Country strife

PUBLISHED : Thursday, 24 March, 2011, 12:00am
UPDATED : Thursday, 24 March, 2011, 12:00am

Between 1981 and 2005, the mainland experienced the biggest reduction in poverty seen anywhere on the planet in the past 100 years, as the proportion of those living on under US$1.25 a day plummeted from 84 per cent to 16 per cent. The great bulk of this occurred in the countryside, where 52 per cent of China's population live even today.

Most of this massive decline in poverty was traceable to farmers' transformed relationship to the land, as collective farming was replaced in the early 1980s by individual family farms.

In our fieldwork starting in 1987, we found that the huge poverty-fighting boost to productivity that came from farming individually was largely the result of improved farming practices - seed selection, fertilisation, weeding and the like - by highly motivated family farmers, replacing the slipshod practices of the collective farms. But, increasingly, we found the potential gains from such improvements were being exhausted, and that a new generation of long-term investments by farmers would be needed for further large gains in production.

China's farmers had lacked the motivation to make such investments, largely due to a process called 'readjustment', which permitted local cadres to take back farmers' land parcels, reconfiguring and reallocating them as the village and household population changed. Not knowing how long they could keep a particular land parcel, farmers were reluctant to make any serious investment in it.

As readjustments put the brake on further advances in agricultural productivity, China's urban-rural 'gap' steadily widened, with large rural disadvantages in life expectancy, education and consumption.

It was thus of paramount importance that Beijing enacted, between 1998 and 2007, a trio of laws intended to give China's millions of rural households long-term security on the land: the 1998 Land Management Law, the 2002 Rural Land Contracting Law and the 2007 Property Law. Now, all rural households were to have 30-year use rights to the same parcels of land; almost never 'readjustable'; confirmed in written contract and certificate; transferable and inheritable within the 30 years; and extendable after 30 years. Safeguards such as women's equal land rights and land-rights protection for urban job seekers further bolstered tenure security.

Given the centrality of these new laws to the whole process of rural development, and beginning in 1999, Landesa joined Renmin University and Michigan State University in five large sample surveys, covering 17 provinces. The purpose was to provide ongoing, independent assessment of the implementation of farmers' 30-year land rights.

The preliminary results of the 2010 survey have just been published as a chapter in the 2011 Rule of Law Blue Book of the Chinese Academy of Social Sciences, and reflect both notable emerging accomplishments and serious challenges:

There is much room for improvement in land-rights documentation: 71 per cent of farming families have been issued at least one land-rights document. But only 44 per cent have been issued both documents, as required, and 29 per cent have been issued neither. A large majority of documents lack wives' names while a recent campaign to issue remaining documents had minimal success.

Farmers' long-term land investments have begun to have a measurable impact. Investments appear closely linked to the issuance of documentation. Even with the shortcomings in issuance, the survey results extrapolate to indicate 22 million incremental capital investments made for agricultural diversification alone. In 2009, these yielded an average gross income for the investing farmer of 20,650 yuan (HK$24,000), representing a total of 454 billion yuan for all investing farmers - over 12 per cent of total rural income that year.

A market for agricultural land is gradually emerging. One out of eight farmers has engaged in a voluntary market renting-out of land rights in the past three years. Rent levels are up and, when capitalised, suggest an emerging value of around 87,000 yuan per hectare of arable land. For all arable land, this equates to potential land wealth of 10.44 trillion yuan in the farmers' hands (an increase from 8 trillion yuan in 2008).

There are new threats to farmers' tenure security. Although the original threat of readjustment appears to have largely ended, two new dangers have gathered momentum: poorly compensated takings of land for non-agricultural purposes; and often coercive land leases, supposedly for agricultural purposes, to outside developers or companies.

More than one out of 10 villages experienced land being taken away last year (cumulatively, 37 per cent of villages have had their land taken away). In three cases out of five, farmers were not satisfied with the compensation. Moreover, the process had severe shortcomings: in 29 per cent of cases, farmers were not even notified in advance, and in 58 per cent of cases they were not consulted on compensation.

Nearly a quarter of villages have seen large-scale leasing to outsiders, with the average resulting holding equal to those of nearly 100 average farmers. Forty-five per cent of these big holdings were accumulated using illegal pressure from local officials, and one-third illegally divert at least some of the land away from agriculture.

Overall, several key needs emerge, to protect and realise the enormous potential of China's rural land tenure reforms.

First, a strongly led campaign by Beijing is needed to issue remaining documents, and ensure that women are named as right-holders. Second, the Land Management Law should be revised to improve both compensation and procedures for takings. Third, rampant land leasing by outside developers and corporate farmers needs to be restricted.

Fourth, clarify that farmers' land rights renew automatically for successive 30-year periods. And, finally, on all the land-rights rules: publicise, publicise, publicise.

Roy Prosterman is founder and chairman emeritus of Seattle-based Landesa (formerly the Rural Development Institute) and emeritus professor of law at the University of Washington. Gao Yu is China country director for Landesa