The impact of land transfer on peasant stratification_An analysis based on a survey of Jingshan_图文




China Economist November - December 2009

The impact of land transfer on peasant stratication -An analysis based on a survey of Jingshan county,
Hubei province
CHEN Baifeng (陈柏峰)
School of Law, Zhongnan University of Economics and Law; Research Center for Rural China Governance, Huazhong University of Science and Technology

Peasants’ motivation and purpose for transferring land vary from time to time. Based on a survey of 10 villages in Jingshan county, Hubei province, this article nds that the specic forms of rural land transfer include active longterm transfer, passive long-term transfer and short-term transfer. Land transfer has an important impact on the stratication of the peasantry. Present institutional arrangements for land ignore the legitimate interests of migrant families and poor and weak villagers and therefore they hold different attitudes toward land tenure institutions than middle peasants do. Based on the conclusions of an empirical analysis, this article puts forward a series of policy recommendations aimed at protecting the land rights of poor and weak peasant households.

Key words:
land transfer, stratum, peasant stratication, land tenure institutions

Land transfer is the focus of current debates on the institutional change of land. Many scholars have conducted research on the forms, causes and implications of land transfer and have come up with measures and countermeasures to standardize the transfer of land. Special attention has been paid to the role of land transfer in agrarian restructuring, industrialization, moderate-scale operation, rural labor transfer and peasant income enhancement. However, such studies rarely involve land’s impact on changes in the hierarchical structure of current rural China. Chen Chengwen and Luo Zhongyong (2006) focus on dissecting the overall rural structure and examining the role of land transfer in reconstructing the rural social structure. Some scholars argue that deregulating the transfer of land will lead to polarization among

the peasantry (Wen Tiejun, 2008; Li Changping, 2008), but such an argument is merely a macrojudgment without factual support at the micro level. China is a huge country with uneven development in rural areas; peasant stratification is anything but a strange phenomenon. Therefore, we shall pay more attention to observing the stratication of the peasantry at the micro level. In classical Marxist theory, the institutional conditions of land are an important basis of class and stratification. In the 1930s, Chen Hansheng, et al, proceeded with an observation of the land tenure institutions and scientifically substantiated the feudal factor-driven class relations in rural China and the semi-colonial and semi-feudal nature of rural Chinese society. In times of revolution, Mao Zedong (1982, 1991) also singled out the institutional

conditions of land as an important basis of class and stratification. He played a crucial role in understanding Chinese class conditions at that time and justifying the necessity of launching a land revolution. After land reform was launched in the People's Republic of China, land no longer exerted a significant impact on rural class stratication and hence scholars discussed the rural class structure mainly based on occupational stratification (Lu Xueyi, 2002). After the agricultural tax was abolished, farming generated a handsome income for peasants and the impact of land transfer on rural social stratification and peasant stratification became increasingly pronounced. In September 2008, we conducted a survey of 10 villages in two township jurisdictions of Jingshan county, Hubei province. Based on the qualitative interview and quantitative statistics, this article

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attempts to discuss the impact of land transfer on the stratification of the peasantry.

I.The complex reality of land transfer

After introducing the household contract responsibility system, the ruling Communist Party and government have enacted a series of policies aimed at permitting and encouraging the transfer of land use rights within the term of contract while stabilizing rural land contract relations. The central government has always intended to realize the transfer of land tenure rights according to law and on a voluntary and compensatory basis and to effectively protect the rights and interests of peasants. The reality is, however, very complicated. The motivation, purpose and method of rural land transfer vary from time to time. The actual conditions also vary across rural China. In Jingshan county, land transfer has gone through three different stages: The first stage began in the 1980s. During this period, peasants transferred land before seeking jobs or doing business in cities. The transition to a market economy started early in Jingshan and as a result, land transfer took place earlier here than elsewhere in rural areas of central and western China. The second stage started in the late 1980s. At this stage, peasants' burden became increasingly cumbersome. Many peasants were unable to bear the burden of the new levies and as a result, they had no alternative but to transfer or abandon their farmland and search for jobs in urban areas. The abandoned land was transferred under the stewardship of village collectives or committees. This was a prevalent phenomenon during the period from the 1990s until 2004, the year in which the agricultural tax was repealed. The third stage began in 2004. After abolishing the agricultural tax

