council for unified production management, and each member only needs to contribute production costs according to the share area. After the production season ends, distribution is carried out according to shares. Guo Fei, director of the Sichuan Agricultural Development Office, said that with the advancement of rural reform, Sichuan has also quantified fiscal subsidy funds into shares for farming households. Farming households participate in enterprises through cooperatives in the form of preferred shares, and farmers receive dividends according to shares.
In addition, Sichuan has also seen a model in which business owners and farming households “share land by season” and engage in “reverse leasing and subcontracting.” Yang Xuguang, director of the Jiangyou City Agricultural Office, said that in the agricultural park of Xin'an Town, Jiangyou City, business owners only plant one season of morel mushrooms on the transferred land, and villagers can still grow vegetables in the remaining seasons.
“Risk prevention” makes the community of interests closer
The reporter's investigation found that with the progress of land rights confirmation and certification, some villagers have begun to realize that land is not only a guarantee of survival, but also an important way to obtain income. With the exploration and practice of various benefit linkage mechanisms, risk prevention and control also need attention.
The benefit linkage of land equity participation is currently relatively popular, but this is not shareholding in the true sense. According to market rules, when villagers participate with land as equity, they should not only share benefits but also share responsibilities. However, this is mostly not the case in rural areas. After villagers participate with equity, regardless of whether the business owner operates well or poorly, they have a guaranteed minimum income, and all risks are placed on the operating entity. “Once the boss ‘runs away’, a mess will be left behind, and this situation needs to be guarded against.” Yang Xuguang said.
Zhang Nengkun, comprehensive division chief of the Rural Work Committee of the Sichuan Provincial Party Committee, said that in terms of risk prevention and control, consideration can be given to collecting land transfer deposits and land reclamation funds. The specific proportion appropriate needs consultation between business owners and villagers, and local government financial departments also need to conduct research. Based on the principle of not harming villagers' interests, the continuously emerging new types of benefit linkage should be put on a path of sustainable development.
Some agriculture-related officials predict that in the new round of rural reform, benefit linkage methods centered on land will continue to emerge, and rural market economic factors will also become more active, followed by an increase in a large number of disputes. It is suggested to strengthen the publicity and popularization of the concept of the rule of law in rural areas, and resolve disputes through legal channels.