Research On The Legal Issues Of Rural Land Mortgage Financing

At the core of the issues concerning agriculture, countryside and farmers is rural land and the key to the issue of rural land is land right. The subject of the research is the law issues concerning rural land right mortgage. For all the breakthroughs in national policy-making, rural land right mortgage still awaits a compatible legal right mechanism. In view of this, this paper begins with a perspective from private law, expounds on the fundamental legal issues concerning rural land right mortgage by reviewing the history and employing various approaches such as comparison, value and empirical study and analyzes emphatically and systematically the legal issues concerning rural land mortgage right.This paper is consisted of an introduction, a conclusion and a body of 5 chapters.Chapter 1 the context of rural land mortgage system is reviewed. In the ancient times, rural land finance observed certain common practices but never a systematic mechanism. In practice, it often took the form of the land or residence mortgage but the conventional practice is close-end in nature and greatly confined by the traditional means of rural land production and management. Since the modern era, the traditional practices have declined while value and guaranties mortgage have followed the western practices that were more standardized and systematic, with the result of the issuance of a number of rural financial laws regulations and the institutionalization of financial agencies. Despite this, the system still falls far behind the fast growth of the modern financial organizations. Currently, the operation of land management contracting right and farmer housing and property right mortgage is rendered valid in terms of national policies but mismatched due to the absence of a legislative operation mechanism. For instance, the current land mortgage system operates on a narrow scale and is insufficient; differentiated treatment exists in rural land use rights and differentiated power of mortgage have been granted depending on the limited types of the rural land uses specified by the law; a diversified form of land rights has emerged from different regional land marketization models and the mortgage power of the diversification all depends on the legislative selection. Land has demonstrated three types of properties: nature, economy and society. Its economic property signifies self-interest while social property its public interest. To realize land capitalization is the driving force of rural land. Compared with the mature urban land mortgage institution, laws on rural land mortgage are in great demand and from the perspective of civil law, there is absence of specified and practicable legal norms for land rural right mortgage.Chapter 2 entails an empirical field research is described on rural land mortgage. Specifically, the author has surveyed over 12 prefecture-level cities in Anhui Province in the form of questionnaires and individual interviews and researches. And based on the practice samples in the polite areas, the dissertation aims at the state quo of the function of the land mortgage system in the rural society and seeks to construct a reliable path in private law towards the sound mortgage mechanism. The pilot regions for land contractual management right mortgage are expanding in scale. Most of them are mainly supported by cooperative finance and policy-oriented finance and take the form of direct mortgage, the third party guaranty mortgage, collateral mortgage, trust and land security; the majority of these regions have all set certain limits to the mortgage rates, duration and land scale. Likewise, housing land use right mortgage is trapped in the land or building dilemma in that the “land and building” principle restricts the mortgage use right of housing land, so it is necessary to design a limited mortgage mechanism to invoke the financial incentive of housing land usufruct. Commercial collective construction land use right can be used for mortgage, but collective construction land for public purpose cannot. Collective construction land right mortgage typically occurs in the land transferring, and need to get the consent of the collective land owners; laws have restricted the effectiveness of the land use right mortgage, and made the mortgage value less than it is, and the financial services are seriously falling behind. In doing so, the book expounds on the legal barriers, operation effects and institutionalization, so as to provide for the construction of China's rural land mortgage legislation.Chapter 3 the institutional basis of rural land mortgage is demonstrated. Theoretically, according to national traditions and foreign legislation practices, usufruct goes with the right of disposing; therefore, right can make the object of mortgage. Hence, the rural land right mortgage is the governance of land value and bears the dual function of both guarantee and finance. The construction of rural land mortgage system therefore has to reference the theory of land property right, the principle of resources distribution optimization and the theory of justice in right distribution. The schema shall respect the individual farmer's interest and aim at the construction of an equal and efficient rural land legislation with a pursuit of common wealth. The realistic path of rural land right transformation is to specify farmers' land right and facilitate the marketization and capitalization of land use right on the basis of collective land ownership. In China's three-layer structure based