in 2004, the state no longer levied fees on peasants and instead offered them various subsidies. Farming gradually became lucrative and the onceabandoned land suddenly became sought-after. In addition, there were dramatic changes in the mode and state of land transfer. On one hand, peasants were less willing to transfer land, and the proportion of land transferred was in decline. On the other hand, some peasant households had to transfer their land because its size was too small to be protable. In the face of different situations, peasants transferred their land in one of the three modes:

house with a tile roof in a town and makes a living by selling bean curd; the other makes a living by working in a barber shop. When a peasant household actively transfers its land for a long period of time, the transferee is naturally entitled to acquire the land for the mutually agreed-upon period of time.

2. Passive long-term land transfer
Peasant burden became increasingly heavy from the late 1980s to 2003, when the reform of the tax and fee system was launched. Because grain prices were in decline and peasants lost money tilling the land, many of them transferred their land with little consideration. Sometimes the transferor even had to offer a subsidy of up to 300 yuan/mu to the transferee. Since taxes and fees were levied on land, abandoning land meant leaving taxes and fees up in the air. Grassroots-level governments forbade peasants from abandoning their land and forced them to pay taxes and fees even if their land was untilled. This is what Li Changping (2002) called “farmers have to till their land against (their) will when they actually wish to abandon it.” In this situation, some peasant households transferred their houses and land together to nonnative immigrants from mountainous areas; some peasant households tried every means to move their registered permanent residence elsewhere and even ended up becoming unregistered residents. Still more peasant households preferred to just leave their land behind and go work and do business elsewhere. Consequently, a vast expanse of land was abandoned in rural areas. Some villagers asked their neighbors to care for the land, but the land changed hands soon after or was abandoned anyway. When villagers abandoned their land and went to work elsewhere, the township and village governments could not expect to collect taxes and fees on the

1. Active long-term land transfer
Active long-term land transfer is when peasants choose to abandon contracted land in their home villages after settling down in urban areas, or actively seek to transfer the contracted land because they expect to settle down in urban areas. This form of land transfer existed from the 1980s onward and after the agricultural tax was repealed. Among the 60 villagers who transferred a large area of land in Caozhengong village, Jingshan county, 13 farmers transferred their land under this method. Six of the 13 farmers went to cities without their spouses or became non-farmers (private school teachers or temporary workers turned into full-time workers). The six villagers transferred their land in a foolproof way, and they now are living a decent life. The other seven villagers abandoned their land due to an optimistic judgment in their ability to work and live in urban areas. Six of those seven villagers are making a living in urban areas, and one returned to the countryside and bought a house and a plot of land in a village in an adjacent township. Among the six villagers settling down in urban areas, four villagers live an afuent life and two are neither rich nor poor. Of the latter two villagers, one has bought a



China Economist November - December 2009

land, and as a result had to transfer the abandoned land by every means possible. The modes of land transfer conceived at township and village levels include “one land plot per household” contract, low-price contract and change of land use. “One land plot per household” contract means that in order to resolve land cultivation and irrigation issues, the village collective or committee reallocated land and concentrated the land contracted to each peasant household in one single plot of land to facilitate construction of small water conservancy facilities (He Xuefeng et al, 2003), thus making it more attractive for peasants to take over the contracted land. Low-price contract occurred when the village collective or committee transferred the abandoned land at a price lower than the regular tax and fee burden. In this situation, village cadres often hold an attitude of “collecting a penny of tax and fee is better than collecting nothing.” Change of land use means changing the farmland use to attract villagers to contract it. For instance, hillside land can be contracted to grow hybrid poplars; low-lying wetland can be used to dig a pond and raise fish. Under the orchestration of village collectives and with every endeavor of village cadres, the peasants who abandoned their land were able to transfer the land to those who are willing to acquire it. When the rst-round land contract expired in 1997, the central government required each province to conduct a second round of land contracting. Peasants were not enthusiastic about the second-round contract because the farm tax and fee burden was too heavy, and consequently, the cadres of many local areas, including those of Jingshan county, had no alternative but to make the second-round contract a mere formality. After the agricultural tax was repealed in 2004, farming became lucrative and many villagers returned

