Land system reform should adhere to legislation first, reform second

Some important measures for rural land system reform proposed at the Third Plenary Session of the 18th CPC Central Committee are consistent with the basic principles of existing laws and regulations, but some formulations conflict with existing laws and regulations. A major feature of past land system reform was to pilot first, and after summing up experience, elevate it into law. The Central Committee requires that all major reforms in the future must have a legal basis. Against this background, the role of the rule of law in guiding and promoting land system reform must be brought into play, and legislation must come first, reform second. Even for piloting first, legal authorization must be obtained and procedures must be carried out in accordance with the law, ensuring that land system reform is brought onto the track of the rule of law.

Deepening rural land system reform means establishing a modern rural land property rights system with “clear ownership, clearly defined rights and responsibilities, strict protection, and smooth circulation.” Improving the rural land property rights protection system, making the land rights farmers possess more complete and better guaranteed, and enhancing the consistency of urban and rural land rights, is the key to rural land system reform.

⟦NL> At present, comprehensively advancing rural land system reform in accordance with the law should mainly focus on the following aspects.

1. Stabilize rural land contracting relationships in accordance with the law

First, clarify the form of realization for the long-term unchanging nature of land contracting relationships. Some places conducted a second round of land contracting as early as 1993, and the 30-year contract period will expire in 2023. Many farmers still feel uneasy about the 30-year contract period and still have concerns about the long-term stability of the contract period. In order to fundamentally remove farmers' concerns, the Third Plenary Session of the 18th CPC Central Committee once again required

“stabilizing rural land contracting relationships and maintaining them unchanged for the long term.” Several No. 1 documents of the Central Committee required studying the specific meaning and form of realization of “unchanged for the long term.” “Unchanged for the long term” is a major decision of the Central Committee for deepening rural land system reform, and is a continuation, improvement, and development of the existing land contracting policy. To implement “unchanged for the long term,” the key is to clarify whether a contract term will be set after the second round of contracting expires, and if so, exactly how many years it will be. If no contract term is set, land contractual management rights would approach collective land ownership and could easily be misread as promoting land privatization. We lean toward a term-limited “unchanged for the long term.” This would help maintain the stability and continuity of the existing land contracting policy, help achieve a smooth transition to “unchanged for the long term” after the current contract period expires, and help maintain the unity of the property rights legal system. At the same time, it would also make it easier for local areas to handle issues such as human-land conflicts, circulation periods, and compensation and resettlement for land expropriation. Referring to the provisions of current laws on the term of urban residential land use rights and forest land contracting rights, it is suggested that the contract term for “unchanged for the long term” be set at 70 years, starting after the expiration of the second-round 30-year contract period. Article 14 of the Land Administration Law provides that “the term of land contractual management shall be thirty years,” and Article 126 of the Property Law provides that “the contract period for cultivated land shall be thirty years.” Therefore, it is suggested that these two provisions be amended as soon as possible.

Second, clearly define farmers' qualifications for obtaining contracted land. At present, in some suburban rural areas, due to the lack of legal and policy basis, the confirmation of qualifications for members of rural collective economic organizations and the confirmation of entitlement to land and collective economic income distribution can only be handled according to village rules and folk agreements, resulting in difficulty in implementing land contracting rights for later-migrating farmer households and rural married-out women, and the rights and interests of vulnerable groups such as rural women have long failed to be effectively protected. To stabilize land contracting relationships, this legal gap must be filled, and farmers' qualifications for obtaining contracted land must be clearly defined. It is suggested that corresponding provisions be added to laws such as the Rural Land Contracting Law to provide legal norms for farmers' qualifications for obtaining contracted land.

Third, strengthen the legal effect of registration and certification for the confirmation of rural land contractual management rights. According to the provisions of the Property Law, upon lawful registration, one enjoys rights of a property nature. Without lawful registration, it is only a contractual right and in nature belongs to a creditor's right. The work of confirming, registering, and certifying rural land contractual management rights is foundational work in land system construction. Only by clarifying and enhancing the legal effect of registration will farmers promptly apply for and change land rights certificates, and will value their land rights certificates as much as they value marriage certificates.

2. Regulate the circulation of rural contracted land in accordance with the law

At present, according to legal provisions, the specific methods of rural contracted land circulation include subcontracting, transfer, exchange, and lease. In recent years, new circulation methods such as mortgaging and shareholding with land contractual management rights, as well as industrial and commercial enterprises entering the contracted land circulation market, have become focal points of attention. Current laws impose strict restrictions on the mortgage and shareholding of contracted land. Article 34 of the Guarantee Law, Article 32 of the Rural Land Contracting Law, and Article 184 of the Property Law all provide that only land contractual management rights obtained by means other than household contracting may be mortgaged, while land contractual management rights obtained through household contracting may not be mortgaged. Article 49 of the Rural Land Contracting Law and Article 133 of the Property Law provide that land contractual management rights obtained by means other than household contracting may be used for shareholding, but do not provide that land under household contracted operation may also be used for shareholding. According to Article 42 of the Rural Land Contracting Law and Article 35, paragraph 4 of the Measures for the Administration of the Circulation of Rural Land Contractual Management Rights issued by the Ministry of Agriculture, the current form of land circulation through shareholding is strictly limited to farmer households contracting land. From the perspective of the existing legal framework, because central policy has consistently discouraged industrial and commercial enterprises from leasing and operating farmer contracted land for long periods and on a large scale, the law also has no clear provisions on how to protect farmers' contractual management rights and interests when industrial and commercial enterprises enter the circulation market. To implement the spirit of the Third Plenary Session of the 18th CPC Central Committee, the following issues need to be resolved at the legal level:

