China will spend 20 billion yuan (US$2.6 billion) to add 1.7 million hectares of arable land by 2020, a senior official of the Ministry of Land and Resources (MLR) has said.

The land consolidation plan will ensure the country retains no less than 120 million hectares of farmland. This is important to guarantee food safety for its 1.3 billion people, Wang Shiyuan, vice-minister of the MLR said at a seminar in Chengdu.

The doubling of fees on newly added land for construction has helped increase the funds needed for land consolidation, Wang said. Last November, China doubled the land use fee for new construction projects in an effort to tighten land control and cool down the real estate sector.

Land consolidation refers to the rational use of land, especially restructuring of cropland, under which plots are consolidated to provide larger holdings. Land consolidation projects typically include infrastructure for irrigation and drainage, laying new roads, leveling land and improving soil condition.

MLR figures show China added 2.4 million hectares of arable land between 1999 and 2006. Over the past seven years, the area of newly added arable land has proved to be greater than the land made available for construction projects, benefiting more than 12 million farmers. And most importantly, grain production has increased by 10 to 20 percent in the pilot areas, and production cost has fallen by 5 to 15 percent.

About 13.3 million hectares have the potential to be converted to arable land through land consolidation, but more than half are in drought-hit northwestern regions, Wang said.

The land consolidation project, however, can help convert at least 5.5 million hectares into cultivable land. Half of that figure can be achieved by re-planning of random, scattered and small plots, and the other half by merging villages and returning land used to build houses and other structures to farming.

This is critically important for China because the fast pace of urbanization and construction is swallowing up huge areas of arable land, the deputy minister said.

But Chinese Academy of Agriculture Sciences professor Liang Shumin warned that efforts to retain 120 million hectares of farmland will encounter many difficulties because the difference in returns "between construction and farming will be more acute, given the rising rate of urbanization".