Basic Principles That Must Be Accurately Grasped in Land Transfer

This website reports  Guiding the orderly transfer of rural land and developing appropriately scaled operations is a major policy measure for building a new type of agricultural management system and developing modern agriculture. This issue concerns the vital interests of hundreds of millions of farmers, relates to the consolidation and improvement of the basic rural management system, and bears on the overall situation of economic and social development. We should base ourselves on the basic national condition that China has a large population and little land, proceed from advancing agricultural modernization with Chinese characteristics, safeguarding farmers' land rights and interests, and stabilizing the overall rural situation, comprehensively understand and accurately grasp the basic principles that must be adhered to, do a good job in system design, and advance actively yet prudently to avoid taking detours, so that farmers become active participants and true beneficiaries.

I. Follow the “separation of three rights” and liberalize land management rights

In China's rural reform in the late 1970s, through implementing the “separation of two rights” of collective ownership of rural land and farmers' contracted management rights, farmers' enthusiasm was greatly mobilized and rural productive forces were greatly liberated and developed. As large numbers of rural people migrated away, in some areas during the process of land transfer, land contractual management rights became separated again, evolving into two parts, contractual rights and management rights, thus forming the so-called state of “separation of three rights”: ownership, contractual rights and management rights. In the next step of deepening rural land system reform, implementing collective ownership, stabilizing farmers' contractual rights and liberalizing land management rights must be taken as the basic guideline.

First, implement collective ownership. The implementation of collective ownership of rural land ensures that farmers equally possess the most important means of agricultural production. This system is the “soul” of the basic rural management system and an important institutional feature of socialism with Chinese characteristics. In advancing rural land system reform, the collective ownership system of rural land must not be undermined. Implementing collective ownership means actively exploring ways to realize collective ownership of rural land and establishing and improving a rural collective land property rights system that adapts to the requirements of the socialist market economy and conforms to the reality of the primary stage.

Second, stabilize farmers' contractual rights. Under the household contract system, the land rights obtained by farmers are composed of contractual rights and management rights. In the process of land transfer, land contractual management rights can be separated. Only farmer households that are members of collective organizations possess land contractual rights. This is an inherent requirement of the basic rural management system. Stabilizing farmers' land contractual rights means ensuring that during the contract period, no organization or individual may force farmers to give up contracted land. No matter how contractual management rights are transferred, collective land contractual rights belong to farmer households, and no other entity can replace the land contracting status of farmer households.

Third, liberalize land management rights. Under the household contract system, the object of land transfer is land management rights. Clarifying this in theory and policy is of great significance. Since reform began, we have consistently emphasized correctly handling the relationship between the stability of the land contract system and land transfer. Stability means stabilizing farmers' land contractual rights; transfer means liberalizing land management rights. On the premise of adhering to collective ownership of rural land, promoting the separation of contractual rights and management rights and liberalizing land management rights can avoid two tendencies in understanding and practice: whenever stability is mentioned, it seems that the flow of management rights is not allowed, and whenever transfer and concentration are mentioned, it seems that the only option is for the collective to take back farmers' land contractual rights. Taking the “separation of three rights” as the basic guideline, and using the long-term unchanged nature of existing land contractual relationships and the stability of farmer households' land contractual rights to respond to the transfer and concentration of land management rights, responding to all changes by remaining unchanged, is conducive to enabling both land contractors and actual operators to establish stable expectations and will make the basic rural management system full of more lasting institutional vitality. To liberalize land management rights, it is necessary to further clarify the mutual rights relationships and forms of realization among collective land ownership, land contractual rights and management rights in land transfer, accelerate the development of diverse forms of land management rights transfer markets, and improve the mediation and arbitration system for disputes over land contractual management transfer.

