Land Tenure System in China: Who is it working for, and what is it working toward?
China’s Conundrum
China is the most populous country in the world, with 1.36 billion people. According to The World Bank, arable land per capita in China is 0.09 hectare.[1] To put things in perspective, the United States of America is 4 times less populous but has 5 times more arable land per capita than China. Despite land scarcity and high population, China leads the world in agricultural output, producing an impressive amount of food, fiber, and animal protein that the world needs.
This impressive level of agricultural productivity has come at an immense cost to China. Environmental degradation is cited as one of the top concerns by its citizens. Soil degradation, water pollution, and biodiversity loss are some of the environmental challenges faced by China. Worse, agricultural productivity level in China has shown to be decreasing due to such degradation. There is also a heightened concern around clean drinking water and safe food products amongst its citizens.
China has been urbanizing and industrializing at a fast rate during the past forty years. The lure of living a modern life has led the young and able to migrate to the cities since the 1990s. Villages are often seen populated by the elderly, women, and left behind children.
In 2012, I had the opportunity of visiting a smallholder farmer couple in Huzhou, Zhejiang province. The elderly couple has a small plot of land on which they grow mulberry trees for silkworm rearing, providing them with a vital source of income. In addition, they also grow rice and vegetables, with chickens and ducks running around the farm. When I asked them about their child, they brimmed with pride, and said that their son works in finance in the city. They chuckled when I asked them about the future of their farm, as it was clear that their son has no intention of returning to the village.
During that same trip, I also met with two migrant workers from Jiangxi province. Huang Li, a young woman in her early twenties and her mother both work in the silk garment factory in Hangzhou, Zhejiang province. I was lucky enough to visit their homeland just outside of Jingdezhen, a town famous for hand painted porcelain, and met with Huang Li’s grandmother. I saw for myself the family farm that is no longer tended to. Huang Li’s mother first migrated because two major floods in the mid-1990s completely destroyed their farm livelihood. Huang Li later followed her mother’s footsteps to Hangzhou due to the lack of financial resources for her to continue onto high school. She told me that she tried to learn porcelain painting, but claimed she was not talented enough for it. Therefore, she decided to ‘go out’ and seek employment opportunities in Hangzhou as well. China’s increasingly empty rural villages are being littered with empty farms. Abandoned rural farms are threatening food security,[2] a sensitive issue in China.
Population and Agricultural Intensification
Ester Boserup, a Danish economist, had a theory. The Boserupian theory posits that agricultural method is dependent on the size of population, and people will always find a way to increase agricultural productivity with population pressure. In other words, population pressure stimulates innovation. Boserup’s theory played out perfectly in China, as pointed out by Robert Netting in his book Smallholders, Householders. Population pressure in China stimulated agronomic innovation that promoted agricultural intensification. Prior to modern technology, Chinese farmers figured out a way to produce enough food, albeit by “sacrificing productivity of labor for the productivity of land.”
F. H. King, an American agronomist detailed traditional agricultural practices in China in his book Farmers of Forty Centuries. Due to China’s unusually dense and ever-growing population, agricultural intensification is not a new phenomenon, as farmers started growing multiple crops annually since the Han dynasty (A.D. 2 to A.D. 146). [3] In the modern era, with an ever-growing population, limited arable land, labor shortage in agriculture, and food security in mind, the Chinese government has put a lot of emphasis on agricultural modernization in its policy making. Green Revolution style agricultural technology such as modern inputs, machines, and irrigation has been promoted to increase agricultural output. But first, the country needs to tackle the limiting factors to modern agricultural technology; problems that are embedded in China’s institutional patterns of land tenure.