on collective land ownership, the usufruct and disposable nature of contracted land management rights, housing land use right and collective construction land use provide a systematic guarantee for the land mortgage system. At the core lies the principle of factual justice, i.e. on the basis of creditor's rights realization, mortgagor-centered rights and liabilities are practiced; the scope of mortgagor shall be open-ended while the scope of the subject in the mortgage relations shall be confined; on the principle of efficiency, foregrounding procedures such as the third part's “grant” or “check and approval” shall be cancelled for the convenience of the installment of mortgage rights; the mortgagors shall be protected in terms of institutional measures such as limiting land area or value in the mortgage, establishing insurance, and setting up mortgage risk funds; other things being equal, members of the community shall have the preferential redemption right in accordance to their membership.Chapter 4 concerns the legal framework of rural land mortgage. In view of the current national conditions and the peculiarity of objects in the mortgage relations, the rural land right mortgage mechanism shall be generalized into common mortgage regulations for it varies in many operational aspects such as mortgage subject, object, deal settlement, contract duration and realization: the scope of mortgagor shall be open-ended: members of the farmer community, family farms, farmer cooperatives, agricultural enterprises, organizations or individuals are all potential subjects as mortgagors; in order to prevent financial risks resulting from rural land mortgage and protect farmers' basic survival rights from excessive land merging, the entity as the debtor should gradually be confined to the specific financial agency--- land bank. Land contractual management right mortgage is the mortgage of management right, where management right is separated as a new category of right without any damage to land ownership and the nature of contracting. Mortgage on land contractual management right differs from that on rural land usufruct, which in fact refers to usufruct on credit rights turnover. The object of housing land use right mortgage is housing land use right but the scope of entity in housing land use right is not limited to members of rural community but also those who originally gain the land use index on the individual basis and acquire the land use right on the basis of the household but pay for the tenured land use if they gain the land by inheriting or granting. The object of collective construction land use right mortgage is normally the use right of productive land or land in stock within the community.Within the framework of rural land mortgage, types of rights and liabilities, the acquisition, paid use, tenure and forms of standard mortgage will be systematically delineated and designated. The realization of land contracted management right mortgage include direct mortgage, cooperative mortgage, the third party guaranteed mortgage and shareholding mortgage of land contracted management right. In the case of housing land use right, it is imperative to build a limited mortgage system that entitles the full property rights to the newly acquired housing land use right, practice the principle of limited mortgage on the stocked land that is acquired free of charge or paid for the use right, and allows for the mortgage of housing land use right if certain requirements are met. The use right of collective construction land includes two types: ownership mortgage and use right mortgage. Besides, the scope of land contracted management right does not include crops. When the housing land use right is mortgaged the above-ground structures are mortgaged. In the case that the owner of the structure is not the subject of the housing land use right, the solution lies in the loan contract and both parties are able to resort to the jurisdiction. In time of mortgage disposition, the farmer mortgagor or members of farmer community in the mortgage relation should have the preferential redemption rights. To ensure the realization of rural land mortgage rights, it is possible to set up rural land mortgage risk funds, impose compulsory insurance, operate differentiated institutional and governmental risk compensation, or other multilateral mortgagors' interests oriented rural guarantee mechanisms.Chapter 5 is designed for the institutional support for rural land mortgage. With regard to the maintenance of public interests and social security, it is necessary to put the land use mortgage rights into proper scrutiny in terms of mortgage entity, mortgage use, forms of mortgage, debt-paying ability, partial mortgage, land planning and use control. The farmer mortgagor should have a stable source of income, be financially able or engage in a stable non-farming occupation, while the debtor is confined to the financial agency; the principle of partial mortgage should be practiced, i.e., a maximum area or value should be set for the mortgaged rural land; the mortgage-backed loan should be solely channeled to production, investment and development programs concerning agriculture; the rural land mortgage should meet the standards of general land use planning and regulating. In addition, it is imperative to rural land right registration system, build Chinese land banks, establish rural land right purchase, storage and trade centers, adopt the rural land right use right evaluation system and perfect rural social security system and fiscal and taxation system for support.