Farmers carrying rice straw on a pole at the end of September in Chengkan, Huangshan. This photo was taken just before the sale that took place by the rice paddies. Once the sacred grain has been taken away, the straw can be used for thatching, packing, or weaving. Shoulder poles are usually made of bamboo and can bear loads of more than 50 kilos, something that is not uncommon here.
Rice, along with tea, continues to be the main agricultural crop in the Huangshan region. An area of about 40 thousand hectares is used for growing rice (more than 30 per cent of the region’s total area devoted to crops).
Urbanization poses a threat to the land that is devoted to agriculture. On the one hand, using arable land for land development has been a common feature of the Chinese countryside over the last decades; in Huangshan district alone, the urbanised area has expanded by 60 per cent during the last five years. On the other hand, migration to cities, leaving the land idle, often results in land impoverishment or loss. To counter this trend, incentives are often proposed to foster intensive farming.
Sufficient food supplies have been an ongoing preoccupation for Beijing. We are often reminded that China counts 22 per cent of the world’s population with only 7 per cent of the arable land, making land all the more precious. This issue played a pivotal role in the creation of the double property system at the outset of the economic reform. However, according to official statistics, in the short period from 1996 to 2004, 6.6 per cent of the total arable was lost. Even though the Land Management Law was revised in 1998 to restrict the use of arable land for commercial, residential, or industrial purposes (prohibiting the use of collective land for developments, and establishing land appropriations as the standard procedure for this purpose thereafter), official statistics from 2005 show that this law was violated more than a million times. A satellite surveillance system is now in place to control land misuse.
This clearly reflects the ongoing conflict of interest between central and local governments, the chief concern of the former being to ensure sufficient food supplies and social harmony, while the ultimate goal of the latter is to manage their finances. This conflict of interests, or game as it has been called (boyi) , became more apparent after the important fiscal reform of 1994, since local coffers became much more dependent on land development than before. The new tax system left little room for local governments to legitimately increase income and land finance became a secondary source of revenue.
Using cheap land expropriated from local farmers to finance local development has been common in China for more than two decades and is a topic that causes a great deal of public concern (and social unrest). Land is the key to understanding local finance and may be regarded as the main contributor to development during the reform era.
The losers of this so-called game are the farmers. Even though the Constitution attributes ownership of rural land to them, or more precisely to the sui generis collective, which in theory represents their interests, the collective is not allowed to transfer “its land”, to modify its use, or to benefit from an eventual modification carried out by the local government, usually by means of the urban plan. Should this plan include a conversion of agricultural land into urban land, this is done through expropriation, and ownership of the land that has been reclaimed passes from the collective to the State (local government). Inclusion in the urban plan alone is regarded as a declaration of public interest, justifying the appropriation of the land (something that is not uncommon in Western countries either). The land’s inherent value is ready then to be exploited by its new owner. As a result, farmers not only lose their land, but also their “safety net”, becoming what is known as the “three withouts”, namely those without land, without social security and without education. According to official sources, it is estimated that between 1990 and 2002, 66 million farmers lost their land.
In order to rectify this imbalance and reduce the income gap that the double system of property rights has produced, the legal circulation of land-use rights allocated to farmers by the collective have finally received the green light from the central government. Old phantoms have been surmounted, and the flow of surplus rural labourers towards the cities is no longer an impediment to providing sufficient food supplies and, as was feared for a long time during the 20th century, will not necessarily lead to the concentration of land in the hands of a few. At least it will not present a problem since the collective retains ownership. Moving to small and medium cities is now desirable, specially to those urbanised to finance local development and not to respond to population needs, and farmers are given incentives to become citizens and give up their rural hukou.
However, for this to be fully implemented, the market for land-use rights may need to have more appeal for its participants. The circulation of land-use rights is not new in the Chinese countryside, although before 2008 it was illegal. Most farmers are still reluctant to transfer their land-use rights because they still encounter obstacles that prevent them from becoming first class citizens. Until a proper social protection system is created for them, their roots will be in the countryside. In addition, since land use cannot be modified, there is little margin for increasing its value. Land use restrictions are necessary to avoid the loss of arable land, but what is perhaps needed is for farmers to become the ultimate beneficiaries when their rural land is transformed into urban land. This would not only put an end to the expropriation game, but would also allow farmers to become citizens automatically, entitled to make a fair enough profit to motivate them to break their attachment to the land.