A Beneficial Exploration of Turning Resources into Capital, and the Difficult Issues Still to Be Resolved
On July 22, 2013, General Secretary Xi Jinping came to the Wuhan Citizens Home for research, walked into the Wuhan Rural Comprehensive Property Rights Exchange (hereinafter referred to as the Wuhan Rural Exchange), asked in detail about the property rights transaction process, and affirmed that “this is a beneficial exploration.” The General Secretary pointed out that to deepen rural reform and improve the basic rural management system, it is necessary to carefully study the relationship among the three rights of rural land ownership, contract rights, and management rights; land transfer must respect the wishes of farmers, safeguard basic farmland and food security, and be conducive to increasing farmers' incomes.
Through the “beneficial exploration” of the Wuhan Rural Exchange, what kind of demonstration significance and reference value does it have for comprehensively deepening reform, especially for advancing rural reform? Recently, the reporter conducted an in-depth investigation.
An exploration that satisfies the masses
The satisfaction of the people is the highest standard for reform and development. The Wuhan Rural Exchange used innovative service methods to support the development of new rural business entities, and used abundant reform results to benefit the farmer masses, winning unanimous affirmation from grassroots cadres and the masses.
Farmers are satisfied. In Mafan Village, Xinzhou District, most young and middle-aged laborers had gone out to work, and some land was left barren. Through the Wuhan Rural Exchange, 400 mu of abandoned land was transferred: paddy fields at 800 yuan per mu per year, dry land at 350 yuan per mu per year, with a 10% increase every 5 years. Farmer Ma Yan said: “The Rural Exchange is a money-making office that helps farmers, and also a problem-solving office that helps village cadres.”
Family farms are satisfied. Li Weihe is a family farm owner in Datan Village, Datan Office, Huangpi District, Wuhan, who transferred 210 mu of land in the village to grow grain and vegetables. According to relevant policies and regulations, he could borrow at most 50,000 yuan per year from the bank based on personal credit alone. Through an introduction, Old Li handled a rural land management right mortgage loan through the Wuhan Rural Exchange, using the management rights of all the land he had transferred as collateral, and borrowed 600,000 yuan from the bank. He immediately built 30 steel-frame greenhouses, and the farm's development leaped to a new level from quantity to quality.
Specialized households are satisfied. Specialized large-scale farmer Zhang Yuansheng began producing kudzu root powder bean silk in 2002. In 2007, he expanded production scale and transferred 879 mu of land. Development lacked money and there was no way to borrow, so later the Wuhan Rural Exchange helped him issue a property rights transaction verification certificate, and he obtained a bank loan of 2 million yuan.
Cooperatives are satisfied. The aquaculture cooperative in Jingang Village, Cangbu Street, jointly operated with Xinkai Feiteng Ecological Agriculture Development Co., Ltd., leading villagers to engage in prawn farming. Development lacked funds, so Jin Liansheng, the person in charge of the cooperative, also took a try-and-see attitude and used the verification certificate issued by the Rural Exchange to apply to the bank for a loan. To his delight, using management rights alone, he successfully borrowed 9 million yuan from the district rural commercial bank, solving the urgent need.
Leading enterprises are satisfied. Wuhan Yinhe Ecological Agriculture Co., Ltd. is a leading agricultural enterprise in Wuhan. In 2007, Yinhe Company transferred 2114.05 mu of land in Zhulin Village, Fasi Village, and Dalu Village, Fasi Town, Jiangxia District, to engage in ecological circular agriculture development. The Wuhan Rural Exchange helped it obtain a rural land management right mortgage loan of 10 million yuan, which not only solved the “bottleneck” restricting the enterprise's development, but also set the largest single loan amount for similar projects nationwide at that time.
Village collectives are satisfied. The Wuhan Rural Exchange took it as its duty to support the development of paired assistance village collectives, providing categorized guidance, and especially helping “hollow villages” make connections and introduce rural comprehensive property rights mortgage loan projects. For example, it handled rural property rights mortgage loans of 22.5 million yuan for 5 “hollow villages” including Shichong Village and Jinligou Village in Caidian Street, Huangpi, involving 3512.89 mu of collective land, revitalizing idle assets, increasing collective economic income, and turning “hollow” villages into real entities.
Agricultural scientists are satisfied. “Zhongyou 519” was bred by researcher Li Yunchang of the Oil Crops Research Institute of the Chinese Academy of Agricultural Sciences, and has very high potential commercial value. The Wuhan Rural Exchange carried out all-around packaging and planning for the project, solicited 5 interested enterprises to participate in the bidding activity, and finally Hubei Provincial Seed Group won the bid for 10 million yuan, which was 5 million yuan higher than the transferor's expected transaction price. This move broke the traditional method of mainly adopting one-to-one negotiated transfer for agricultural intellectual property, greatly enhancing its economic and social value.
An exploration that leads the nation
The Wuhan Rural Exchange was officially inaugurated on April 30, 2009, and is the second comprehensive rural property rights trading institution in the country and the first in the central region. By the end of 2013, it had organized 1669 transactions of various types of rural property rights, with a transaction amount of 9.969 billion yuan, involving 981,600 mu of rural land area, benefiting 160,000 farming households. The transaction scale led similar exchanges nationwide. As an exchange that explored ahead, the “Wuhan model” was drawn on nationwide.