Land Transfer: A Prerequisite for Agricultural Intensification
Agricultural activities in China are closely linked to its land tenure system. Property rights look very different in China compared to, say, the United States of America. Land in China is divided into urban and rural land. The socialist central government of China used to own all the land. In 1978, the Household Responsibility System shifted the Chinese land system completely from collective ownership and cultivation to the household contract system, granting individuals in rural households decades-long leaseholds. Urban land is still owned by the central government, and rural land is neither owned by the central government nor the farmers themselves, but rather by rural collectives; which are administrative villages with leaders selected through open, and often imperfect elections.[4]
This results in the existence of many farmers with small and fragmented pieces of land. Chinese smallholder farmers are often poor, and unable to invest in new technology. Even if they could afford it, it simply does not make sense to use big machines on small and fragmented pieces of land. As a result, according to Jingzhong Ye, land reform is “seen as a way of achieving scaling up and promoting a technocratic, mechanized, specialized and standardized agriculture.”[5]
Land transfer used to be prohibited in China. In light of urban to rural migration and the increasingly abandoned and derelict farmland in rural China, land transfer is now highly encouraged by the government as a way of increasing farm size.[6] The latest land reform in 2016 allows farmers to collectively transfer their land use rights in exchange for annual payments while retaining the ownership of their land contracts.
The Financial Times reported that with this new land reform, China has cleared the path for corporate farming.[7] Businesses can take over management of collective land while providing employment and revenue to villagers. As elderly farmers can no longer farm their land, transferring land use rights to a corporation will allow them to receive an income. In addition, the Chinese government can realize higher agricultural yield and solve the issues of food security in China.
Zhejiang province leads the country in the development of a land rental market. The province has the highest incidence of both off-farm employment and labor force out-migration. As a result, it has been experimenting with institutional innovations around land rental market.[8] For the elderly silk farmer couple who I met in Huzhou, land transfer could work in their favor if they are no longer physically able to farm their land. Renting their land to a silk company could ensure them with a stable, though small income. For Huang Li’s mother, even though it has been almost ten years since her migration, I recall her wish to return to her homeland again when she retires. Huang Li’s grandmother still lives in their ancestral home, and it is for that reason that Huang Li’s mother is reluctant to permanently migrate to the city. Her goals of being a factory worker in Hangzhou is to earn enough money to build a solid home and be able to live a peaceful and comfortable life back in her homeland. I felt her sense of nostalgia when she spoke about her dream of being a peasant again.
Land transfer is the latest tool being tested by the Chinese government to increase land size in the hopes of modernizing agriculture. In a way, this latest reform is a social innovation that would allow for the intensified agricultural system that Boserup discussed. However, will this latest version of land reform propel China towards food security, improved rural livelihood, and environmental sustainability?
Ecological Capital vs. Financial Capital
It is generally believed that the Western style agricultural modernization is good, as evident by the policies set forth by the Chinese government. In order to have modern agriculture, certain conditions are considered to be necessary in order to have ongoing growth — large farm size, technology-driven intensification, standardized monocrop fields for efficiency. If the latest land reform works, smallholder farmers will transfer their land use rights to capitalists, who have the financial capital to invest in technology that are necessary for agricultural modernization and perhaps also friendly to the environment. Agricultural output will increase, smallholder farmers can receive a stable income from land rental and perhaps also become hired as agricultural laborers, and food insecurity in China is averted. Everything will work out in the world of market-driven agricultural treadmill of production.
However, is the picture truly that rosy?
Jan Douwe van der Ploeg and Jingzhong Ye, authors of the book China’s Peasant Agriculture and Rural Society do not think so. To answer this question, let’s take a look at the differences between peasant farms and capitalist farms. Peasant agriculture converts ecological capital into products through labor, whereas capitalist agriculture converts financial capital into commodities through labor and importantly, technology.[9] It is known that standardization in agriculture means monoculture fields. These are often input intensive and have shown to pollute soil and water in the long term, as evident by the experiences in the United States. The fact is, for 4000 years, Chinese farmers have managed to farm the land without depleting the soil.[10] Also, the bloodless economic interdependencies in capitalism means that profit-making will ultimately be the guiding principles in the daily management of a capitalist farm. In the few case studies presented by the authors, it appears that output per land unit is actually lower in capitalist farms when compared to peasant farms. This means that capitalist farms are neither more productive nor more profitable, making one questions the sanity of supporting capitalist farms when they do not improve food security, rural livelihood, or environmental sustainability.
