Wu Jinglian: what is returned to the farmers is the right of land management, not the ownership.

The picture above shows Wu Jinglian, a professor of economics at Baosteel at China Europe International Business School. (photo source: photo by Liang Bin of Sina Finance)

Sina Financial News "2015 fourth China International Agricultural and Business Summit Forum" was held in Beijing on May 17th. Wu Jinglian, an economics professor at Baosteel at China Europe International Business School, said in his speech that the "separation of rights" of land can solve the problem of land transfer, and suggested that the land right should be returned to farmers, but he stressed that this right should be the right of land management rather than ownership.

With regard to the issue of land circulation, Wu Jinglian clearly suggested that a unified, open, competitive and orderly market for the transfer of land management rights should be established as soon as possible.

The following is a transcript of the speech:

Wu Jinglian: my major is far from agriculture. I just want to discuss it with so many officials, scholars, as well as friends from the business community, as well as Dutch friends who have made great achievements in agriculture in the world. I would like to ask some questions. Communicate with you and answer these questions.

Since the adoption of the "decision" at the third Plenary session of the 18th CPC Central Committee, we have been waiting for the reform and development of agriculture for a long time. Half of our citizens now live in rural areas. If you add in some people who work "like migratory birds" in cities, most of our citizens are related to rural areas. The situation of agriculture is of great importance to our country and people, and everyone has high expectations for it.

We also know that there are many different views on some major issues in China, and after the Central Office and the State Office issued documents in November last year, it seems that the reform of our rural areas and agriculture has officially begun. This document is called "opinions on guiding the orderly Circulation of Rural Land Management Rights and developing appropriate scale Management of Agriculture". From the title, we can see that there are two themes:

Theme one, the orderly transfer of management rights.

The second theme is the moderate scale operation of agriculture.

The former is the premise of the latter. Our agriculture has indeed entered a period of large-scale operation. If we want to move towards modern agriculture, it must be large-scale agriculture, rather than a very small farm as before. To achieve this, it involves the issue of property rights, the establishment of property rights system is the basis of agricultural modernization, the relationship between the two is very clear.

On these two issues, we need to conduct in-depth discussions on how to implement these two principles. The document points out the basic direction, but it should also be implemented concretely, and there are many issues that need to be studied. I would like to ask three questions:

Return the right of land management to the peasants and the ownership of the land cannot be given.

Question one, how to understand the "separation of powers". In the past, there was a great argument that the ownership of the land should be returned to the peasants. This is because before the land reform, the ownership of land belonged to the peasants, but later it became collective after joining the co-operation and commune transformation. Another opinion is that collective ownership should be maintained.

After reading some of the expositions in this document, I personally feel that the "separation of powers" is the way to resolve this dispute in order to reach a consensus. The so-called three-power system is to set up the ownership, the contract right and the management right separately, the operation right can be transferred, and the circulation is the management right. However, I have read some explanatory articles, and it seems that there is still some ambiguity in the middle. We do economic research and often use economics to understand such things. How do you define these three rights?

I think the "separation of powers" can be explained by traditional economic theory. In fact, in a considerable sense, it is suitable for China's land ownership system and can be linked up. We have probably implemented the permanent tenancy system since the Song Dynasty, which reflects its nature. One of the core contents of the permanent tenancy system is to divide the ownership of land into two independent rights:

The first right is ownership.

Right two, some people call it the permanent tenancy right, but in fact, most of them do not call it that. The majority probably call it the land right and the ownership the land right.

I am from Changzhou in the south of Jiangsu Province. It has been very common in the south of the Yangtze River to the Qing Dynasty. Land rights and land rights can exist, buy, sell or circulate independently. In the economic sense, in terms of Marxist economics, the so-called land right is the right to obtain absolute land rent, the land right is the right to obtain other land rent, and the absolute land rent is the land because of its organic composition. And can get a higher-than-average profit return. In the words of Max, the income from ownership monopoly, in the words of Marx, is the income from operating monopoly, which is composed of the excess reward of land investment.

Is it possible to understand it this way? The so-called "separation of rights", ownership is the traditional land right, and the so-called management right is the land right in the traditional land ownership system. These two rights exist independently, but the right to contract is not easy to say. In my opinion, it may be part of the right of management, but there is also an explanation that this is part of ownership. It is not clear where this is in line with the traditional structure and concept. But the land right (ownership) exists, it is collective, and its income is used for the collective owner (that is, the village committee) to deal with public expenditure for the whole village. The right to land is an independent right, a right that can be mortgaged, leased, bought and sold. In this way, history can be linked up, and it can also link up with the previous view that land ownership should be returned to the peasants.

For example, when the last leader was about to hand over his shift (2002), General Secretary Jiang Zemin organized some symposiums, including agriculture. I raised this opinion at that meeting. I advocated returning land rights to farmers. However, I made it clear that the so-called return of land rights to farmers is land rights, not land rights. I can accept the documents of the Mid-year Office and the State Office. I think this opinion can solve my problem, because the so-called need to make it clear that the fundamental problem of land ownership is not absolute land rent, but other land rent, because as long as you do not implement this right and benefit to the person, the operator is unwilling to invest. Some people say that if the contract right is extended to 30 years, he can invest, but I say no. First of all, at the end of your 30 years, there will always be a time when it will expire, and then he will not be willing to invest.

