The Inadequacy of Property Rights in Our Country’s Current Land System & A New Concept of Agricultural Land System - 中欧社会论坛 - China Europa Forum

The Inadequacy of Property Rights in Our Country’s Current Land System & A New Concept of Agricultural Land System

Authors: Zheng Fengtian

China’s current land system has a deficit of property rights. First,the boundaries of the current land ownership is not clearly defined. Next, ownership rights of the country, organisations and farmers are not clear. Third, because the laws governing the land system reform are not adequate, government policies substituting laws occurs, not giving farmers any steady anticipation.

China’s current land system is one that maintains that collectivisation of land does not change. On some levels this could be embodied in its political and ideological viewpoints. However to the farmers, this appears not to be just an empty shell on ownership, but it encompasses practicality.

The impact of defects of the land system on farmers’ economic behaviour can be seen in these areas: « superiors » of land ownership rights violate land use rights and income rights of rural residents under the name of the proprietor; collective land ownership leads to a « division of land » system; rural residents face the four main instabilities: the instability of land surface area, uncertainty of compensation, uncertainty of operation model and uncertainty of boundaries; rural residents lack long-term expectations of their land and have short-term land management actions; rural residents do not economise the scale of agricultural land investment; equal distribution of agricultural land covers the difference in human capital between households; agricultural land is evenly distributed and frequently adjusted, and implementation costs are high; agricultural land under the benefits insurance mechanism are managed extensively; land and resources are wasted; and the short-term integrated use of land has seriously affected the process of change in agricultural technology.

The distortion of farmers’ economic behaviour caused by the defects of the current land system causes discussions about the model of land system in the long-term development of China’s agriculture. The main ideas are as follows: the nationalisation of land states that land ownership belongs to the state. The franchise contract system will be changed to a rental system. Land used for purposes other than growing food grain are to be matched with producers through public tender, the state will obtain a stable rent income, and the lessee (or the user of the lease) will gain the right to use the land within a time frame specified in the lease contract; and disputes over the merits of land privatisation are heated. Private ownership of land by rural residents in China has been proposed as early as 1985. Between 1987 and 1988, privatisation of land was increasingly being advocated. However after 1989, due to political reasons, people were evasive to the issue. After 1990, there were plans to turn the situation around, to work around the issue of land privatisation. Property rights and land privatisation are two different issues. Neither the privatisation of property nor public ownership of property has much advantage over the other. The key lies in how the issue is addressed.

When designing China’s agricultural land system to address the effective operation of agricultural land rights, it is imperative to consider China’s current stage of social economic and political background. China’s new model of agricultural land system and security measures are as follows: a) The overall objective is to weaken the principle of collective ownership, to reinstate rural residents’ right to permanent use, as well as to strengthen the state’s macro-controlling power;

b) the new land system is the household contract system; c) the implementation of the new land system has the following policy insurance: it gradually reinstates the rural land rights transfer market; it develops the urban-rural market, improving rural comparative advantage; it highly developed non-agricultural industries, causing a large transfer of agricultural labour surplus; it adjusts the land tax system, replacing the non-standard collectivised retention system with a standard land rental system, rationalising the state tax revenue, uncovering all hidden taxes, but the overall tax burden level should not be overly high.

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