A New Round of Land Reform Is Imminent, and the Distribution of Interests Tests the Government's Wisdom
A new round of rural land reform has slowly begun. Yesterday, Xi Jinping, General Secretary of the CPC Central Committee and head of the Central Leading Group for Comprehensively Deepening Reform, presided over the seventh meeting of the Central Leading Group for Comprehensively Deepening Reform. The meeting reviewed the "Opinions on the Pilot Work of Rural Land Expropriation, Market Entry of Collective Operating Construction Land, and Reform of the Homestead System." The meeting pointed out that the three bottom lines must be upheld: the nature of public ownership of land must not change, the red line for cultivated land must not be breached, and farmers' interests must not be harmed, and that progress should be advanced in an orderly manner on the basis of pilot projects. Industry insiders believe that the central government's review of the pilot opinions on land reform marks the pulling of the string on a new round of land reform. At present, issues such as the distribution of interests in rural land expropriation, the amendment of laws on collective operating construction land, and the withdrawal from homesteads still await resolution.
Market Entry of Collective Operating Construction Land: Law Amendment and Pricing Issues Remain to Be Resolved
As urban land in our country becomes increasingly tight, the market entry of rural collective operating construction land has attracted much attention from all sides. According to Article 63 of the currently effective Land Administration Law of our country, the right to use land owned collectively by farmers may not be granted, transferred, or leased for non-agricultural construction.
Chen Xiwen, deputy head of the Central Rural Work Leading Group and director of its office, previously stated that the scope for market entry of collective operating construction land is limited, and pilot projects must come before law amendment. It is understood that Beijing began confirming the right to use collective construction land this year. A relevant person from the Ministry of Land and Resources revealed that "currently, collective construction land with approved use rights in Beijing accounts for only 1%."
An authoritative person once revealed that in this land reform plan, agricultural land entering the market refers only to township and village enterprise land and public-interest undertaking land within collective operating construction land. For rural homesteads entering the market, pilot projects are still adopted first, exploring the promotion of mortgages, guarantees, and transfers of farmers' housing property rights. "Small property rights housing," which could effectively ease pressure on urban commercial housing, is still not recognized. The approach to non-operating construction land is also very conservative. The 2013 No. 1 Central Document clearly pointed out that "rural collective non-operating construction land may not enter the market." In this land reform plan, rural land circulation is still strictly limited to within rural collectives.
In addition, according to the requirements of the Third Plenary Session of the 18th Central Committee, rural collective operating construction land should enter the land market with "the same price and the same rights." How to set prices and supervise it is also an important part of institutional design.
Rural Land Expropriation: Distribution of Interests Tests the Government's Wisdom
Agricultural land expropriation has always been a difficult point and a key focus of the new round of land reform, especially the issue of interest distribution, which affects the whole situation with a single pull. The existing Land Administration Law stipulates that the compensation standard for expropriation of rural collective land may not exceed 30 times the average output value of the occupied cultivated land in the previous three years. In 2011, land expropriation compensation was about 103 yuan per sq m, while the average land transfer price was about 943 yuan per sq m. This means that the proportion farmers obtained from land revenue was less than 11%. Before the "Decision" was issued, outsiders had rumored that land compensation fees would increase 10-fold, and several officials from the Ministry of Land and Resources came forward to refute this.
Zhang Dawei, chief analyst at Beijing Centaline Property, believes that increasing farmers' income from land expropriation in this round of land reform has basically become consensus, but local governments are currently still quite dependent on land finance. Unless other replacement tax sources are found, localities will not easily give up land finance. The cake is only so big, and how to divide it really tests the government's wisdom. At present, local governments face problems such as slowing growth in fiscal revenue and local debt risks. It is expected that in this reform, farmers' returns in expropriation compensation may increase somewhat, but the intensity of the reform should not be especially great, since local finances still need to be taken into account.
Among experts participating in the formulation of official land reform policies, some proposed carrying out pilot projects first in the eastern region and the central and western regions, raising compensation ratios for all parties according to different standards. In this regard, Shenzhen already made explorations at the end of last year: when collective construction land was converted into industrial land, the village collective and individuals received 30% of the value-added returns. For the central and western regions, some experts proposed giving 30% to the county, 20% to the township, and the rest to the village collective and individuals.
Reform of the Homestead System: How to Withdraw Becomes the Difficult Point
In this land reform, the pilot plan for the homestead system has attracted the most attention. At present, China strictly prohibits urban residents from purchasing homesteads in rural areas, and the rights holder of homestead use rights is a member within the corresponding collective economic organization. However, with the development of urbanization, more and more farmers go to cities to work, causing the homesteads farmers own in rural areas to sit idle. According to statistics, at present 10%-20% of rural homesteads in China are idle, and in some areas the idle rate is even as high as 30%. How idle homesteads should be withdrawn has become a difficult point urgently needing resolution in the pilot plan for homestead reform.
It is reported that according to the "pilot plan" that has basically taken shape, the pilot work on rural homestead reform will proceed according to the principle of "handling by category." The so-called categories are "traditional agricultural areas outside the boundary of urban-rural construction land expansion" and "areas within the boundary of urban-rural construction land expansion." For these two different situations, the principle of "one household, one homestead" will be implemented in different ways.
According to information from the Department of Land and Resources of Zhejiang Province, Zhejiang requires that, according to the principles of "one household, one homestead, demolish the old and build the new, and statutory area," a special survey of rural homestead use be carried out across the province to find out the current situation and actual needs of farmers building houses, especially households without houses and households with dilapidated houses, and that implementation plans for farmers' housing construction be formulated each year, clarifying the list of house builders, planned site selection, land scale, scheduling arrangements, and safeguard measures for plan implementation. Rural residential areas should be set up with townships as units, guiding farmers to build houses in concentrated areas according to planning requirements.