Food Security Under The Guide Of Land Development Rights Circulation Mechanism Building And Its Economic Effects

With the accelerating of Chinese industrialization and urbanization, the allocation of land resource to different sectors has been the hotpot of the factor market. The conflict originates from the fact that the agricultural lands transformation in large scale is viewed as a threat to Chinese food security, and meanwhile the marginal net benefits derived from the construction lands far overwhelm that from the farmlands, which results in the giant pressure of land re-allocation and improvement of social welfare. The focus of land allocation conflict lies in that areas with high construction land demand cannot translate the fundamental farmlands into construction lands or urban areas freely, and the nature of this phenomenon is that the development rights of fundamental farmlands in these areas are deprived by strict administrative control. On the one hand, the economic development is limited in some districts, and on the other hand, the zoning policy leads to the evaporation of some value of fundamental farmlands. To solve the problem above, it is urgent to effectively organize the incentives of different agents and guide them to reach the efficient allocation of resources.The present paper keeps silent to if the zoning policy is reasonable, and the destination is to look into the efficient allocation under this constraint. We introduce the strategy of bundling according to the nature of fundamental farmlands to determine the size of lands under one unit of development right, and make it the object of the auction. Then by applying the VCG mechanism in multi-unit auction theory, we make local governments participate in the auction and truthfully reveal their evaluation of development rights. Finally, we can pin down the level of transfer payments for each bidder following the thought of VCG mechanism. The economic effects of transfers of development are also briefly discussed at the end of this paper.