E-commerce firms set foot on land circulation

The integration between land transfer and e-commerce can help protect farmers' rights and improve the development of modern agriculture. Urban land is owned by the state and rural land is under collective ownership. The use rights of the majority of the collectively-owned farmland were split and allocated to farmers under the household contract responsibility system introduced in 1978, when sweeping rural reform ended communal farming.

To boost economies of scale and give more property rights to farmers, China's central authorities have vowed to support the transfer and mortgage of land-use rights.

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The use rights of 340 million mu of farmland had been transferred to larger farming entities as of the end of 2013, according to the Ministry of Agriculture. Many large growers and agriculture production companies have been confounded by problems such as distribution channels, logistics and sources of capital to support the enlarged production scale.

An Yufa, professor at China Agricultural University in Beijing, said, the mechanism of the online farming project would not only raise funds efficiently, but lower investment risk since the crops grown are already ordered by the customers.

The project can also ensure high quality management of farming which can improve the added value of the agricultural products, he added.

China's leading online retailer JD.com also announced last month that it will join with 18 vegetable and fruit production bases in Beijing to provide personal customized farm services.

Yu Ying, agricultural expert with JD.com said, the e-commerce companies have cooperative relationships with the logistic companies, and they can also gather customers' transaction information which can help guide the agricultural production after being analyzed.

Xinghe company is planning to extend the online personal customized project to other places including Huangshan city in Anhui and Quzhou city in Zhejiang province.

Xu Congxiang, a deputy to the National People's Congress (NPC), said, there is still a lack of laws and regulations to protect the parties involved and the healthy development of the project must be supported by legislation.