Many types of trading items. There are mainly 10 major categories: rural land contract management rights, use rights of “four types of wasteland” of rural collective economic organizations, contract management rights of aquaculture water surfaces of rural collective economic organizations, use rights of rural collective forest land and ownership of forest trees, agricultural intellectual property, equity of rural collective operating organizations, ownership of rural houses, use rights of idle rural homesteads, use rights of agricultural production facilities, and ownership of second-hand agricultural machinery, etc. The variety of trading items is the greatest among similar exchanges nationwide.
Strict supervision system. Wuhan established a Rural Comprehensive Property Rights Trading Supervision and Management Committee, composed of 17 departments, responsible for supervising rural property rights transactions. They formulated a series of systems for operation supervision, operational management, risk prevention and control, and protection of farmers' interests.
Complete market system. With the Wuhan Rural Exchange as the leader, a three-level trading platform at the city, district, and street levels was established, uniformly supervised by the Municipal Rural Supervision Committee, implementing a “six unifications” market management model, namely unified supervision and management, unified trading rules, unified information release, unified transaction verification, unified fee standards, and unified platform construction. Branch institutions for rural property rights transactions have now been approved and established in 5 districts and 24 townships.
Long service chain. In accordance with the operating method of “unified acceptance, division of duties, and centralized management,” the Wuhan Rural Exchange provides rural property rights transactions with a full chain of 11 aspects of one-stop services: policy consultation, information release, project packaging, transaction organization, transaction verification, price settlement, business training, price guidance, asset evaluation, guarantee financing, and bidding. The service chain is the longest among similar exchanges nationwide.
High financing amount. It innovatively carried out mortgage financing services. It has now partnered with 5 banks, including Wuhan Rural Commercial Bank, Bank of China, Minsheng Village Bank, Hankou Bank, and China Minsheng Bank, and has achieved a total of 1.147 billion yuan in rural comprehensive property rights mortgage loans for agricultural enterprises, cooperatives, and large-scale farming households, among which the highest single loan amount reached 55 million yuan, creating the national record for both the cumulative amount and the single amount of rural property rights mortgage loans.
Heavy pilot tasks. In 2011, the State Council approved the establishment of the Wuhan Rural Property Rights System Reform Pilot Zone. As a pilot in the reform pilot zone, the Wuhan Rural Exchange undertook important pilot tasks such as expanding the varieties of rural property rights transactions, extending the rural property rights transaction service chain, building a bidding platform for agriculture and agriculture-related projects, and constructing the rural property rights trading market system.
Exploration of the separation of three rights
Reform and innovation are the soul of the Wuhan Rural Exchange. The separation of three rights is the most fundamental innovation, management right mortgage guarantee is the most significant innovation, and risk prevention is the most critical innovation. There are also innovations in many aspects such as comprehensive transactions, market cultivation, system establishment, and institutional construction.
Institutional innovation through the separation of three rights. The three rights and interests of land ownership, land contract rights, and land management rights are separated, and management rights are split out from the “integrated whole” of contract management rights. Ownership is returned to the collective, contract rights are left to farmers, and management rights are handed over to the market, realizing the institutional innovation of “implementing ownership, stabilizing contract rights, and loosening management rights,” and completing the practical exploration of mortgage guarantees for farmers' contracted land management rights. This provided powerful empirical evidence of early piloting for major reform and innovation proposed in the “Decision” of the Third Plenary Session of the 18th Central Committee, such as “granting farmers the rights to possess, use, benefit from, and transfer contracted land, and the rights to mortgage and guarantee contracted management rights” and “prudently and steadily advancing the mortgage, guarantee, and transfer of farmers' housing property rights.”
We can briefly trace the historical origins of this major institutional innovation in order to understand the historical position and contemporary value of the “Wuhan exploration.” After land contracting came land transfer. At first, transfer was not recognized and was even considered illegal, so it was underground and carried out quietly. Later, as large numbers of migrant workers went out, land transfer became an irresistible rural wave, with growing scale, increasingly flexible forms, ever-newer models, and more and more participants. In 2006, after the agricultural tax completely withdrew from China's historical stage, land transfer in Hubei reached a watershed. Earlier land transfer belonged to a spontaneous stage, mostly “oral agreements” or “private agreements”; even when there were contracts, they were not standardized, disputes were likely to arise and difficult to resolve, and only transfer was possible, not financing. Later land transfer entered an orderly stage, and Hubei Province and Wuhan City successively issued a series of regulatory systems and support policies. At the end of 2011, Wuhan was approved as a new round of national rural reform pilot zone, exploring rural property rights system reform among 24 pilot zones nationwide. In 2012, Hubei issued the “Hubei Province Rural Land Contract Management Regulations,” proposing the principle of “separation of three rights” for rural land ownership, contract rights, and management rights, namely clarifying land ownership, stabilizing contract rights, and loosening management rights. This formulation pointed out the direction for the exploration of the rural property rights system and was regarded by many domestic experts as a national first. The Central Rural Work Conference held at the end of 2013 specifically promoted Hubei's experience in exploring rural property rights system reform.