Farming should be focus of rural land transfers

Future transfers of rural land must be used for agricultural purposes to ensure that China can keep feeding its population, an expert warned.

In a major decision made by the Third Plenary Session of the 18th Central Committee of the Communist Party of China in November, the country will allow farmers to lease their collectively owned land - there is no private land ownership in the countryside - to investors. The central government is encouraging investors to support a modern planting and breeding industry on the leased land.

Han Jun, deputy chief with the State Council's Development Research Center, a government think tank, said authorities should move forward cautiously on the decision because it could put the country's food supply at risk.

Han cited research by the Ministry of Agriculture that said less than 10 percent of private capital investments in the agriculture sector is for agricultural purposes.

"Many industrial and commercial enterprises do not want to invest in the grain sector, for example, because it is very difficult for them to profit from it," he said during the 2013 National Forum for Village Heads in Fengyang county, Anhui province, on Saturday.

More than 500 village leaders and rural reform experts from across the country attended the two-day forum.

Xiaogang, a village in the county, is the birthplace of China's first agreement in 1978 among farmers to subdivide their collectively owned farmland into family plots, a practice that later spread across the country.

The biggest fear, Han said, is that private investors will use the rural land for tourism or real estate. He said the average price for leasing 0.07 hectares of rural land for a year is only about 1,000 yuan ($164), which means investors won't have a high profit margin after calculating the costs for labor and production materials.

"Some have even used farmland to develop hotels and villas," he said.

Hou Yunxiu, head of the Nongke, a village in Sichuan province, said the village's farmland has been up for sale to urban residents to develop villas since 2009.

"At first, the price was 150,000 yuan for leasing 1 mu (0.07 hectare) of farmland for 20 years. Now we sign longer leasing contracts and the price is 600,000 yuan for 50 years," she said.

Hou said she also hoped that the land rights transferred to urban residents can be legally guaranteed. Currently, she said, ownership of farmland is certified through agreements signed between the village committee and new land owners.

In his worries about the nation's food security, Han, of the State Council's Development Research Center, said the country should ensure that rural family units will remain the dominant group in the agriculture industry. He added that there should be "fewer farmers to cultivate more land".

As part of the decision by the Third Plenum of the CPC's 18th Central Committee, farmers are allowed to become shareholders in the industrialization of farmland because of their land-leasing rights.

Han said farmers who till a large area of land should be allowed to use their land as mortgages to overcome their difficulties in obtaining bank loans.

The practice of allowing farmers to become shareholders has already been used in many villages in Shandong province, said Ma Xianfu, Party chief of Lingyangjie village.

Ma said his village will not consider leasing its land to private investors because there isn't enough land.