By Liu Shouying, Li Qing & Wang Ruimin

Research Report Vol.18 No.1, 2016

After China’s rural land reform, land tenure system exhibits the following three features. First, collective ownership of land remains unchanged, i.e. rural means of production are owned by people’s communes, production brigades and production teams with the last as the basic unit. Second, farmers have land rights including use rights, usufruct rights and subcontracting rights. Third, the collective ownership system of village members’ rights is practiced, namely, every member in the villagers’ groups has equal land rights. Specifically speaking, land is adjusted when there are changes in demographic composition of households; if land is expropriated by the government, the compensation is shared by all members and the rest of land is reallocated; and land rent from non-agricultural activities is shared by all.

Under this basic framework, policies and laws concerning rural land rights are gradually improved in the following aspects. First, the duration of contracting land is extended from 15 years to 30 years. Farmers can always contract land and therefore have stable expectation of land rights. Second, the contract structure has experienced three stages of development. At the beginning of reform and opening-up, farmers fulfilled the grain delivery obligation to the state, handed the required amount to the collective, and enjoyed the residual. During the second stage, contractors were responsible for their contracted land, with no change of land despite the change of demographic composition of households during the contracting period. As for the third stage, the government proposed long-term and secure land use rights in order to determine farmers’ entitlements to land gains, and realize related powers and functions. On this basis, Law of the People’s Republic of China on the Contracting of Rural Land and Property Law of the People’s Republic of China are adopted to protect land property rights.

Several prominent features and trends exhibit in the evolution of rural land tenure system in recent years. First, collective ownership of land is altered and handed to the state. Second, collective ownership system of members’ rights is enhanced constantly while many farmers still oppose the idea that no adjustment in land allocation is made even there is a change in demographic composition of the household. Third, due to the changing contract structure and relevant policies, an increasing number of farmers lose the right to contract and operate rural land. Fourth, verification of land rights helps secure farmers’ rights to contract and operate land. But there are practical problems. For example, land area is not consistent with what is written on the land certificate; land rights can hardly be verified as scheduled; it is difficult to get mortgages; and related policies do not match with the system.

I. Alteration of Holders of Collective Land Ownership and its Handover to the State

During China’s reform of rural system, land rights are handed over to farmers, but the framework for collective ownership still remains. That is, rural means of production are owned by people’s communes, production brigades and production teams with the last as the basic unit. Villages in developed areas are influenced by rapid industrialization and urbanization, and traditional rural labor force and residents constantly leave their villages, thus leading to the change in village governance structure.

First, villages merge at a faster pace. Thanks to economic and administrative factors, villages merge more quickly and so do villagers’ groups since the reform and opening-up. First of all, the number of administrative villages plummeted. According to China Statistical Yearbook, the number was 941, 000 in 1985, dropped down to 802,000 in 1994, and even further to 653, 000 in 2004, and 584, 000 in 2014[]. In less than three decades, the number of administrative villages in China has decreased by 357, 000, a drop of 35.5%. Next, the number of villagers’ groups fell sharply. Based on relevant data, the number was 5.358 million in 1997, dropped to 5.079 million in 2004, and further reduced to 4.972 million in 2013. During the 16 years, the number of villagers’ groups fell by 386, 000, a decline of 7.2%. Mergers of villages and of villagers’ groups are attributed largely to the concerns of administrative cost in rural areas where much labor force moves to big cities. But, under the current system of collective land ownership in China, such mergers change the boundary of land ownership. Since there are differences in the population, land area and quality in different villages and villagers’ groups, corresponding rights and interests vary accordingly, resulting in many disputes.

Second, collective land ownership is handed to the state. With the ambiguity of China’s collective ownership system where rural means of production are owned by people’s communes, production brigades and production teams with the last as the basic unit, changes in village governance structure accelerates the process where land ownership is handed to the state. In the early period of reform and opening-up when household responsibility system was carried out, except several areas where land was owned by administrative villages, land was owned by production teams (natural villages) in most cases. However, according to the Department of Rural Economic System and Management of Ministry of Agriculture, in 2013, the collectively-owned farmland nationwide was 1.413 billion mu (1 mu equals 0.0667 hectares), among which 581 million mu was owned by villages, accounting for more than 40%, 728 million mu owned by villagers’ groups, taking up 51.52%, and 104 million mu owned by rural collective economic organizations, around 7.36%. The recent changes in the trend indicates a rapid rise of the proportion of land owned by villages from 37.79% in 2010 to 41.12% in 2013, up by 3.33 percentage points; while that owned by rural collective economic organizations is declining, from 11.35% in 2010 to 7.36% in 2013, down by 3.99 percentage points (Table 1).

In different regions, whether collective ownership is handed to the state is positively correlated with local economic performance. The proportion of land owned by villages is the highest in east China. In 2013, nearly half of land was owned by villages, more than the proportion of land owned by villagers’ groups. However, the proportion of land owned by villages in the middle and western parts of China was below 40%, and that of villagers’ groups was over 50%. In terms of the change trend of land tenure, the east region is the fastest in handing land ownership to the state, followed by the central and the western regions. From 2011 to 2013, in the eastern region, the proportion of farmland owned by villages increased from 42.80% to 49.50%, up by 7.30 percentage points; that of land owned by villagers’ groups rose from 42.01% to 43.39%, up by 1.38 percentage points; and that of land owned by rural collective economic organizations dropped from 15.19% to 7.11%, down by 8.08 percentage points. In the central region, the proportion of land owned by villages increased from 35.80% to 38.65%, up by 3.15 percentage points; that of land owned by villagers’ groups rose from 53.54% to 54.10%, up by 0.56 percentage points; and that of land owned by rural collective economic organizations decreased from 10.66% to 7.25%, down by 3.41 percentage points. In the western region, the proportion of land owned by villages increased from 36.31% to 37.50%, up by 1.19 percentage points; that of land owned by villagers’ groups rose from 53.67% to 54.79%, up by 1.12 percentage points; and that of land owned by rural collective economic organizations decreased from 10.01% to 7.71%, down by 2.3 percentage points (Table 2). ...

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