home and asked for land, thereby unleashing a series of disagreements with the villagers who had stayed in the farmland. The peasants who returned home were lawfully entitled to the farmland contracting rights, but the peasant households who stayed in the farmland had entered into contracts with village committees. The two parties struggled in disagreement against each other, and the township and village cadres could not think of an effective way to overcome the impasse. In this situation, Hubei province issued Opinions on Improving the Second Round of Rural Land Contracting in November 2004 to “reconfirm land rights” in rural areas. This policy document made it possible to solve land disputes through compromise by adopting flexible measures under the condition of preserving the current status of land tenure without breaking the law. In practice, the Jingshan county government handled land disputes by confirming land rights based on the existing land tenure institutions, requiring large farm households to give up a small piece of land (2 mu) to peasant households who had abandoned their land before the agricultural tax was abolished. Disputes were very acute at that time, and township cadres stayed in villages to handle the land issues. Even so, there were still 29 groups of Cao township villagers lodging petitions in 2005. Today some villagers who have received confirmation of their land rights from the government are still unable to get their land. In consequence, the villagers who did not promptly return home and ask for their land in 2005 are forced to relinquish all of their land for a long period of time; those who promptly returned home and asked for land are also forced to relinquish a large proportion of land for a long period (2 mu of land per person or 10 mu per household in Jingshan county).

Among the 60 households in Gongcun village that transferred their land, 47 households fall under this category. Now 24 of the 47 households have become “landless peasants” in nonsuburban areas and three have become permanently “landless peasants” because they sold their house and land together to non-native immigrants, thus losing eligibility for conrmation of land rights. The other 23 households have received 2 mu of subsistence land. By contrast, the peasants who acquired land through land transfer are unexpectedly entitled to long-term land contracting rights due to policy and circumstance change.

3. Short-term land transfer
This is a prevalent land transfer method adopted by peasant households due to their expectation on longterm land possession and a sense of insecurity for other methods of making a living. In the rural areas of Jingshan, short-term land transfer is currently adopted by most peasant households that acquired 2 mu of subsistence land through the conrmation of land rights in 2005. In Production Team 1 of Gongcun village, there are 18 peasant households with contracted land at the present time: Only 10 households till the land at home, while the other eight households have only 2 mu of farmland each. These families transferred their land for a short period of time and moved elsewhere to nd employment. In Production Team 3 of the village, there are 25 peasant households, of which 12 households moved their families elsewhere. Now five of the 12 households have transferred their subsistence land under the short-term scheme, but the other seven households are without any subsistence land. Most of the peasant households that moved elsewhere had left their home villages before the agricultural tax was repealed and transferred land in a passive way. Now a large proportion of them have

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stronger demand for land and choose not to transfer it for a long period of time because they are likely to return home to the land in the future. By contrast, the peasants who acquired land through short-term land transfer are thus entitled to short-term land contracting rights.

II. Land tenure status and peasant stratication

peasantry at the village level based on the detailed data about the economic and employment conditions of registered permanent residents in three villages. Roughly, Jingshan peasants can be aggregated into five strata: migrant businessman stratum, peasant worker stratum, part-time peasant worker stratum, migrant family stratum and poor villager stratum, as shown in the table below:

The foregoing analysis has revealed the existence of a number of different land transfer methods. This phenomenon is related to the policies concerning agriculture, rural areas and farmers in different periods, and to the different conditions of peasants in different periods. In different periods and circumstances, peasants have adopted different land transfer methods. At present, land transfer has a significant impact on the wellbeing of peasants. In Jingshan, the villages are under greater exposure or openness. Some leave home from time to time as a result of urbanization. Non-native villagers can settle down in the villages by acquiring land through land transfer. In this article, we will also analyze the stratification of the

