Improve the Rural Property Rights System to Promote Growth in Farmers' Income

In the early 1980s, with the implementation of the household contract responsibility system, household business income was the main source of the rapid growth of farmers' net income. Entering the mid-to-late 1980s, the impact of institutional reform on agriculture gradually weakened, and the share of household business income in farmers' net income continued to decline, while wage income gradually became the main source of growth in farmers' income, mainly thanks to the transfer of rural labor and the improvement in the state's protection of labor rights.

Farmers' property income is directly linked to the rural property rights system. After the reform and opening up, farming households had basically obtained complete property rights over family property other than land and housing. In the mid-to-late 1980s, farming households gradually obtained stable land contract and management rights, but the right of transfer was restricted, so they could not obtain income such as rent or interest. After entering the new century, the state encouraged land transfer, and farming households could obtain rental income from transferred land or dividend income from using land as equity. As for rural homestead land, farming households only have the right of use, while the right of transfer and the right to profit remain strictly restricted. Although some areas piloted the transfer of rural homestead land within the village collective, in practice its contribution to farming households' property income was negligible. In practice, reform of the rural collective property rights system is an important way to increase farming households' property income.

At present, rural property rights still have not been fully clearly and effectively defined, and in the next stage, to promote increases in farmers' income, priority should be given to improving institutional arrangements for rural property rights. First, implement the policy of keeping land contract and management rights unchanged for the long term. Keeping land contract relations unchanged for the long term and stabilizing farmers' contracting expectations is conducive to land transfer transactions and to protecting and developing agricultural productivity. Second, legally grant land contract and management rights the functions of mortgage and guarantee. Revise laws such as the "Land Law" and the "Guarantee Law" as soon as possible, and issue relevant management measures and guiding opinions to remove obstacles in legal terms. Third, stop the gratuitous allocation of homestead land and allow farmers' owner-occupied houses to be mortgaged and transferred on a larger scale. Change the gratuitous allocation of homestead land to paid transfer, so that the property value of farmers' houses can be reflected, and carry out pilots for transferring houses on a larger scale. Fourth, deepen reform of the rural collective property rights system and protect and realize farmers' property rights and interests. Solidly advance the reform to convert rural collective assets and resources into shares and equity, establish and improve the rural property rights trading market, and allow farmers to settle in cities while bringing with them property rights such as land.