Agricultural Land Use Right Transfer

Recently, with the globalization of the world economy, the industrialization, urbanization, and information technology are speeding up their paces. While at the same time, the rural society is encountered with stagnation in development, the same problem as other countries met during their industrialization course. Factors like land, capital and labor, which support the development of the rural area, are taking on a structural twist in their circulation: the scarce land and capital are flowing out rapidly, comparing to the slow outflow of the large agricultural population and labor. This structural twist reflects the fact that the tense relationship between population and land is not relieved through continuous and steady development in domestic economy, but in contrast, has a deteriorating tendency. The negative effects reminds us that we must promote the circulation of agricultural land use rights, while sticking to the public ownership of land and steadiness of land tenure, which may help develop another fundamental of rural land property right system in China—to enliven the use right of land. It has great significance to improve the proper circulation of use right of agricultural land.There are three parts in the whole frame of this paper: the first part is the introduction, including the foreword and Chapter 1; the second part, covering Chapter 2 to Chapter 6, analyzes the internal circulation of rural land; and the third part, Chapter 7, focuses on the external circulation of rural land.Chapter 1 is a review to relevant references of rural land use rights circulation. After the Nobel Prizes in Economics go to a group of non-mainstream or new institutional economists, such as Hayek (1974), Buchanan (1986), Coase (1991), North (1993) and Vickrey (1994), institution drew people's attention and was taken into the analysis frame of economics. They pointed out that an efficient institution and its supply can improve the steady development of economy and the society, and optimize the resource allocation. The emergence of property rights system and its confinement decide the efficiency of resource allocation. Property right is actually a group of rights, including right to use, right to benefit and right of disposal. Different property rights transaction and division reflect different combination of rights and thus make great differences in transaction cost and expected returns. Therefore, clarification and perfection of property rights is a challenge facing up to modern property rights economics.Chapter 2 provides the background of circulation of rural land use rights. Based on investigations and typical cases, this chapter analyzes the background of rural land circulation in our country and explained its certainty and necessity, in the following four aspects: first, the reform course of China since the reform and opening up gives the basic institutional background; second, the operation of rural land the necessity of establishing a rural land circulation system; third, the basic condition of the rural families explains that rural land circulation is the choice of farmers themselves; Finally, the development of rural economy gives the economic background.Chapter 3 elaborates the form, condition, and features of the circulation of rural land use rights. A systematic analysis to the main form, principle, condition and features of the circulation shows its prerequisite: Land circulation can develop healthily and in good order only when the nonagricultural industries are highly developed and grow to be a main source of farmers' income, and when Pareto Improvement happens, that is, the circulation can lead to increasing returns or at least it will not damage the welfare of fanners involved in the circulation, ensuring their survival when the land is given up. This chapter also concludes five features with circulation of rural land use rights.Chapter 4 is a Qualitative analysis to the factors influencing the circulation of rural land use rights. Based on screening, induction, calculation and conclusion to massive survey results, this chapter focuses on the samples of three typical economic areas in China, including Zhejiang Province in the east, Hubei Province in the middle, and Sichuan Province in the west, analyzes their participation into the circulation of rural land use right and finally concludes correspondent theorem and its deduction.The impediment in circulation of rural land use rights is the result of various factors, among which farmers' income and its source is the determinant, including influence of different income level, influences of agricultural income and non-agricultural income. Thus two theorems and one deduction: Theorem 1, the higher income farmers can get from agriculture, the more willingly they are to increase land; the lower income they can get from agriculture, the more willingly they are to decrease land. Theorem 2, the higher income farmers can get from nonagricultural industries, the more willingly they are to decrease land; the lower income they can get from nonagricultural industries, the more willingly they are to increase land. Deduction 1, farmers' investing behavior does not totally depend on the income they get from agriculture or nonagricultural industries. His advantage, investment preference and past experiences may also affect their investment decision. If the income level of both agriculture and nonagricultural industries are high, the easier it is to earn from agriculture, the more willingly they are to increase land; the easier it is to earn from nonagricultural industries, the more willingly they are to decrease land.This paper divides the long-term investment of farmers into two categories: land-attached and not-land-attached, studies separately the determinants influencing the two types' long-term investment, and found it different. Small land adjustments obviously have different effects on different type of investment: reduction of people and land will significantly decrease the long-term investment of those farmers, with little influence on the use of manures; while the increase of people and land has little effects on either long-term investment of farmers with increased lands.One of the factors influencing the rural land circulation is the insufficiency of rural land property rights system. However, it's only one side of the corn. "The determination of property rights body should comply with the technical and economic characteristics of the object. Clarification of capital ownership is a prerequisite of determination of enterprise efficiency, but not a necessary and sufficient condition, which actually is the proper institutional arrangement to enterprise ownership. Even with clear property rights division in rural land, we cannot yet expect a high level of circulation in China, which is still a large agricultural country. The government shall eliminate the institutional obstacle blocking the circulation of rural lands instead of designing a new institutional arrangement.The deep feeling of traditional Chinese farmers towards land and the inherent culture and ideology of the rural society result in an obviously closed circulation market of rural land, which, together with the limitations in economic development, leads to a rural land circulation market with information impediment, big risk and limited buyers. It also decides that the circulation cannot reach a comparatively high level in underdeveloped areas.Chapter 5 is a quantitative analysis to factors influencing the circulation of rural land use rights. Two statistical analyzing software, SPSS and Excel, are used here to deal with the survey results of questionnaires to a number of farmers, and the existed statistics. Based on the statistical materials, this paper adopted "principal component analysis (PCA)" to screen the most significant ones from various factors influencing the circulation of rural land. It also adopted the "grey relation analysis (GRA)" to study the magnitude of influence with each main factor, and reveal the main contradiction in rural land circulation.Chapter 6 gives some suggestions to promote the circulation of rural land use rights. According to the factors influencing the circulation, this chapter suggests that, in order to promote the circulation, we shall, establish a long-term mechanism in favor of labor transfer of rural area, perfect the macro regulative mechanism, micro adjusting mechanism, as well as the intermediary organizations, and improve coordinated reform and social services.Chapter 7 talks about circulation of rural land to non-rural land. The current land requisition system of China highlights the feature of government monopoly, that is, the government forbids the land ownership market, monopoly the primary land market, and take land requisition as the chief measure to get nonagricultural construction land. This institutional arrangement ensures the profit of government as the operator of land requisition in a short period of time. Through the analysis, the author states that, as long as the government compulsively interferes into the economic relationships, it will definitely lead to loss in social welfare and increase in social cost. Therefore, in order to protect the economic welfare of public land owners and users, the government must stop its dual identification as both "economic body" and "administrative body", so that the market can allocate resources most efficiently and maximize social welfare. We shall realize that, in respect of public land market, governmental management is essential, but the government cannot interfere into economic relations. Besides, comparative mechanism shall be introduced into the market, so as to eliminate the institutional rent-seeking.In recent years, to find a solution to the "agricultural, rural and farmers' issues", our country made great efforts to increase farmers' income. However, the result turns out confusing—the urbanization, originally targeted at the "agricultural, rural and fanners' issues", increase some farmers' income at the expense of other farmers' profits during the process, and created a new group of poverty, farmers without lands. As a interest group, these farmers has a large population, but a weak negotiating ability and low level of organization, which put the farmers of our country at a disadvantage in the game against all the other interest groups. When their land rights are violated, the farmers cannot carry out an efficient negotiation with the government. What's more, being excluded from the making and implementation of land requisition policies, the farmers are actually deprived of the right of speech.