The institutional dilemma of the separation of rights of rural land

The "separation of rights" of agricultural land can not solve the problems of incomplete land rights and lack of institutional guarantee, nor does it involve the reform of collective land ownership.

Since May, discussions on China's rural issues have become lively again. Among them, the most eye-catching is the position of China's supreme leader Xi Jinping on the "separation of powers" of rural land. Although this statement is not put forward for the first time, the Anhui speech with it at its core is clearly seen as the direction of China's rural policy adjustment.

At the end of April, Xi Jinping held a forum in Xiaogang Village, Fengyang County, Anhui Province, the birthplace of China's rural reform, demanding that we should adhere to collective ownership of rural land, adhere to household management as the basis, and maintain a stable land contract relationship. At the same time, the right of contracted management of agricultural land is divided into the right of contract and the right of management, so as to realize the separation of the right of contract and the right of management.

Xi Jinping pointed out that this is "in line with farmers' desire to retain land contract rights and transfer land management rights" and is "another major institutional innovation in rural reform." Since then, around the connotation and implementation of the "separation of powers" of agricultural land, the academic discussion and the propaganda and interpretation of the official media are different.

At present, China's agricultural output value accounts for about 9% of GDP, but the agricultural labor force accounts for more than 20% of China's labor force. China also has 270 million migrant workers engaged in manufacturing and service industries, mainly living in cities, but most of them find it difficult to settle in cities and enjoy urban education, health care and social security.

This shows that China's agricultural sector does not need that much labor. With the gradual popularization of large agricultural machinery in rural areas, the demand for agricultural labor tends to be reduced. In this case, many farmers hope to lease or sublet the land so that they can enjoy the control and benefits of cultivated land while going to work in the city.

According to the statistics of China's Ministry of Agriculture, by the end of 2015, the area of cultivated land transferred in China was as high as 447 million mu, accounting for 33.3% of the total cultivated land contracted by households. Among them, nearly 80% of the agricultural land transfer is through leasing and subcontracting. At present, China has added more than 40 million mu of circulation area every year, involving millions of rural families.

In this case, it is very important for farmers to have long-term and stable land rights to speed up the process of urbanization, promote appropriate scale operation of agriculture and improve the efficiency of agricultural production. From the official interpretation, the main purpose of the "separation of rights" of agricultural land is to solve the problems of moderate scale operation of agricultural land and agricultural socialized service.

As a solution provided by the government, the "separation of rights" of agricultural land has three main points: first, rural land is still owned by the collective; second, farmers' families enjoy the right to contract agricultural land, which is actually the right to use it; thirdly, farmers can transfer the right of farming or management to cooperatives, professional large households and companies, so as to obtain property benefits.

Obviously, the authorities hope that under the adherence to collective ownership, farmers can have more land control rights, make them feel more at ease about the transfer of land, and improve the scope and depth of scale operation. This is a scheme that does not hurt the ideology of public ownership. The question is to what extent this plan can change the inefficiency of agricultural production in China.

The answer is uncertain. This formulation can not solve the deep contradiction of rural land. As a solution, it is not thorough enough. Some experts even believe that the reform of the "separation of powers" of agricultural land may bring more problems than problems solved. This is because the arrangement of the farmland system, which originally needed to be simplified, is now more complicated.

China's collective land ownership took shape in the early 1960s. At that time, the private property rights of land acquired by hundreds of millions of farmers through land reform in the early 1950s were "cooperatively" managed and managed by the collective. Since then, due to the inefficiency of collective management and the long-term shortage of food, farmers in Xiaogang Village in Anhui took the risk of allocating land to their families for farming, which solved the food problem in one fell swoop. Since then, this kind of "collective ownership and household contracting" has been officially recognized by the Communist Party of China and widely implemented throughout the country.

Thus it can be seen that the collective ownership of agricultural land was originally the result of the incomplete rural reform in the 1980s. For the farmers in Xiaogang village, what they expect is the ownership of the land, not just the right of contractual management. However, due to many historical and realistic constraints, it is impossible to return, we can only retain collective ownership and focus on the contractual management rights of farmers.

Since then, the Agricultural Land contract Law, implemented in March 2003, legalized the above-mentioned institutional arrangements. In the process of legislation, some people have suggested that the right to contracted management of rural land should be changed to "the right to the use of agricultural land", which is more concise and accurate. But this suggestion was not adopted. The property Law promulgated in March 2007 follows this expression.

In other words, for more than 20 years, the core of China's rural land legislation is "false ownership and real right of use". Just like the urban state-owned land, the city government represents the country and has nominal land ownership, while companies, enterprises and individuals obtain "urban land use rights" through public transactions and can be bought, sold and transferred freely.

Especially in recent years, the Chinese government has been promoting a new round of pilot land system reform. For example, authorized by the standing Committee of the Chinese National people's Congress, 232 counties (cities and districts) are currently carrying out pilot projects of mortgage loans for the right to operate agricultural land. the core of these pilot projects is to allow farmers to have the right to dispose of contracted land. And the right of disposition is also the core of land property rights.

At present, the "separation of rights" of agricultural land can not solve the current problems of incomplete land rights and lack of institutional guarantee, nor does it involve the reform of collective land ownership, but more focus on improving the depth and flexibility of large-scale operation. What is the nature of agricultural land management rights, whether the need to issue certificates to confirm, is not sure, in the implementation will also encounter new problems.

In May this year, Sun Zhonghua, a senior policy official of the Ministry of Agriculture, published an article saying that cultivated land contracted by households can be divided into ownership, contracting rights and management rights. As a real right, the contract right of agricultural land can be mortgaged; however, the management right of agricultural land is a kind of creditor's right, so it is not suitable to set up the mortgage, otherwise it will bring serious risk to the property owner.

The article pointed out that after the "No. 1 document" of the Communist Party of China proposed in 2014 to "allow the management right of contracted land to be mortgaged to financial institutions", it was generally regarded as allowing the mortgage of "agricultural land management right". Some local governments have issued documents stipulating that in the registration of confirming the rights of agricultural land, land contract certificates should be issued to contracted farmers and land management rights certificates should be issued to operators, allowing operators to use land management rights as collateral to apply for loans from banks.

As the owner of the right to use the contracted cultivated land, there is no problem with the mortgage loan; however, the operator uses the leased land to the bank to mortgage, which is equivalent to using the rented house as mortgage, which is completely wrong. At present, the scale of agricultural land mortgage loans in China is getting larger and larger, and most of the operators use the leased land to mortgage to the banks. Among them, the risk is very great, which is worthy of great attention.

This in turn shows that the right of management of agricultural land is not an independent right, it is derived from the contract right of farmers based on the land transfer contract. In other words, the collective has the ownership of cultivated land in name, but farmers actually have the right to use the land. Farmers will have the right to operate the land to whom they are willing to rent their land. However, this right of management is only used for production and operation, not property rights, let alone mortgage.

The above biased practices of local governments pose new challenges to the design of the system of "separation of powers" of agricultural land. This also makes people think about whether it is necessary to separate the right of management of agricultural land from the right of contract. Whether from the perspective of history or practice, whether this design can become China's "another major institutional innovation in rural reform" remains to be observed in practice.

If China wants to build modern agriculture, it must improve the efficiency of agricultural production and appropriately increase the scale of land management. The premise to achieve this goal is to properly handle the relationship between the state and farmers, implement the right of agricultural land contract, speed up the confirmation of rights and certificates to farmers, and give farmers complete land and property rights. As for the right of management of agricultural land, it is actually a matter of negotiation between farmers and operators. Whether to set up the right of management and how to sign the transfer contract is not the most important thing.