1. The migrant businessman stratum
This stratum refers to the upper stratum of peasants who have long been doing business elsewhere with almost no present dependence on rural land. They are completely dissociated with the villages in which they are registered as permanent residents. In the three villages, 10.4% of households fall under this stratum. On average, a migrant businessman earns an annual income of over RMB 30,000 and has a bank deposit of at least RMB 100,000. In Gongcun village, the two wealthiest businessmen should each have a bank deposit of RMB 1 million. Among the 15 migrant businessmen, 13 of them have houses in urban

areas, six of them have bought or built houses in townships, and seven of them have bought houses in county towns or cities. In addition, some of them also keep houses in the village that are now solely the residence of elderly family members. Even though migrant businessmen are classified in the upper stratum of villagers, the vast majority of them have become “urbanized,” and the most successful businessmen can move to large cities. However, there are also a small number of businessmen who have met obstacles in the urbanization process and have returned to their home villages. Deng Deyi, a farmer in Gongcun village, went to Wuhan, capital of Hubei province, to sell rice in the 1990s but returned home in the face of tough business conditions. Returnees’ economic well-being is still in good condition because of money they earned and saved while working in urban areas. After the agricultural tax was abolished, the land interest structure has become more rigid, thus making it impossible for migrant businessmen to return to their home villages. Deng, 60, moved to a town to do business in the 1990s and cancelled

Table 1: The stratication of the peasantry in the three villages
Villages Number of household/ population Migrant businessman stratum A household does not have land and earns an annual income of RMB 30,000 or more Gongcun village Shacun village Gucun village Total 131 households (510 persons) 398 households (1,648 persons) 308 households (1,192 persons) 837 households (3,350 persons) 15 households 11.5% 99 households 11.6% 62 households 8.4% 193 households 10.4% Peasant worker stratum A household has 10-plus mu of land and earns an annual income of RMB 30,000 32 households 24.4% 205 households 24.9% 140 households 20.1% 388 households 23.1% Part-time peasant worker stratum A household has 10-plus mu of land and earns an annual income of RMB 20,000-30,000 43 households 32.8% 16 households 51.5% 47 households 45.5% 90 households 46.4% Migrant family stratum A household has 2 mu of land and earns an annual income of approximately RMB 20,000 27 households 20.6% 29 households 4.0% 33 households 15.3% 74 households 10.7% Poor villager stratum A household has 2 mu of land and earns an annual income of less than RMB 10,000 12 households 9.2% 3 households 7.3% 0 10.7% 5 households 8.8% 0.6% 0 0.7% Others

Large farm households and “spouseseparated households” 2 households 1.5%

(Source: Prepared by authors and village cadres during a qualitative interview)



China Economist November - December 2009

his registered permanent residence in the village but failed to qualify for permanent resident status in the town. At the time of “confirmation of land rights,” he failed to acquire any contracted land due to his lack of registered permanent residence. Now he earns a meager income and wishes to return to his home village but cannot because he has no land there. Generally speaking, most of the migrant businessmen in this stratum earn high income and do not care about land at all.

has evolved into a new pattern of supplementing migrant work with farming activity. Peasant workers give precedence to the worker side of the equation because farming income is something that has long been taken for granted.

3. The part-time peasant worker stratum
The part-time peasant worker stratum refers to the stratum of “middle peasants” who supplement farming income with income earned by working part-time in county seats and townships. Middle peasants are heavily dependent on rural land. Middle peasant is a benchmark on which villagers compete cosmetically with one another and try to “keep up with the Joneses,” and it also is a goal pursued by poor and weak peasant households. In the three villages, 46.4% of peasant households fall under this stratum. In Jingshan, a part-time peasant worker has 10-plus mu of land and earns an annual income of about RMB 20,000-30,000, including over RMB 10,000 earned as a farmer and RMB 10,000-20,000 earned as a worker. Those who fall under this stratum migrate frequently between urban and rural areas. Working in urban areas will not change their basic way of living but serves only as a means to make more money. Unlike peasant workers focusing on the migrant working economy, part-time peasant workers would rather concentrate on agricultural production and they are psychologically conservative. In their minds, they hope to expand land operation; in action, they shrink with cowardice. They intend to acquire short-term land tenure through short-term land transfer, but it is very difficult for them to acquire longterm land tenure through active longterm land transfer. During our survey interview, the part-time peasant workers were overtly envious of landlords who own 10-plus mu of land