First, grant mortgage rights to land contractual management rights. As the most important property right of farmers, if land contractual management rights can be used for mortgage, it can further enrich farmers' disposal rights over contracted

land and will, to a certain extent, broaden rural credit supply channels. Contracted land is important property for farmer households and is more suitable as general collateral. In fact, with the year-by-year increase in land rents, the value of rural land nationwide may be even greater. Allowing mortgages on land contractual management rights is conducive to realizing the return of funds to agriculture and rural areas, and will undoubtedly play a positive role in promoting agricultural development and increasing farmers' incomes. It is necessary to promptly amend the provisions of the Property Law and the Guarantee Law that land contractual management rights may not be used for mortgage, and clearly grant mortgage rights to land contractual management rights. Land contracting rights are land rights acquired by farmers on the basis of collective membership qualifications and do not change due to the transfer of the land use subject or changes in the mode of utilization. This is the foundation of China's basic rural operation system. When establishing mortgage rights on contracted land, the object should be the management right. When farmers mortgage the management right of contracted land for a certain number of years to financial institutions or other creditors, it does not affect the contracting and subcontracting relationship between farmers and the collective. If farmers cannot repay the mortgage debt upon maturity, creditors cannot replace the contracting party as new members of the collective. To prevent farmers from losing land contractual management rights and thereby affecting their basic livelihood, conditions limiting mortgages on contracted land should be clearly specified, such as providing that farmers may only mortgage part of their land.

Second, regulate shareholding with land contractual management rights. The Decision of the Third Plenary Session of the 18th CPC Central Committee proposed, “allow farmers to use land contractual management rights as shares to develop agricultural industrialized operation.” Allowing shareholding with land contractual management rights breaks through existing legal boundaries, so legal provisions need to be amended. It must be made clear and reiterated that farmers' land shareholding can only be used for agricultural production. Industrial and commercial enterprises should be encouraged to establish close interest linkage mechanisms with farmer households and drive farmers to increase incomes together. In order to effectively prevent risks brought by farmers' shareholding with land contractual management rights, when amending laws and regulations, it should

be made clear that farmers may only contribute the management right of contracted land as priced shares, and it should be provided that when a company goes bankrupt, farmers' land contracting rights must be retained; for farmers whose basic livelihood is not guaranteed, reasonable restrictions should be placed on the cancellation of land management rights, and relief channels should be provided for farmer households.

Third, establish and improve an access and supervision system for industrial and commercial enterprises leasing farmer contracted land. In recent years, there have been more and more instances of industrial and commercial enterprises leasing rural land for agricultural production and operation. Leasing land for operation by industrial and commercial enterprises has both favorable aspects for agriculture and possible adverse effects. On the positive side, it can leverage advantages in capital, technology, and management, input modern production factors and operation models into agriculture, improve agricultural production conditions, develop facility agriculture, and raise the level of agricultural modernization. However, long-term, large-scale leasing of farmer contracted land by industrial and commercial enterprises has also aroused concerns among some people, such as intensifying the “non-grain” and even “non-agricultural” use of land circulation, and squeezing farmers' employment space. As industrial and commercial capital enters agriculture and the scale of participation in farmland operation expands, there is an urgent need to establish regulations to seek advantages and avoid disadvantages. When industrial and commercial enterprises lease farmer contracted land, they must fully respect farmers' wishes, and it must be entirely based on autonomous, equal consultation between enterprises and farmers in accordance with the law; forced circulation is not allowed, and the agricultural use of land must not be changed. Relevant provisions or clauses should be formulated in relevant laws to establish an access and supervision system for industrial and commercial enterprises leasing farmer contracted cultivated land. Qualification review is needed for industrial and commercial capital leasing farmer contracted land exceeding a certain scale. The focus of review should be the enterprise's business scope, investment capacity, technical qualifications, circulation purpose, circulation period, circulation price, and payment method, etc.

3. Accelerate reform of the rural collective land expropriation system in accordance with the law

There are indeed many contradictions in the land system. The biggest problem is that the scope of land expropriation is too broad, the compensation standards for farmers are obviously too low, and farmers' interests are seriously harmed. The land expropriation system is now difficult to sustain, and the Land Administration Law should be amended as soon as possible to provide support for reforming the land expropriation system.

First, from the perspective of protecting farmers' interests, the urgent task is to reform the current land expropriation compensation method. The previous government initiated revision of Article 47 of the Land Administration Law (land expropriation compensation standards), but it was not completed. This issue should not be delayed any longer; the longer it is delayed, the greater the harm to farmers' interests and the more social contradictions accumulate. At present, in accordance with the requirements proposed at the Third Plenary Session of the 18th CPC Central Committee to “establish a mechanism for distributing land value-added benefits that takes into account the state, the collective, and individuals, and reasonably increase individual benefits” and to “ensure that farmers fairly share in land value-added benefits,” we should adhere to the principle of fair and reasonable compensation and focus on solving problems such as the decline in living standards and lack of long-term livelihood security for farmers whose land is expropriated caused by excessively low compensation and resettlement standards. It is necessary to change the principle of “compensation according to the original use of the land” and the compensation standard that “the total compensation shall not exceed thirty times the average annual output value of the three years before the land is expropriated,” take into account supply and demand relationships and land location factors, refer to the market price of land, and use regional land prices as the basic basis for establishing compensation. The State Council should be authorized to formulate the Regulations on Compensation for Expropriation of Rural Collective Land. The practice of “reserved land resettlement,” already widely implemented in various places, provides land support for farmers whose land is expropriated and collectives to engage in development and operation, establish new enterprises, and so on. This is an important compensation method adapted to the requirements of the market economy and has played an important role in safeguarding the long-term livelihood of farmers whose land is expropriated. This should be promoted and recognized in law.