Compensation for Exiting Land Contract Rights vs. Rent from Transferring Land vs. Profit from Farming It Yourself: Let's Do the Math

When it comes to land, it has always been the lifeblood of farmers, and farmers know in their hearts that farming their own land simply does not make money, while the younger generation is unwilling to farm. Farmers who go out to work choose to rent out their land, collecting a few hundred yuan in rent each year, or even letting it go for free. So the options are either to farm it yourself, rent it out, or leave it abandoned and unattended. To encourage farmers to move to the cities while also improving the utilization rate of rural land, the state has launched pilot programs for compensated exit from rural land contractual management rights, giving farmers one more option for how to handle their land. Let's first look at the policy.

There are two ways for farmers to voluntarily exit their contracted land. One is permanent exit from the contracted land, meaning the farmer gives up the contract rights, and from then on the farmer has no connection to this land, which is then disposed of by the village collective; the other is to transfer the rural land contract rights within the current contract period, with the land reallocated in the next contract round. As for compensation standards, pilot programs vary by location, for example: "permanent exit at 1000 yuan per mu per year, calculated over 30 years of compensation; long-term exit at 850 yuan per mu per year, calculated over 14 years of compensation, paid in a lump sum." Of course, both methods are based on the farmer's voluntary choice, and the state does not compel it. So how should one choose? Compensation for exiting land contract rights? Rent from transferring land? Or profit from farming it yourself? Let's do the math.

1. Profit from farming it yourself.Everyone knows that farming your own land does not make money, otherwise who would go out to work? Let's say the profit is just three hundred yuan or so (high value-added agricultural planting is not discussed here).

2. Rent from transferring it out.If transferred long-term, the rent tends to be lower; where agriculture is more developed, it is higher, such as 500 jin of dried grain, plus agricultural subsidies, which works out to 0 to 800.

3. Compensation for exiting land contract rights. If calculated according to the example above, 850 to 1000 per mu, paid in a lump sum.

From this it seems that compensation for exiting land contract rights is more tempting, and about the same as directly transferring the land out. But what farmers worry about more is: does compensation for exiting land contract rights mean permanent exit? What if they cannot get land when the next round of allocation comes? If the land that was exited has its use changed, what happens if the collective's land becomes less? How would you choose? Discussion welcome.