How can farmers be guaranteed a fair share of land value-added gains?

At present, China is in the process of rapid advancement of industrialization, informatization, urbanization, and agricultural modernization. Industrialization requires a continuous supply of high-quality labor from rural areas. In the transformation of farmers into workers in the secondary and tertiary industries, what should be done with their contracted land? Urbanization requires providing housing and public services for the newly added population. How can they exchange their rural housing for urban housing? Agricultural modernization requires the development of socialized large-scale agriculture. How can small-scale household land management be transformed into scaled and intensive management? For these urgent questions that need to be answered, the "Decision of the Central Committee of the Communist Party of China on Several Major Issues Concerning Comprehensively Deepening Reform" (hereinafter referred to as the "Decision") adopted at the Third Plenary Session of the 18th Central Committee of the Party has given clear answers. Earnestly studying, deeply understanding, and fully implementing the relevant arrangements of the "Decision" will provide strong impetus for the synchronized advancement of the four modernizations and contribute to achieving the goal of building a moderately prosperous society in all respects by 2020 set forth at the 18th National Congress of the Party.

I

Since the reform and opening up, more than 200 million migrant workers in China have left the land. Most of their contracted land in rural areas relies on returning home to farm during busy agricultural seasons or being entrusted to relatives for cultivation. This situation has brought two adverse consequences: first, extensive farming has reduced land output rates, and land abandonment has appeared in many places; second, unstable work in cities makes it difficult to form a high-quality industrial worker contingent, restricting the process of industrial upgrading. One way to resolve this contradiction is to encourage migrant workers who leave to transfer their contracted land, concentrating land toward scaled operating entities. This is in fact already being done in many places. The "Decision" of the Third Plenary Session of the 18th Central Committee clearly points out: "Endow farmers with the rights to possess, use, benefit from, and transfer contracted land, as well as the rights to mortgage and guarantee contracted management rights, and allow farmers to use contracted management rights as shares to develop industrialized operations. Encourage the transfer of contracted management rights on the open market to specialized large households, family farms, farmer cooperatives, and agricultural enterprises, and develop various forms of scaled operations." This is a major breakthrough in the rural land management system and an important reform made based on rural realities. According to the spirit of the "Decision," rural land ownership belongs to the village collective, contracting rights belong to farming households, and operating rights are liberalized. Ownership must be stabilized, contracting rights implemented, and operating rights revitalized. Ownership belongs to the village collective and may not be freely bought and sold, which can avoid land annexation. After farming households mortgage their contracting rights, if they lose the mortgaged item, what the creditor obtains is still only the usufructuary right to the land. With contracting rights belonging to farming households, farming households can obtain land subcontracting income, that is, property income. Once contracting rights have exchange value, the enthusiasm of farmers entering cities to transfer contracting rights will increase. Liberalizing operating rights and encouraging large grain-growing households, agricultural companies, and cooperatives to expand the scale of land operations will play an important role in raising agricultural labor productivity and land output rates. Experience has proven that when some farmers transfer their land, the subcontracting fee they obtain even exceeds the net income from farming it themselves. In some places, the annual transfer fee per mu is set at the market price of 1000 jin of wheat. Investing in agriculture for intensive management, eliminating field ridges can increase cultivated land area by 5%, and with unified improved seeds, deep plowing, irrigation, fertilization, and pest control, per-unit yields increase, and the rate of return can reach more than 30%. It is necessary to promptly carry out land rights confirmation and certification work to create conditions for the transfer of land contracting rights.

At present, agricultural modernization faces a rare opportunity: first, there is an outlet for the transfer of agricultural labor; second, a large amount of social capital is eager to find investment channels; third, market demand for high-quality green agricultural products is strong; fourth, the agricultural input industry can meet the demand of agricultural modernization for technical equipment. When these four conditions are combined with the policy of encouraging the transfer of land contracted management rights, the process of agricultural modernization will be greatly accelerated.

The transfer of land contracting rights enables farmers to increase income through improved efficiency. Calculated at the current subcontracting fee of 700 yuan per mu, a household with 10 mu of land can earn 7000 yuan per year. If "the couple" goes out to work, annual income is about 60,000 yuan. Adding land subcontracting fee income, the household's annual income can enter the ranks of middle-income households. Farmers who work the land can also substantially increase their income because they have expanded the scale of operations. According to practical experience, in single-cropping agricultural areas, one farmer farming 100 to 120 mu of land; in double-cropping agricultural areas, one farmer farming 50 to 60 mu of land, agricultural labor productivity can reach the average level of the secondary and tertiary industries, and farming can become a respectable occupation. Under current mechanization conditions, in plains and shallow hilly areas, one laborer can farm several thousand mu of dry land. In southern rice-producing areas, one farmer can farm several hundred mu of paddy field. Because labor productivity improves, their income will exceed the income from working away from home, which helps form a stable, high-quality farmer contingent. The scaled operation of land powerfully promotes agricultural modernization, and China's agriculture will transform from a weak industry into an industry with international competitiveness.