2. The peasant worker stratum
The peasant worker derives the name from his/her dual identity of working partly as a peasant and partly as a worker. This stratum refers to the affluent stratum of villagers who till the land at home in farming seasons and work elsewhere in non-farming seasons. Peasant workers still have some dependence on rural land. In the three villages, 23.1% of peasant households fall under this stratum. On average, a peasant worker has 10-plus mu of land and earns an annual income of about RMB 30,000, including RMB 10,000 earned as a farmer and RMB 20,000 earned as a worker. The peasant worker status has been realized under the “incomplete family model” concocted by Lu Dewen (2008). Under the steady state of this model, young couples go together to work in urban areas, while the elderly stay home to care for children and continue to till the land. In Jingshan county, it is common for people over 70 years of age to till the land or help their children till the land. In a migrant working economy, working in cities is more important than tilling the land in the countryside. The genderbased division of labor characterized b y “ m a l e b r e a d w i n n e r, f e m a l e housewife” has now become the intergenerational division of labor and relay characterized by “young breadwinner, elderly housewifery.” In fact, this

in adjacent villages and hoped to have more land themselves. Theoretically if they wished, they could become landlords by buying the houses and land of peasants who have moved to cities. In 2008, the total price of a twostory four-bedroom brick and concrete mixed structure house plus 9 mu of land was only RMB 21,000. Although the part-time peasant workers are nancially able to buy the houses and land, few take concrete action to make their landlord dreams come true. The houses and land of peasants who have moved to cities are often bought by non-native peasant households from mountainous areas. Part-time peasant workers are more inclined to acquire a small area of land (say, 1 or 2 mu) from a migrant family through short-term land transfer.

4. The migrant family stratum
This migrant family stratum refers to the stratum of rural households that are mainly engaged in migrant employment and not dependent on rural land. They are like nomads, roaming outside of their home villages and returning once a year during Spring Festival. Some migrant families have even chosen to buy houses in urban areas; as a result, they are completely disengaged from the countryside and agriculture except for the fact they are still registered as permanent residents in their home villages. In the three villages, 10.8% of the peasant households fall under this stratum. In Jingshan, a migrant family usually has 2 mu of subsistence land acquired through confirmation of land rights in 2005, but some families are even deprived of subsistence land, making it neither realistic nor economical to till the land at home. More often than not, they choose to transfer the land and move their families elsewhere to find employment. On average, a migrant family earns an annual income of about RMB 20,000 by working in urban areas. Some peasant households

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may also choose to move their families elsewhere even though they have 10 mu of farmland. This happens when a better opportunity arises that allows them to earn an annual income of over RMB 20,000. Migrant families have special demand for land in the sense that they hope to reallocate and reacquire land through confirmation of land rights, then transfer it and continue to work in urban areas. Migrant families are usually peasant households that had abandoned the land before the agricultural tax was repealed. At that time, they passively transferred the land under the longterm transfer scheme and became the “landless peasants” in non-suburban areas. They are full of anxiety over the future because no matter how much money they earn, they still lack a sense of security. They are deeply worried about the loss of the ability to work and make a living when they get old or ill. They are an underprivileged group in the villages. As they have been working away from home year in and year out, it is very difcult for them to effectively express their interests in and opinions of land. When the “confirmation of land rights” was conducted in 2005, they rushed back to their home villages to claim land title but ended up being easily defeated and eventually acquired only 2 mu of subsistence land.