On the other hand, the term of investment income on land is more than 30 years, which is a large land investment, and it is not willing to invest because the income cannot be obtained. Some economists, such as Chi Fulin, their opinion is to return the permanent management right to the peasants, and the same is true of their suggestions, which do not include land rights, whose income is relatively fixed. It is OK that it can be used as financial support for some public expenditure in the village. Moreover, it is not only necessary to give him the right of management of Yongyuan, but also can be transferred, so that it can be operated on a large scale. Another problem is the transfer of use. In the process of industrialization and urbanization, how to let some capital that is not engaged in agriculture enter.

This is the first question. It is necessary to find out exactly how to understand these three rights and what is the nature of their operation. Otherwise, because everyone uses the same word, such problems often occur, and its meaning has changed. So there should be a clear definition of economics.

There is an urgent need to establish a unified, open, competitive and orderly land management right transfer market.

Question two, orderly circulation.

Recently, some documents have talked about subcontracting, leasing, swap, transfer, other forms and so on. I think as long as it is an independent form of property rights, all property rights functions should have, here is a question, how to achieve order? There is a lot of practical experience here that can be exchanged. The first step we are doing now is to confirm the power. After confirming the power, he will enter the process of circulation. Recently, capital entered and withdrew two days after entering. As a result, the land was abandoned. This is because we did not establish an orderly circulation market.

The third Plenary session of the 18th CPC Central Committee requires us to establish a unified, open, competitive and orderly market system, which of course includes the land market. in particular, what needs to be solved is how to establish a unified, open, competitive and orderly market for the transfer of management rights, which is a problem we are facing.

The mode of agricultural household management is still suitable for China.

Question three, the mode of operation.

The documents of the Central Committee of the Communist Party of China and the State Council Office say that it is a goal of our farmland reform to develop appropriate scale operation of agriculture. Scale operation is related to the theme of today's meeting, how does cross-border industrial and commercial capital enter agriculture, but there is a more basic question: what is the modern agricultural organization form of scale operation? What is the mode of operation? It seems that the guidance document issued by our meeting is mainly for industrial and commercial capital to enter, so that it can develop into large-scale modern agriculture, but this is a little different from our understanding, and we don't know if you remember it.

At the third Plenary session of the 15th CPC Central Committee in 1998, there was a decision on agriculture and rural work. There was a very prominent thing in this decision for those of us who studied economics. It said that the family management style is the most suitable mode of operation for agriculture. The family management mode is not only suitable for traditional agriculture based on manual labor, but also for modern agriculture using advanced science and technology and means of production. That is, family agriculture is run in the same way as capitalist farms, and farms that employ labor are run the same way. Traditional Marxism believes that modern agriculture is another, not a family mode of operation.

We know that this judgment was first put forward by du Lao and they, and later Comrade Chen Xiwen explained in detail why this was the case in a book written in the 1980s. Now let's see, is this judgment right or wrong? Now that we are talking about scale operation, do we still agree with the judgment of the past 1998? I personally think that in terms of production, I am afraid this is still the case. I will not repeat it. We can take a look at Chen Xiwen's works in the 1980s. This does not seem to have changed, because his basic nature has not changed, that is to say, agriculture, both farming and agriculture in a broad sense (trees, fisheries) are all associated with animals and plants, and it must be very sensitive to the continuous changes of nature. And its result is at the end of the life process.

The basic argument does not seem to have changed, so there is a question, as also mentioned in the scale document, the focus is on how to cultivate family farms on a large scale, whether it is a large farm in a broad sense like the United States. or a family farm like Japan, where there is less land.

Under such circumstances, what should we industrial and commercial capital do? Financial capital can enter agriculture, what can industrial and commercial capital do? I think there are still a lot of things that can be done, and I am afraid it is quite difficult to engage in production directly. The two comrades who brought me today are a creative park company under our Leping Foundation, which is a public welfare organization. It wants to intervene because it wants to send pollution-free vegetables to every household. There are many rings in the middle. How should these links be organized? How to formulate rules, how to organize the market, we want to use the public welfare method to make some investment, this public goods to participate in the public welfare organizations to do.

I often communicate with my colleagues, and I find that there are many problems in this. In countries like Europe and the United States, its cooperation is very common, not in production, but in circulation, commerce and finance. We are now called specialized co-operatives, which are run by farmers themselves. when this professional writing society discussed this issue at that time, the first one was actually Xinqi Orange in the 19th century. This is run by farmers themselves by the Orange sales Cooperative in California. In addition to the farmers themselves, in fact, our social capital can also be vigorously involved, because it has many links, from the beginning of agricultural production to everyone's mouth, there are many links in the middle.

In the Soviet-style socialist system in the past, its method was to integrate it into a large enterprise in the whole country and turn it into an enterprise, and every link was controlled by plan. It seems that this method will not work. How can the various links be connected? Farmers can set up professional co-operatives on their own, because from the very beginning, we had a big debate about whether we should follow the example of Japan and Taiwan to run by the peasant associations themselves, and the peasant associations also had their own financial and sales departments, which did not get the consent of the leaders at that time, so later this was very weak. Now there seems to be some possibility as to whether this method (run by the rural areas themselves) can be restored in a more comprehensive way, and why there is a law on professional co-operatives? it is precisely because it is necessary to develop this kind of cooperation in the field of circulation, finance, supply and marketing, and so on.

Can our social capital intervene? How to intervene? All these are worthy of our in-depth discussion.

Three questions:

The first problem is an accurate understanding of the three-power system.

The second question is what the organization, rules and supervision of the market for the transfer of economic power should do.

The third question is what should be the main mode of operation of large-scale modern agriculture, and how our industrial and commercial capital and financial capital can promote the transformation to modern agriculture.

I hope our meeting will be successful and will provide us with some good ideas in these areas.

Thank you.