In Zhejiang province, even though the central Chinese government wants to ensure food security, the local government wants to ensure economic development. Land for food is being used for cash crop (mulberry) due to the close connections between local government officials and silk companies, essentially allowing them to influence local land use plans. This is where the Boserup theory fails. It failed to consider the impact social relationships (guanxi) could have on agriculture. In this case, farmers are still productive, but not necessarily producing food due to social dynamics in Zhejiang province. Silkworm farmers are also abandoning food crop production in favor of silk cocoon cultivation due to higher income and lower labor intensity of silkworm rearing compared to rice farming. As a result, there are places in the region aptly named as ‘no grain villages’ and threatening the balance of land use between food crops and cash crops in the region.[11] Cash crop monoculture has a negative impact on the environment in Hangzhou, one of the major cash crop plantation bases in China. Profit-maximizing smallholder farmers are unwilling to adopt cash crop restriction practices, resulting in the economic benefit at the cost of ecological security.[12]
The situation is more nuanced, of course. According to Lyu, Chen, and Zhang, soil quality could actually go either way, and is dependent on the type of crops planted, production mode of farmers, and lease length. Land transfer could potentially promote the application of machinery that would allow the use of conservation tillage technology, thereby improving soil quality instead of degrading it. Based on their research, soil quality of rented land is significantly higher than self-owned land in Zhejiang province.[13] In addition, van der Ploeg and Ye did state that higher yields could be achieved in capitalist farms if they make use of technology that are not financially accessible to peasants.
Who Will Till The Land?
An undeniable challenge that the Chinese government have to grapple with is the lack of agricultural labor force in rural areas. The perception of agriculture by young people in China has been poor. For the silk farmer couple’s son, it was clear that he will not leave his job in finance and return to farm the land. Huang Li does not know how to farm and seems to have very favorable childhood memories of the farm, showing me the favorite tree that she used to climb often. Recalling a conversation with Huang Li’s mother, I felt the sense of guilt in her voice; for not being able to afford to send Huang Li through high school and causing her to chiku (literally translated as ‘eating bitterness’) and laboring as a factory worker. She prevented Huang Li from enduring more hardship in her life by not teaching her how to farm. She wants her to have a better life than the one that she has for herself.
However, would the increased population pressure plus the lack of farm labor stimulate agricultural technological innovations? Boserup believed that human ingenuity will always find a way. Could technology make agriculture cool to young people? Liao Yue, a PhD student who wrote for Sixth Tone, seems to think so. It is not easy, however, as high tech equals high cost investments, which is often out of reach for peasant farmers. Also, young people may only want to work on tasks that are related to smart agriculture, with menial tasks still left untouched.[14] In recent years, fueled by food safety and environmental concerns, there are more and more aspiring young farmers in China.[15] However, farming is not seen as a favorable way of life due to low profitability.
The Chinese government wants to ensure a vibrant future of agricultural production to ensure food security. The void in its rural agricultural labor force is a real challenge. Larger farms would allow for a technocratic agricultural system, replacing human labor with machines. To make that a reality, consolidating fragmented land is key, which is why land reform has been a big policy focus in China. To encourage effective land transfer, the Chinese government has some additional work to do. According to Gao, Sun, and Ma, in order for the land reform to trigger an increase in land rentals, the current farmland transfer platforms need to be updated to improve clarity and reduce transaction costs.[16] A well-functioning arbitration system to resolve land disputes would be important, as well.
It is clear that in order for agriculture in China to work for both the people and the environment, innovative policy reform is required. Although Boserup mentioned the importance of equality in her theory, her focus on agricultural intensification is on technological fixes that intensify food production. The Chinese government has another option; which is to focus on slowing down rural to urban migration by maintaining farming as an important way of life. This could be done by instituting supportive market and agricultural policies. It is only when these social-political innovations take place that China can truly take advantage of technology. Boserup’s focus on increasing food supply through technology is only a short-term solution. In order for agricultural systems to work for the long haul, China needs to account for the interests and values of its people, especially farmers, in order to find a new way to grow sustainably and equitably.