5. The poor villager stratum
The poor and weak peasant stratum is the bottom stratum in the village. This stratum is subdivided into two subclasses: 1) peasant households that become impoverished due to illness; 2) peasant households that have a small piece of land but cannot work away from home. These two subclasses are the poorest peasant households in the villages. Poor and weak peasants are mainly engaged in agricultural production and heavily dependent on farmland. They cannot work away from home due to a shortage of hands. Poor and weak peasants fall under the

“poor peasant” stratum in the villages. The part-time peasant worker stratum serves as a yardstick of comparison and a goal of pursuit for poor and weak peasants. In the three villages, 8.8% of the peasant households fall under this stratum. A peasant who becomes impoverished due to illness can still earn an annual income of up to RMB 10,000 if he has 10-plus mu of land, and he will not be the poorest person in the village. If he does not have a large piece of farmland, however, he likely will become the poorest person in the village. Peasant households with 2 mu of subsistence land will become poor if they are unable to work away from home due to conditional constraints or to earn extra income by doing sideline business. Conditional constraints arise when there are children who need to be cared for or when the elderly are in poor health or deceased, thus making it impossible to maintain the peasant worker structure or part-time peasant worker structure under the “incomplete family” model. Gong Erping of Gongcun village fits neatly into this description. His wife died of cancer last year, and now he cultivates 5 mu of land while raising a child who is studying in a senior high school. During his interview, he said he is deeply worried about his poverty status but feels utterly hopeless as to how to escape poverty. Peasant strata may change as circumstances change. The economic pattern of the peasant worker stratum needs to be supported by the incomplete family model. In the absence of such support (say, the peasant’s parents lost land-tilling capacity), they would be no longer eligible for the part-time peasant worker stratum and may fall into the migrant family stratum. In the event of failing to maintain the peasant worker's production method, the vast majority of peasants will choose to move their families elsewhere, transfer their land and give up agricultural

income except in special cases where there are children who need cared for. In the rural areas of Jingshan, land tenure conditions have more important impacts on the stratication of the peasantry. While some peasants can enter urban areas through their own efforts, other peasants may fall into the poor villager stratum due to illness or other reasons. Generally speaking, land tenure conditions are closely related to the stratification of the peasantry. Some peasant households may willingly relinquish their land titles after making a rational consideration. However, the current land tenure conditions are caused by policy factors such as the imposition of agricultural taxes and fees, the abolition of the agricultural tax and the confirmation of land rights. The land tenure condition has to a large extent determined the stratum under which peasants fall. A peasant household that occupies more land can easily qualify for the peasant worker stratum or parttime peasant worker stratum and enter the middle stratum in the villages; a peasant household that occupies less land can only enter the migrant family stratum in the best-case scenario and may even fall into the poor villager stratum in the worst-case scenario. There are only a small number of peasant households whose stratum is not related to land tenure, and these are the people who can succeed through their own effort alone.

Different strata of peasants hold starkly different attitudes toward land. Peasant households that can successfully enter cities are mainly concentrated in the migrant businessman stratum. They are the most successful among the rural laborers working and doing business in urban areas. It is fair to say that the number of rural laborers who

III. Attitudes of different stratum peasants toward land tenure institutions



China Economist November - December 2009

can successfully enter urban areas is not small. In fact, this cohort of rural laborers accounts for 10.4% of the rural population. Most of them choose to transfer their rural land on a voluntary basis under the long-term transfer scheme, and their actions turn out to be successful. In the migrant businessman stratum, there is also a small number of successful businessmen who actively transferred their land under the long-term scheme but whose land transfer strategy turned out unsuccessful. Now they have to find a new way to get back to their home villages. Generally speaking, migrant businessmen do not care about land tenure. In fact, only a few of the migrant businessmen who cannot secure a foothold in urban areas will have new demand for land. Peasant workers and part-time peasant workers are the amphibians in urban and rural areas. The distinction between the two strata of the peasantry is that the peasant worker stratum arranges production with a focus on urban areas and realizes production under the “incomplete family” model; the part-time peasant worker stratum arranges production with a focus on rural areas and realizes production by working partly as a peasant and partly as a worker. A large proportion of their wealth is attributed to land, and they are a vested interest group of the current land tenure system. In the face of heavy agricultural burden prior to the abolition of the agricultural tax, they did not relinquish the land or retook the land shortly after giving it up. Neither the second round of land contracting nor the confirmation of land rights caused them to passively transfer the land for a long period of time. Unexpectedly, they ended up acquiring the long-term land tenure. These rural laborers are satised with their land status and are supportive of the existing land policy. These two strata of peasants account for 70.1% of the rural population and constitute a

