The Operating Mechanism And Practical Exploration Of Land Circulation Trust In Henan Province

With the development of new urbanization, a large number of rural labor forces are shifting to secondary and tertiary industries, and then rural land vacancy rate is starting to rise. In order to solve the phenomenon of abandoned farmlands, rural land circulation begins in many areas. Through the land circulation, rural land utilization rate begins to rise, the earnings of land outflow and inflow parities have also increased than before. But there are some problems occurred in the process of land circulation, such as the non-standard land circulation, agriculture business entities with financial difficulties, etc. Such problems make land circulation difficult to play an efficient role, and new ways to solve the current land circulation problems is urgently needed, so land circulation trust arises at this historic moment. As the big Agricultural province, Henan province is creating the core area of stable development of grain production and promoting the rural management system innovation actively in recent years. With the advantage of land circulation trust in other areas, Henan province recognizes that land circulation trust is an effective means of land reform. Land circulation trust not only can solve the problems arising from the existing land circulation effectively, but also has a series of dividend effect, for instance, lowering the agricultural production costs, squeezing out the value-added benefits, improving the quality of agricultural products. Therefore, the research on operating mechanism and practical exploration of land circulation trust in Henan province, can really help to fundamentally understand the role and significance of trust in the land circulation, and is also beneficial to explore the profit model of land circulation, thus it can promote the development of rural economy in Henan province. Hence, this research is of great practical significance. However, the study on operating mechanism of land circulation trust is still not too much in the existing research.From the view of the four basic conditions of land circulation trust, which are confirmation of land right, large-scale management of land, embedding of agricultural insurance and the improvement of the rural social security mechanism, based on such environment. The successful land circulation trust mode can be pushed in Henan province and also other areas. The transaction cost advantage of trust deed is analyzed through the theory and profit matrix model, concluding that the land circulation trust is a good choice. It demonstrates the behavior selection basis of the micro trading main body through the limited dynamic game model. With incomplete information, clients can’t observe the efforts of the trustee. Trustee’s supreme effort level with incomplete information is lower than the effort level of the trustee with complete information, which is to increase their economic utility. But there is moral hazard problem with incomplete information, he will take external uncertain factors for responsibility, in order to escape from the client’s criticisms. With complete information and the external government’s supervision and incentive mechanism, the behavior of the client and the trustee for the optimal Nash equilibrium is(entrust, efforts). So with the external government’s supervision, the trustee would accept the trust, and try hard to operate the land in order to gain efficient earnings of the land, as long as the government’s reward and punishment is reasonable, at the same time the efficient agricultural purposes of the land is protected.Some areas in Henan province have possessed the four basic conditions of land circulation trust through the field survey. Huaibin County and other areas have began the practical exploration and made some progress. However there are still some problems: the overall confirmation of land right has not finished and the rural social security mechanism is not sound in Henan province; the qualification examination of agricultural management main body and trust institution is not fully paid attention to, which may breed ground for land circulation trust risk. In order to reduce the land circulation trust risk, measures can be taken like speeding up the work of confirmation of land right, improving the rural social security mechanism, setting up qualification censorship of agricultural management main body, and strengthen the censorship of trust institution, thus the agricultural modernization and the urbanization of Henan province can be further carried forward.