China’s 210 million agricultural households represent one out of every three farm families on the planet, and still comprise two-thirds of that vast country’s population. While farmers are now better off than in the days of collective farming, many problems of rural poverty and a large gap between urban and rural incomes have persisted, and the issue of secure land tenure has remained central. RDI has worked with China's central policy-makers on rural land tenure issues since 1987, and is the principal foreign advisor in a current reform under which 85 million familes have received secure, 30-year land-use rights.

Background
Grievances over land tenure played a crucial role in China’s 1949 revolution, and shortly after the communists came to power, they carried out a land reform that gave land ownership to the erstwhile tenant farmers—resulting in striking increases in productivity. Beginning in the mid-1950s, however, Mao introduced collective farming, moving ultimately to compulsory and very large collective farming units—the giant communes of the Great Leap Forward. The results were disastrous, leading to a famine in 1958-61 in which an estimated 30 million people died. Much smaller collective units, based on the residential hamlet or “production team” were then introduced, and remained the norm until the late 1970s, with production stabilizing and then slowly increasing. In a process that began in 1978 and was completed by 1984, China then became the first collectivized agriculture to break up its collectives and return to individual farming, under the “Household Responsibility System” (HRS).

With decollectivization, production rapidly increased at first, but then largely plateaued, with much smaller increases in the late 1980s and the 1990s.

The Problem
RDI began its rural fieldwork and advisory work in China in 1987, first through fieldwork that confirmed the positive results of the HRS, and then to examine ways in which the HRS still failed to give China’s farmers full security and incentives, and might therefore be further improved. After extensive additional fieldwork in 1988, it became clear to the RDI China team that farmers—although each household farmed on individual parcels of land—still remained highly insecure on that land. This was because local cadres in most villages carried out periodic “readjustments” under which farm households could be shifted from the parcels they presently farmed to entirely new parcels, or could lose some of the parcels they farmed. Such readjustments were made in the name of maintaining an absolute per capita equality of landholding for every person in the village. Thus, for example, if an elderly grandparent died or a daughter married into another village, their land “share” could be taken away. On the other hand, a household that gained a daughter-in-law or a newborn child could gain an extra land “share.” Moreover, as the total population of the village increased, the standard size of one land share was commonly reduced, leading to a reconfiguration and reallocation of all parcels in the village.

The “readjustment” process, however, had two very negative results for China’s farmers and for rural economic development, which had not been clearly foreseen when the process was introduced.

• Farmers were largely prevented from making long-term investments to further improve and diversify production, since they didn’t know whether they would be on the same land long enough to recover such investments and make a profit.
  
  
• Few if any transfers of land rights could take place for more than one season or one year at a time (even though these were permitted in theory), since potential transferees feared that the land could be readjusted away the following season or the following year.

The Recommendations
RDI’s central recommendation to Chinese policymakers, beginning in 1988, was that legal changes be made, and then implemented, that would give farmers long-term security on the same parcels of land. This was supplemented, as additional fieldwork was done (often at the request of Chinese counterparts), with recommendations to curb various new land-related practices of local cadres, which RDI’s field research found to have adverse consequences for farmers’ tenure security.

There is also the important question of whether the same tenure arrangements that have been successfully applied to China's arable land are also the most appropriate for its forestland and grassland resources. Although individualized household tenure for grassland and forestland, paralleling the tenure arrangements on arable land, has been successfully implemented in some areas of China, in other areas severe degradation or mining of resources has occurred. At the same time, a growing body of research from both within China and around the world has pointed to the complexity of factors that must be taken into account in developing appropriate land tenure and management regimes for non-arable land, and has provided numerous successful examples of common property management approaches to forestland and grassland. RDI's policy recommendations related to forestland and grassland tenure can be found in a November 2001 Report (.pdf) issued jointly with the Yunnan Province-based Center for Community Development Studies.

The Results
Since 1988, RDI has informed Chinese policy-makers of its field-based findings and recommendations to help shape needed additional laws and policies to increase the tenure security and well-being of China’s 210 million farm families. A number of significant policy and legal reforms affecting rural land rights have grown, to a significant degree, out of this ongoing dialog.

• 30-Year Use-Right Policy. Beginning in 1993, China adopted a policy (but not a legal requirement) that farmers should have 30-year use rights – one generation rights – on their land. RDI’s research has shown that 30 years is a sufficient time horizon to permit farmers to make virtually all forms of long-term investment in the land. This has been confirmed by fieldwork in regions of China (such as Fuyang Municipality of Anhui Province, and in Guizhou Province) where farmers in fact received secure 30-year rights shortly after the new policy was announced.
  
