This is a news article which is translated from chinese to English. You can read the original chinese version here.

Rural Land Management Contradiction

2006-08-04, 06:02 PM
From Zhinong Net

The average cultivated land in China is way below the world's average level. A series of laws and regulations have been put in place to protect the farm land, arguably "the most strict" arable land protection system. But years of economic development and urbanization and consequential land-related problems have served a "contradiction" to the "legal strictness." The interests of farmers have been more than seriously violated.

Urbanization, says the law, should not occupy or try to occupy the least amount of farm land. And for how much land that is seized, the same amount should be cultivated to make it up for equilibrium's sake. But solid figures have proved otherwise:

From 1979 to 1997, the state seized altogether 270 million mu of farm land from the rural areas for urbanization, roads, factories or economic zones. Net reduction of cultivated land in 1999 was 6.5 million mu, 19 million mu for 2000, 25 million mu for 2002 and 38 million mu for 2003. A nation wide tally at year end of 2003 showed China lost 100 million mu of farm land over year end of 1996. For 2004 and 2005, there were 14 million and 5.4 million mu net losses respectively. Now China has only 1.83 billion mu of cultivated land, less than 1.5 mu per capita. The Eleventh "Five Year Plan" wants to maintain 1.8 billion mu farm land, meaning the country has 31 million mu to lose.
Land seizure, compensation and renting practices, designed by the laws, apparently put the farmers and their rights to their land at a lower hand, and they have an absolutely incomplete ownership to their land. It not only cannot effectively protect farmers' interests, but also creates windows of opportunity for governments to encroach upon their interests, by the book of law but abusing "public interests."

Although the Constitution and laws say collective land is owned by the collective, but collective land ownership is even smaller than the users rights of state-owned land. Those who have the rights to use state-owned land can collateralize, rent or transfer the titles; while owners of collective land don't have these rights. Owners of collective land, while being targeted for commercial development, cannot even negotiate on the price of their land. The government is the agent of these negotiations.

Based on the needs of public interests the state, says the law, can seize the land or seize with compensations, by legal means. But there is no clear definition of public interests. Can developers or local government represent the "state" or "public interests?" Moreover, the collective of farmers can neither negotiate on the compensations. The law says the total compensation for the land taken cannot exceed 30 times of the average yearly output of the last three years before seizure. But, can the collective of farmers refuse giving their land if they are not happy about compensation? Sorry. The regulations say, compensation of land seizure or relocation disputes do not affect the implementation of projects on the seized land.

With the increasing financial burden on local governments, farmers have taken the brunt as various fees were levied by local governments to make ends meet. And pressure to seek investment for tax revenues only make the land situation even worse.

In 2004, fiscal revenue of China's central government accounted for 55% of national total. But Beijing only shelled out 21.96 billion yuan for education, less than 1/14 of local expenditures of 314.6 billion on education. Local spending on social security was seven times of that from Beijing, 10 times of Beijing on agricultural projects.

Situation is even worse for the township level. According to survey by the State Council Development Research Center, Beijing only accounts for 2% of the country's spending on compulsory education, provinces and cities pay for 11%, counties for 9% and 78% has to be paid up by township levels.

In 2004, local governments in China had debts worth at least 1 trillion yuan in total, 220 billion yuan for township levels, which was about 4 million yuan for each local township. These local debts are snowballing at a rate of about 20 billion yuan a year. Many township governments are having difficulty in even paying salaries for civil servants and teachers in time, triggering endless fees and extra burdens on farmers.

Two ways for local governments to earn more are more aggressively seeking investment for the sake of GDP and making money out of the land trough real estate development or industrialization. Land dollars account for as much as 70% of government revenues in some localities.

A project called "Oriental College Town" got more than 5,000 mu land on paper, but it actually has seized 11,000 mu, 6,640 mu was taken by a golf course. And the project enjoyed a super discount at 55,000 yuan/mu, 1/6 of market rate of 300,000 yuan/mu.

Although China has the "most strict" land protection system, the reality is not as good as the theory. Shall we reconsider the whole regime? Shall we overhaul the land ownership system?

[1,000 mu = 165 acres, $1 = 8 yuan]