Study On Mechanism Of Economic Compensation For Cultivated Land Preservation

Cultivated land is the most important means of agricultural production. It is the first requirement for protection of national food security and balance between supply and demand of major agricultural products. At the same time it is to ensure social and economic stability and sustainable development. However, in the process of socio-economic development a significant reduction in the number of cultivated land in China, decline in the quality. According to statistics, The total cultivated land area has declined to 121,740,000 hm2 in 2007 from 138,860,000 hm2 in1965 and it has been close to the warning line of 18 hundred million mu of cultivated land. Although it has taken a series of policies in cultivated land preservation in China, the trend of exacerbated decline in cultivate land has not been effectively curbed. The lack of mechanism of economic compensation for cultivate land preservation is an important reason. To solve the problem it is necessary to establish mechanism for economic compensation for cultivate land preservation and improve the policies and systems of cultivated land preservation. Based on this background the main content of the statements and conclusions are follows:First, this paper analyzes the policy structure and objective basis of these problems of cultivated land protection. It finds that the lack of mechanism of economic compensation for cultivate land preservation is a fundamental reason. So it analyzes the reasons of establishing mechanisms for financial compensation for farmland protection based on the theories of the opportunity cost, the external economic, the value of cultivated land, public goods and public finance and etc.Second, mechanism for economic compensation for cultivate land preservation is built. The framework contains in the content of the compensation mechanism of the level and type, elements, principles, objectives and significance, mechanism operation and other aspects and solved the question of how to compensate. The economic compensation for cultivate land preservation is divided into inter-regional compensation and compensation within the region. The inter-regional compensation includes inter-provincial compensation and inter-county compensation. The compensation within the region is a compensation for property rights of cultivated land. The beneficiaries are all citizens in the protection of cultivated land providing food security, social stability and ecological services. So the approach of government's compensation is the main form of economic compensation for cultivated land preservation.Third, the object and subject of economic compensation for cultivate land preservation in China are defined on the basis of analysis of compensation and property rights. The paper considers that the object of economic compensation for cultivate land preservation in China is farmers having the right to land contractual management, the rural collective economic organizations that land is not contracted households, governments with local economic development and commitment to farmland protection responsibilities. Generally speaking, the subject of compensation is the beneficiaries in cultivate land preservation. As the output efficiency in cultivate land preservation is public goods, the subject of economic compensation for cultivate land preservation in China is mainly the central government, the local government who does not assume his corresponding task, and the non-agricultural businesses.Fourth, the standard of economic compensation for cultivate land preservation is analyzed. It is reasonable and feasible to set the standard of economic compensation for cultivated land preservation based on the opportunity cost. Loss of profits and opportunity cost of local government and farmers in cultivate land preservation are defined respectively. And the standard of inter-regional compensation and compensation within the region is also defined. It is advised that the annual income difference between as farmland and construction land is the basis of annual compensation, and annual compensation is as a standard for cultivated land preservation. The study calculates that the standard for inter-provincial compensation for cultivate land preservation in China is 1.61 yuan/m2 in 2005. And the compensation standard of farmers for paddy land preservation is 0.77 yuan/m2, and for dry land preservation is 0.92 yuan/m2 at Xiao Zhang Jia Village Mao Town Tong Shan County in 2008.Fifth, the application of economic compensation for cultivate land preservation is researched. The results show that the level of the national real per capita food consumption is 387.62 kg in 2005 and the food self-sufficiency rate is 95.5%. There is a deficit of the cultivated land in Beijing, Tianjin, Shanxi, Shanghai, Zhejiang, Fujian, Hubei, Guangdong, Guangxi, Hainan, Sichuan, Guizhou, Yunnan, Tibet, Shaanxi, Gansu and Qinghai. The number of deficit of the cultivated land is 18,502,200 hm2. There is a surplus of the cultivated land in Hebei and Inner Mongolia, Liaoning, Jilin, Heilongjiang, Jiangsu, Anhui, Jiangxi, Shandong, Henan, Hunan, Chongqing, Ningxia and Xinjiang 14 provinces. This shows that it is a rather arduous task of cultivated land protection and ensuring food security. According to annual compensation standard of 1.61 yuan/m2, in 2005 these provinces (municipalities) in the deficit of the cultivated land need to ambulantly pay a total 2404.7 hundred million yuan of compensation to those provinces (municipalities) in the surplus of the cultivated land.On the basis of the study of the mechanism for economic compensation for cultivate land preservation at XiaoZhangjia Village Mao Town Tongshan County, it was found that the loss of opportunity cost in cultivate land preservation is 1.08 yuan/m2 of paddy land and 1.33 yuan/m2 of dry land, and at weighting average 1.15 yuan/m2. And the wish of the standard of farmers is 0.46 yuan/m2 of paddy land and 0.51 yuan/m2 of dry land, and at weighting average 0.49 yuan/m2. The economic compensation for farmers cultivate land preservation is required less than the loss of opportunity cost. It is suggested that the average of the loss of opportunity cost and the wishes of the standard of farmers'compensation is as a standard of compensation.Based on the above findings, the paper makes some policy recommendations to strengthen cultivated land preservation, including:building mechanism for economic compensation for cultivated land preservation; establishment of cultivated land protection duty; construction of the system of scientific assessment of costs and benefits of cultivated land protection and so on.