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A pioneer in land-use rights reform

By Wang Zhuoqiong (China Daily)
Updated: 2008-11-21 08:40

Li Changyou uproots a leafy plant with a ginger the size of a rugby ball. The ginger from the farm in Gongjiazhuang village, Shandong province, can soon land on the shelves of British supermarket giant Tesco and other supermarkets in European Union countries.

The 44-year-old works for Laiwu Manhing Vegetables Fruits Corporation, which last year acquired the land-use rights of almost all the farmland in Li's village.

Last month, the central government encouraged farmers to transfer their land-use rights to develop large-scale agriculture, improve efficiency, increase production and raise farmers' income - in short, raise the living standards of rural people.

Workers pack giner at a collection center in Laiwu, east China's Shandong province. [China Daily]

"The land-use rights market has existed for many years," says Han Jun, director of the State Council Development Research Center's (DRC) rural economy department. "But only 5.68 percent of agricultural land has been transferred so far."

That's why the new policy does not mean there'll be a rush across the country to transfer land-use rights. Nevertheless, the new policy is widely considered the most important since the establishment of the rural family household responsibility system in 1978.

Farmland is owned collectively in China but allotted to farmers in small plots on long-term leasing contracts, which usually are 30 years. But with the rural-urban income gap widening (some experts say the ratio is 1:3), the government has issued favorable polices, such as lifting agricultural tax and increasing the subsidy to farmers growing grains, to develop rural areas.

The company, the country's second largest ginger exporter, however, began acquiring land from farmers in Gongjiazhuang and three other villages in Laiwu municipality a couple of years before the new policy was issued. Large-scale, standardized farming has enabled the company to not only increase output, but also lift its food safety level. Hence, its products are even exported to developed countries at prices 10 times higher than they would fetch in the domestic market.

Gongjiazhuang, home to about 3,000 people, lies in a mountainous terrain, so development took time to reach it. It used to be a village of houses with weather-beaten tiled roofs and gray walls. Farmers either went to work in the fields, or migrated to cities, leaving a few women, elders and young children at home.

The situation started changing about three years ago. Before Spring Festival in 2006, Gongjiazhuang was split into two camps: one-third of the families agreed to lease their land, with the rest being adamant not to because they doubted the fate of the deal. "It was very difficult," says Shen Yulu, 54, the village director, who began going from door to door to mobilize the villagers to lease out their land. "There was no precedent of large-scale transfer for the villagers." They had been growing ginger, garlic, corn and peanuts on their separate plots for years. That's why many of them were reluctant to transfer their land-use rights.

"We had been farming all our life," Li says. "Farmers were worried whether the plan would work out. 'If you take our land away, what will we do?' they said."

To allay the villagers' fear, the village committee stepped in as warrantor. "We told the reluctant villagers that 'if the company didn't pay, we had the right to call off the deal'," and that the 10-year lease would be reviewed annually, says Jia Chuanying, elected Party secretary of the village last year.

To convince the adamant farmers, the company began a pilot project on 40 hectares of transferred land, using standardized farming, irrigation and natural fertilizers. "It was then that the reluctant farmers started changing their mindset," Liu Jianzeng, the company head, says. "They knew the small plots would never produce more money."

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