  
• Land Management Law (LML). Then in 1998, the 30-year use rights policy was adopted as a legal requirement in a new Land Management Law (LML), with such rights to be embodied in formal written contracts. Subsequently, RDI carried out, in cooperation with Renmin University (Beijing Peoples’ University), two major sample surveys—in 1999 (.pdf) and 2001 (.pdf)—on the implementation of these provisions. Each of these surveys covered over 1600 households in 17 Chinese provinces, with a probable margin of error of ± 2.4%. The survey results showed that, by mid-2001, 47% of farm households had received 30-year contacts, and 40% of farm households had high confidence that they would be on the same land for the full 30 years. The latter result projects out to 85 million farm households who now have confidence in their security of tenure.
  
  
• Central Committee Document No. 18. In December of 2001, RDI’s village research findings prompted officials to issue this policy directive reiterating farmers’ right to voluntarily transfer their land rights while condemning, in very specific terms, any actions by local officials to interfere with farmers’ rights through attempted “re-contracting” (taking farmers' land and re-contracting it to investors or corporations without voluntary action by or even compensation to the original right-holders) and similar practices. This pronouncement signaled key policy-makers’ support for strengthening and protecting farmers’ rights in anticipation of new legislation.
  
  
• Rural Land Contracting Law (RLCL). In August of 2002, the Standing Committee of the National Peoples’ Committee adopted this groundbreaking law, replacing the single article of the LML that had dealt with farmers’ land-tenure rights with a detailed spelling out of farmers’ land rights and remedies. The RLCL offers substantial additional assurance of farmers’ 30-year rights, narrowing any possible remaining grounds for readjustments, detailing what is to be in the written contract, incorporating in formal law the protections for farmers’ land rights contained in Central Committee Document No. 18, and setting forth a comprehensive range of remedies for farmers whose land rights are violated.
  

  The RLCL spells out, for the first time, farmers’ rights to carry out transactions with their land rights, including not only lease, but assignment of the full 30-year right. Estimates of the probable market value of these rights in farmers’ hands, once a market has developed, range from around $400 billion up to $1 trillion. This represents new wealth for farmers in place of what had been (using Hernando de Soto’s phrase) “dead capital”.

• Women’s Land Rights. The RLCL also takes important steps towards protecting women’s rights within the framework of the household contracting system. Women's rights to land in China have, in theory, always been equal to those possessed by men. But household-based contracting and patrilocal practices throughout most of rural China have combined with the practice of land readjustments to negatively impact women.
  

  First, the law creates an explicit equal land right for women. The law further requires that a woman’s land share in her maiden village cannot be taken away unless she has received a new land allocation in her husband’s village. In case of divorce or death of the husband, the law protects a woman’s ability to retain her right to her current land allocation, whether it is located in her maiden village or her husband’s village.
  
  Additional legal and policy measures will be needed to further develop and implement women's land rights. RDI will be monitoring the impacts of the new RLCL on women’s land rights, and helping to promote reform in this critical area.

The Current Program
RDI now continues its role as the principal foreign advisor to China’s central policy-makers in the current reform process. After the adoption of the RLCL, RDI’s focus will principally be on the key problems of full implementation of that vital law. For, while approximately 98 million farm households had received 30-year contracts under the earlier LML, and some 85 million households have confidence in their security of tenure, this still means that 112 million (out of 210 million total) households do not have contracts, and 125 million do not yet regard themselves as secure on the land. And land market activity has barely begun.

Expected activities include input to the drafters of supplementary rules and regulations under the RLCL, input on the content of public information campaigns for farmers’ rights, training programs for officials involved in implementation, and continued farm-level research to monitor the successes or remaining shortcomings of the reform’s implementation. New initiatives are also anticipated, such as providing advice on pilot legal-aid programs to assist farmers, and on local registration systems for land rights to facilitate transactions in such rights.

RDI also continues to provide input on related laws, which are now at various stages of development or consideration. For more information on RDI’s China program,
contact Keliang Zhu at keliangz@rdiland.org.

Our Work | About RDI | Consulting | Research | Giving | Contact | Site Map | Home
© Copyright 2002-2007 Rural Development Institute