II

This year's government work report proposed the goal of promptly realizing the citizenization of 100 million migrant workers. Generally speaking, a basic condition for the citizenization of migrant workers is having housing in the city. If they rely solely on income from working to buy a house, that will be far off. If they sell their rural house, they can obtain a considerable sum, making it possible to buy or rent a house in the city. The "Decision" proposes: "Protect the usufructuary rights of farming households to residential land, reform and improve the rural residential land system, select a number of pilot areas, and prudently and steadily advance the mortgage, guarantee, and transfer of farmers' housing property rights, exploring channels for farmers to increase property income." This provides policy guarantees for realizing the mortgage, guarantee, and transfer of farmers' housing property rights, and is a major breakthrough in the reform of the rural housing and residential land system. Advancing reform according to these requirements is conducive to increasing farmers' income and narrowing the urban-rural income gap; it is also conducive to reducing rural housing land occupation and meeting urbanization's demand for newly added construction land; it can also promote the citizenization of migrant workers.

The experience of countries around the world proves that in the process of urbanization, construction land decreases and cultivated land increases. This is because urbanization raises the degree of intensive land use. From China's actual situation, per capita rural construction land occupation is 3.5 times that of cities. National urban and rural construction land totals 220,000 sq km, of which village construction land reaches 170,000 sq km, or 255 million mu. At present, a great potential of China's land resources lies in rural residential land. Reforming and improving the rural residential land system will not only not impact the red line of 1.8 billion mu of cultivated land, but on the contrary can increase cultivated land. Because residential land generally occupies good land, after reclamation, its per-unit yield will certainly be higher than ordinary cultivated land.

The "Decision" proposes prudently and steadily advancing the mortgage, guarantee, and transfer of farmers' housing property rights, which can effectively narrow the income gap between urban and rural residents and will become important support for rural areas to achieve moderate prosperity in all respects and for the citizenization of migrant workers. Some people also worry, what if migrant workers entering cities lose their jobs and cannot return to the countryside? Such worry is unnecessary. Because farmers who settle in cities will enjoy urban unemployment insurance. Moreover, the historical process of China's industrialization and urbanization will not reverse. The next generation of migrant workers, receiving a better education in cities, will certainly have stronger survival abilities than their parents. As they gradually integrate into cities, it is impossible for them to return to the countryside. China is at a critical stage of crossing into the ranks of high-income countries. Implementing the spirit of the "Decision" will enable farmers to share in land value-added gains and will provide a guarantee for changing the urban-rural dual structure and smoothly entering the ranks of high-income countries.

III

The "Decision" proposes: "Under the premise of complying with planning and use control, allow rural collective operational construction land to be sold, leased, or used as shares, and implement entry into the market, equal rights, and equal prices with state-owned land." For a long time, newly added urban construction land has been expropriated by the government from farmers into state-owned land, and after improving roads, water supply, power supply, and other infrastructure, it has been subject to "bid invitation, auction, and listing." According to the spirit of the "Decision," farmers will obtain relatively high compensation from the transfer of operational construction land, including employment, social security, and housing, all of which will receive better resettlement. This is an important reform of the land expropriation system proceeding from protecting farmers' interests. The "Decision" also particularly emphasizes establishing a mechanism for distributing land value-added gains that takes into account the state, the collective, and individuals, and reasonably raising individual income, fully reflecting attention to farmers' interests.

Establishing a unified urban-rural construction land market is an important measure for giving play to the decisive role of the market in allocating land resources. For a long time, production factors between urban and rural areas could not flow freely in both directions. Rural labor, capital, and land could continuously flow into cities, while urban capital, technology, and talent could not flow into rural areas. The rural market formed a "shield," and this is an important reason for the ever-widening urban-rural gap. Establishing a unified urban-rural factor market, including the land market, is an important way to accelerate rural development.

For public-interest construction land, government expropriation should still be considered. At present, China is in a stage of rapid infrastructure construction. In particular, the construction of railways, highways, pipelines, and airports will inevitably occupy part of the cultivated land. Local Party committees and governments at all levels should do mass work well, educate the masses to take the overall situation into account, so that infrastructure construction can proceed smoothly and construction costs can be effectively controlled. Good infrastructure construction is conducive to local economic development and also to increasing farmers' income.

It must be emphasized that rural land has a use control issue, that is, the transfer of cultivated land must be carried out without changing its use. If cultivated land needs to be changed into construction land, it must comply with construction planning and go through land expropriation procedures in accordance with the law. Through the "land ticket market," Chongqing has tapped scattered rural construction land resources, both meeting the demand of industrialization and urbanization for construction land and expanding cultivated land area and increasing farmers' income, achieving the effect of killing three birds with one stone.