Footnotes:
[1] The World Bank, “Arable Land (Hectares per Person) | Data,” 2016, https://data.worldbank.org/indicator/AG.LND.ARBL.HA.PC?type=shaded&view=map.
[2] Feinuo Sun, “The Abandoned Rural Farms Threatening China’s Food Security,” Sixth Tone, 2017, http://www.sixthtone.com/news/1000538/the-abandoned-rural-farms-threatening-chinas-food-security.
[3] Robert McC. Netting, Smallholders, Householders: Farm Families and the Ecology of Intensive, Sustainable Agriculture (Stanford, California: Stanford University Press, 1993).
[4]Qian Forrest Zhang and John A Donaldson, “China’ s Agrarian Reform and the Privatization of Land: A Contrarian View,” Journal of Contemporary China, vol. 22, 2013, http://ink.library.smu.edu.sg/soss_research/1039.
[5] Jingzhong Ye, “Land Transfer and the Pursuit of Agricultural Modernization in China,” Journal of Agrarian Change 15, no. 3 (2015): 314–37, https://doi.org/10.1111/joac.12117.
[6] Marie-Hélène Schwoob, Food Security and the Modernisation Pathway in China — Towards Sustainable Agriculture, ed. Mark Beeson, 1st ed. (Palgrave Macmillan, 2018), https://doi.org/10.1007/978-3-319-65702-8.
[7] Lucy Hornby, “China Land Reform Opens Door to Corporate Farming,” Financial Times, November 3, 2016, https://www.ft.com/content/9d18ee2a-a1a7-11e6-86d5-4e36b35c3550.
[8] Qian Forrest Zhang, Ma Qingguo, and Xu Xu, “Development of Land Rental Markets in Rural Zhejiang: Growth of Off-Farm Jobs and Institution Building,” The China Quarterly 180, no. 175 (2005): 1031–49, https://doi.org/10.1017/s0305741004000748.
[9] Jan Douwe van der Ploeg and Jingzhong Ye, China’s Peasant Agriculture and Rural Society : Changing Paradigms of Farming (Routledge), accessed April 10, 2019, https://www.routledge.com/Chinas-Peasant-Agriculture-and-Rural-Society-Changing-paradigms-of-farming/van-der-Ploeg-Ye/p/book/9781138363977.
[10] F. H. King, Farmers of Forty Centuries :Or, Permanent Agriculture in China, Korea, and Japan / (Emmaus, Pa., 1973), http://hdl.handle.net/2027/mdp.39015066084891.far
[11] Shuji Hisano and Hui Ni, “Development of Contract Farming in Chinese Sericulture and the Silk Industry,” in The Political Economy of Agro-Food Markets in China: The Social Construction of the Markets in an Era of Globalization, 2014, 236–56.
[12] Jing Li et al., “Exploring the Socioeconomic and Ecological Consequences of Cash Crop Cultivation for Policy Implications,” Land Use Policy 76, no. April (July 2018): 46–57, https://doi.org/10.1016/j.landusepol.2018.04.009.
[13] Kaiyu Lyu, Kevin Chen, and Huaizhi Zhang, “Relationship between Land Tenure and Soil Quality: Evidence from China’s Soil Fertility Analysis,” Land Use Policy 80, no. September 2018 (2019): 345–61, https://doi.org/10.1016/j.landusepol.2018.09.002.
[14] Liao Yue, “How Drones Are Luring Young Chinese Back to the Countryside,” Sixth Tone, 2018, http://www.sixthtone.com/news/1002527/how-drones-are-luring-young-chinese-back-to-the-countryside.
[15] Elaine Yau. “China’s PhDs and MBAs Are Giving up City Life for Farming.” South China Morning Post, December 12, 2018, https://www.scmp.com/lifestyle/article/2177377/chinese-phds-and-mbas-give-city-life-farming-driven-desire-improve.
[16] Liangliang Gao, Dingqiang Sun, and Cuiping Ma, “The Impact of Farmland Transfers on Agricultural Investment in China: A Perspective of Transaction Cost Economics,” China and World Economy 27, no. 1 (2019): 93–109, https://doi.org/10.1111/cwe.12269.
