Land rights are hard to protect because the bargaining platform is imperfect

In the process of transferring rural land contractual management rights, “lawful, voluntary and compensated” is a precondition and principle for safeguarding farmers' rights and interests fairly. But in real-world practice, scattered farmers lack equal bargaining power, and some grassroots governments that ought to play the role of “notary” have instead turned into the “leading party” in land transfer. Clearly, farmers should be helped as soon as possible to establish a fair and transparent market-based bargaining platform.

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⟦NL> In this issue, the topic of the “Economic Daily and CCTV Joint Commentary” —— an imperfect bargaining platform makes land rights hard to protect.

⟦NL> Recently, some media reported that when the Jinyang Road Subdistrict Office in Yaozhou District, Tongchuan City, Shaanxi, implemented a certain grape estate project, it forcibly used iron nets to enclose villagers' farmland and forced some villagers to sign and put their fingerprints on transfer authorization letters, arousing public discontent.

⟦NL> After the report was published, the local government investigated immediately. But what is noteworthy is that the “investigation” results did not directly respond to the details of the report; instead, they described in detail the legality of the transfer procedures and the “excessive” behavior of a “small number of farming households”. What the truth is remains to be sorted out. But what is certain is that on this grape estate project, the parties involved had major differences of opinion.

⟦NL> In recent years, the central government has clearly strengthened policies on managing and servicing the transfer of land contractual management rights and on establishing and improving the market for such transfers. Among them, “lawful, voluntary and compensated” is a precondition and principle for safeguarding farmers' rights and interests fairly. Many places also stipulate that without the consent of the original contracting farming household and without filing, the transferee's transfer of land is invalid. Clearly, the intent to protect farmers in the policy design is very explicit. But in real-world practice, why is it still difficult for farmers to exercise autonomy over land rights and interests that the state has already confirmed, causing “transfer” to become “forced transfer”?

⟦NL> Judging only from media reports, the problem seems to lie in enterprises' weak awareness of the rule of law and the oversimplified work style of a small number of grassroots officials. But closer study reveals that the root of the conflict lies in the inherent defect of the land transfer transaction system: namely, the bargaining power of the two transaction parties is severely unequal. In the final analysis, when facing highly organized entities such as enterprises, scattered farmers lack equal bargaining power.

⟦NL> Land transfer policy aims to grant farmers the right to let land property rights enter the market and realize value appreciation. But the process of transfer cooperation between enterprises and farming households is inevitably a complex process of negotiation and compromise. Including the above case in Yaozhou District, Tongchuan, we find that in a large number of land transfers: first, there is almost no bargaining process of haggling, and the group of farming households is basically simply divided into those who agree and those who do not; second, even if a small number of farming households propose a price, because expectations are vague, standards are lacking or negotiation skills are poor, their demands are regarded as “wildly demanding”, so the transaction falling through is unavoidable; third, and most critically, the role of grassroots government is ambiguous. Still taking Yaozhou District as an example, although Shaanxi Province issued guiding opinions on promoting the transfer of land contractual management rights and clearly stipulated that “transferring farming households should directly negotiate with the transferee; where village grassroots organizations act as intermediaries or coordinate the organization of transfers, the transferring farming households should issue authorization letters…… without authorization and consent, they must not forcibly transfer land on behalf of farming households” and other detailed content, from the perspective of operational practice, the intermediary and coordinating role of village grassroots organizations is not independent and is often led by grassroots government.

⟦NL> In fact, due to development pressure, performance-driven thinking and even entanglement of interests, some grassroots governments that ought to play the role of “notary” have in practice turned into the “leading party” in land transfer. In this way, the negotiation between enterprises and farming households becomes even more unequal: the negotiation between the two sides quietly turns into a “2 against 1” game among enterprises, government and farming households, and farming households' bargaining power in it becomes even more out of the question.

⟦NL> Clearly, in the current process of transferring rural land contractual management rights, farmers should be helped as soon as possible to establish a fair and transparent market-based bargaining platform. In this regard, we can draw on the rural asset trading center mechanisms being piloted in some places, bringing the business of transferring land contractual management rights into a standardized trading system —— through intermediary service procedures such as finance, evaluation, settlement, guarantees and payment protection, farmers' land use rights and interests can be traded, realized and appreciated openly, fairly and justly. In this way, the market's decisive role in resource allocation can be brought into play; not only can the original policy intent of protecting farmers' interests be achieved, but grassroots government can also avoid suspicion and do what government ought to do.

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