The Telegraph
Since 1st March, 1999
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Land-use rights for China farmers

Beijing, Oct. 11: Chinese leaders are expected to allow peasants to buy or sell land-use rights for the first time, a step that could draw hundreds of millions of farmers more firmly into the market economy, now centred around the cities.

The new policy, which is being discussed this weekend by communist party leaders and could be announced within days, would be the biggest economic reform in many years and would mark another significant departure from the system of collective ownership and state control that China built after the 1949 revolution.

Party leaders began reviewing a draft of proposed rural land reform laws on Thursday at their annual planning session, now under way. Policy changes are expected to be announced after the session ends tomorrow, scholars and government advisers say.

The most important change would allow China’s peasantry, which by official count includes about 800 million people, to sell land-use contracts to other farmers or to agricultural companies. Some economists say this shift would lead to more efficient land use and allow much larger farms to be established.

The Chinese leadership has long insisted that the country must remain self-sufficient in the production of staple foods, and is highly unlikely to allow farmers to sell land-use rights for non-agricultural development.

But if a market for trading farmland developed as expected, peasants could gain a new source of cash income that could help revitalise the stagnant rural economy.

“If all the speculations are true, if senior leadership is going to lift all the restrictions out the door, I’d say this is a great positive,” said Keliang Zhu, a lawyer with the China research division of the Rural Development Institute, a Seattle-based organisation that has pushed for land rights for the rural poor. “It’ll free up the dead capital and allow all this wealth to materialise.” Zhu added that the change would give China “huge momentum in terms of agricultural development”.

Chinese leaders are alarmed by the prospect of a deep recession in leading export markets at a time when their own economy, after a long streak of double-digit growth, is slowing. Officials are eager to stoke new consumer activity at home, and one potentially enormous but barely tapped source of demand is the peasant population, which has been largely excluded from the raging growth in cities.

Average income in rural areas lags far behind the average in cities, giving China one of the starkest income gaps in the world. Many farmers work on tiny, state-allocated plots of land for a small fraction of the year, investing little in agriculture.

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