II. Base on farmer household operations and actively cultivate new types of agricultural operating entities

From the practice of agricultural development in countries around the world, household operation is the most common form of agricultural operation. The basic characteristics of agricultural production are spatial dispersion and the need to respond promptly to tiny changes in the natural environment, which makes the cost of supervising agricultural production relatively high. The economic interests among members of farmer households are highly consistent, so there is no need for precise labor measurement and supervision. Compared with other operating methods, household operation has better adaptability in agriculture. It not only adapts to traditional agriculture based mainly on manual labor, but can also adapt to modern agriculture that uses advanced science and technology and production methods. In the process of China's agricultural modernization, household operation contains enormous potential and has broad development prospects. There is no issue of changing the foundational status of household operation after the level of productive forces rises. Household operation is now, and will also be in the future, the most basic form of agricultural operation in China. The essence of agricultural scale operation is not a negation of household operation, but the realization of specialization and socialization of agricultural production links by improving the resource allocation and external environment of household operation. Therefore, to develop appropriately scaled agricultural operations, we must adhere to the foundational status of household operation, should not isolate scale operation from household operation, and even less should we set household operation in opposition to agricultural modernization. At the same time, we must handle well the relationship between developing household operation and multiple operating methods such as collective operation, cooperative operation and enterprise operation, vigorously cultivate new types of agricultural operating entities, promote the common development of multiple agricultural operating methods, and accelerate the building of a three-dimensional and composite modern agricultural operating system based on farmer household operation, linked by cooperation and association, and supported by socialized services.

First, innovate the development mode of household operation. Emphasizing the foundational status of agricultural household operation absolutely does not mean rigidifying and clinging to the current dispersed, ultra-small-scale land operation method. We must, in accordance with the spirit of the 18th National Congress of the Communist Party of China and the Third Plenary Session of the 18th Central Committee, innovate the development mode of household operation, actively guide land transfer to specialized large households and family farms, and vigorously raise the level of intensification and scale of household operation. We should focus on developing family farms that use family members as the main labor force, take agriculture as the main source of income, and engage in specialized and intensive agricultural production, making them a vital force for developing modern agriculture. We should establish and improve policy measures supporting the development of family farms and tilt newly added agricultural subsidies toward family farms. We should better provide support and services to entities operating grain production at scale. We should guide farmers to voluntarily carry out “exchange and consolidation of land” to solve the problem of fragmented contracted land, facilitate cultivation, and realize relatively concentrated operation of contracted land.

Second, actively explore new agricultural operating methods. A small number of villages in China still retain the collective land operation method, and we should continuously explore and enrich the forms of realizing collective operation. We should guide farmers to contribute contracted land as shares to establish land share cooperative organizations. Farmers should be allowed to contribute land management rights of contracted land as shares and develop industrialized agricultural operations through multiple forms. In recent years, there have been more and more instances of industrial and commercial enterprises leasing rural land to engage in agricultural production and operation. From the positive side, leasing land for operation by industrial and commercial enterprises can give play to advantages in capital, technology and management, and input modern production factors and operating models into agriculture. However, rural China has a large population and little land. If industrial and commercial enterprises are allowed without restriction to enter the direct production field of agriculture and enclose large tracts of land, it will squeeze farmers' employment space and affect rural stability. In order to avoid large capital crowding out small farmers in rural areas, avoid large-scale land mergers, and avoid a large number of farmer households losing their status as operating entities, we must adopt a prudent attitude toward industrial and commercial enterprises leasing farmers' contracted land for long periods and large areas. As industrial and commercial capital enters agriculture and the scale of participation in agricultural land operation expands, there is an urgent need to explore and establish a strict access and supervision system for industrial and commercial enterprises leasing farmers' contracted cultivated land. There must be a clear upper limit control on industrial and commercial capital leasing farmers' contracted land, and qualification review and project review must be conducted. In particular, we must prevent industrial and commercial capital from arbitrarily changing the agricultural use of land after going to the countryside to lease contracted land, engaging in “non-agriculturalization” or “enclosure without use,” and damaging comprehensive agricultural production capacity. We should encourage and support industrial and commercial enterprises in developing modern planting and breeding industries suitable for enterprise-based operation. We should encourage and support them in entering agricultural product processing, circulation and socialized services, establishing close interest linkage mechanisms with farmer households and farmer cooperatives, and driving farmers to develop scale operations. We should explore and establish a land transfer risk guarantee fund system, mainly used to compensate farmers' interests harmed by breach of contract or poor operation by land-leasing enterprises.