What are the scope and limits of "confirming rights and shares without confirming land"?

Since the 2008 "Decision of the Central Committee of the Communist Party of China on Several Major Issues Concerning the Promotion of Rural Reform and Development" (hereinafter referred to as the "Decision") proposed “doing a good job in rural land rights confirmation, registration, and certification”, except for the 2011 No. 1 Document which focused on water conservancy construction, other No. 1 Documents have all put forward requirements for rural land rights confirmation. In fact, both the first round of household contracting and the second round of household contracting were processes of rights confirmation. The rights confirmation proposed after the 2008 "Decision" should have gone a step further. On the one hand, it was aimed at the expansion of the previous two contracting periods, in order to solve the problem of how to concretely implement “long-term unchanged” as proposed in the "Decision"; more importantly, as urban land value increased, it continuously gave rise to rural land value, and farmers' awareness of land rights also rose greatly, especially because the reallocation of urban and rural factors urgently needed to be based on clearer property rights. To let the market play a decisive role in resource allocation, this lesson of rights confirmation must be completed. At the same time, the new round of farmland rights confirmation is also aimed at resolving a series of disputes left over within rural areas caused by the incomplete alignment of relevant rights relationships in the first and second rounds of contracting.

More than five years have passed, and the policy requirements for rights confirmation still have not been fully implemented, which shows that farmland rights confirmation is not a matter of one morning or one evening. In order not to let the rights confirmation requirements remain only in policy texts, the 2013 No. 1 Document set out a specific timetable, requiring “using 5 years to basically complete the work of confirming, registering, and certifying rural land contractual management rights”. In response to the specific problems that may be encountered in rural rights confirmation, the 2014 No. 1 Document proposed “fully relying on farmers to independently consult and resolve contradictions and problems encountered in the work; rights and land may be confirmed, or rights and shares may be confirmed without confirming land”. However, this formulation is easy to misread and also easy to lead to deviations. Among these, “confirming rights and shares without confirming land” is a issue that needs special clarification and is well worth studying.

Generally, clear land property rights should reflect the corresponding relationship between specific people and specific plots. Strictly speaking, rural land rights confirmation must confirm land. The two methods mentioned in the 2014 No. 1 Document, “confirming rights and land” and “confirming rights and shares without confirming land”, should respectively apply to different scopes, rather than any situation of land rights relationships being freely selectable between the two methods. Land that has already been clearly allocated to households in the second round of contracting should, on the basis of renewed improvement, be confirmed by confirming rights and land to households. For situations where it is not easy to confirm land to households, rights should be confirmed to households by the method of confirming shares, that is, gathering land property rights that drift in the “public domain” or in collective economic organizations back to specific farming households and individuals, so as to form a real economic constraint relationship for the collective organization. It should be said that “confirming rights and shares without confirming land” in this sense reflects a major progress of this round of farmland rights confirmation. Applying “confirming rights and land” and “confirming rights and shares without confirming land” respectively in different scopes can form a complete combination of land rights confirmation methods, can let farmers take a reassuring pill on rights confirmation, and is also conducive to promoting smooth land circulation.

⟦NL> But in reality, some places have expanded the applicable scope of “confirming rights and shares without confirming land” in actual operation. For example, because many aspects of the first and second rounds of contracting work were not done carefully, some places, fearing trouble in rights confirmation, directly calculated land distribution shares based on the so-called number of members, and completed this rights confirmation task by the method of “confirming rights and shares without confirming land”. In addition, because the previous round of land contracting was imperfect, there were many disputes in rural land contracting relationships, and some places did not take the initiative to handle the disputes, but also used the so-called “confirming rights and shares without confirming land” method to perfunctorily deal with them. These practices all run counter to the purpose of this round of farmland rights confirmation, and the result is no different from pinching one's nose to deceive one's eyes. If rights confirmation that should confirm land cannot be carried out properly, then the policy of farmland rights confirmation will truly be difficult to implement.

The pilot work requirements for the reform of rural collective asset property rights, which are about to be advanced, require granting farmers the rights to possess, receive income from, withdraw with compensation, mortgage, guarantee, and inherit shares of collective assets. In order to protect the rights of members of farmers' collective economic organizations, carrying out classified or comprehensive shareholding reform of various types of assets is the fundamental way to solve the problem of members' rights. The land-related part related to the reform of rural collective asset property rights is an important content of “confirming rights and shares without confirming land”.

Specifically, the scope of “confirming rights and shares without confirming land” should also be strictly limited to the following main aspects: First, public welfare land within the village, with shares determined according to the original proportion of land confirmed per person, or the proportion of existing contracted area of each farming household. Such land includes public roads, public ponds, and public rice-drying yards, so that this part of land can later undergo overall “change of owner and change of use”, and the value of its transaction can be distributed relatively fairly in place. Second, village collective construction land should also have corresponding shares determined in a similar way, converting the land's equity or corresponding value to households. As for confirming rights to households by the method of pure land shareholding, this involves the issue of liquidation and compensation for the bundling of equity and exclusive assets. Of course, farming households may also choose to invest land whose rights have been confirmed through share conversion into collectively operated organizations in the form of creditor's rights. Third, the situation where land is concentrated after land circulation and the terrain is changed as a result. This involves the separation of contractual rights and management rights. The land rights and interests corresponding to the original contractual rights may be registered by share in the concentrated land, but for the large-area managed land after concentration, a combined relationship diagram of the “four boundaries” reflecting the original contractual rights of each farming household must still be attached. Fourth, where collective construction land not previously converted into shares to households is reclaimed and then operated on a large scale, rights should also be confirmed to households according to relevant methods. Fifth, village collectively retained cultivated land, water surfaces, and low-slope land should also be confirmed to households by the method of confirming shares according to historical land attribution. Sixth, where land that has already had rights and land confirmed is directly circulated by way of shareholding, there is a separation of contractual rights from management rights and other related rights. The original contractual rights will be transformed into the form of equity within the scope of large-area cultivated land after the circulation of management rights (in actual operation there is also the form of preferred equity paying fixed dividends). This is also content of subsequent decentralized rights confirmation through land transactions, that is, a special form of converting “confirming rights and land” into “confirming rights and shares without confirming land”.

In fact, the value of any land is related to the land's location and natural attributes. Therefore, from the perspective of determining value rights, if the rights and interests of any indivisible land as a whole are to be fully confirmed in place, ultimately the land location boundaries need to be determined, that is, the overall rights confirmation of this type of land ultimately requires confirming land. Of course, for concentrated land shared by members, its value has already become homogeneous, and the land rights enjoyed by each member only need to be confirmed by share in place. From the relationship between the whole and the individual in economic rights, one can see a corresponding relationship between overall “confirming rights and land” and internally homogeneous “confirming rights and shares without confirming land”.

The success or failure of reform lies in details, and some subtle trends have a relatively large impact on reform. The “confirming rights and shares without confirming land” referred to in this farmland rights confirmation should be a strict requirement within a limited scope, that is, within the applicable scope of this provision it must be strictly implemented in place, and outside this scope this method cannot be used. Other expanded practices will make rights confirmation move toward the opposite side and greatly reduce the value of rights confirmation.