middle stratum in rural areas. It is due to the existence of such a large middle stratum that peasant dissatisfaction with land tenure is not very pronounced even in the presence of a very unequal land tenure institution. On surface, migrant families are no longer connected to rural areas, but in fact, they must rely on rural areas to arrange their lives. They work in urban areas but live in rural areas. Labor reproduction is also carried out in rural areas. They import resources to rural areas by exporting labor to urban areas (He Xuefeng, 2007: 9). Migrant families wish to live in urban areas, but they are unable to establish a foothold there. This stratum of peasants does not necessarily love land but needs it. The peasants need land but do not need to make ends meet on it. They need land because they feel insecure about living in urban areas. A proportion of people in this stratum chose to sell their land and go to cities, but the vast majority of migrant families were forced to transfer the land under the long-term transfer scheme when the tax and fee burden was excessively heavy. When migrant families want to get back to rural areas in the event of a family condition change (such as aging) or

economic environment change (such as the ongoing economic depression), they find all routes of retreat have been cut off. The current institutional arrangements for land have apparently impeded the freedom of migration between urban and rural areas. The poor villager stratum is the bottom stratum in the villages. Poor villagers cannot leave the villages. They are making a living in agriculture but are often beset by the lack of land and thus have an urgent demand for land. Peasant households that have fallen into poverty due to illness nd it very difficult to get out of poverty over a short time period; peasant households who do not have a sufficient amount of land and cannot work away from home find a likely path to escape poverty by doing sideline business. However, their plight will worsen in the event of sideline business failure. Gong Sanping of Gongcun village went to work in urban areas when he was in good health. Now he has returned home due to poor health, but he has only 2 mu of land given to him by his brother. To catch up with the middle peasant stratum of his village, he turned the plot of land into a duck farm, but in 2007, the duck

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business turned sour and he lost tens of thousands of yuan from his venture. We cannot rule out the possibility that such a venture might otherwise have become a success story, but the point is that poor peasant households cannot afford to fail. Once failed, it is virtually impossible for them turn around, and this is why poor villagers have an urgent demand for land: They hope to get out of poverty by acquiring more land. However, they do not have enough money to acquire longterm land tenure through purchase of housing property, and they do not have the strong social connections required to acquire a sufcient amount of land through short-term land transfer. Those in both the migrant family stratum and the poor villager stratum are deeply worried about their lives. The former worries about the future, whereas the latter worries about the present. Both want to change the existing land tenure institutions, though in different directions. The migrant family stratum considers the existing land tenure pattern inequitable and hopes to reallocate land per head through confirmation of land rights. After acquiring land tenure, they intend to transfer it immediately in exchange for an assurance for the future. By contrast, poor villagers wish to reinstate the land tenure institution prevailing in the early 1980s and hope to get as much land as the middle peasant stratum of the village to live a decent life as middle peasants. Actually, the different strata of the peasantry in the rural areas of central and western China also hold different attitudes toward the existing land tenure institutions. When we redesign the land tenure system, we cannot simply say that the purpose of the land tenure system is to protect the interests of peasants. Instead, we shall examine which stratum’s interests have been protected and which stratum’s interests have not. It is fair to say that the existing institutional

arrangements for land are very forceful in protecting the interests of the middle peasant stratum but not as effective in protecting the interests of the poor villager stratum, the interests of the migrant businessman stratum in the event of business failure or the assurance of freedom of migration for the migrant family stratum in the event of family condition change or economic environment change. From the perspective of ensuring universal equality among peasants and reducing agricultural production costs, some scholars advocate adopting a farmland contracting rights system to protect the creditor’s rights associated with the peasant’s land contracting rights based on the collective ownership system prevailing in the first round of land contracting (Chen Baifeng, 2006). This implies that a peasant’s land contracting rights are clearly linked to the peasant’s registered permanent residence and family size. In the event of change in the family size due to birth, marriage, old age, illness or death, land shall be adjusted accordingly; the village collective or committee shall have greater land allocation power, and the villager’s land contracting rights are more equalized. In spite of its conformity with the principle of equality among peasants, this system is very costly to operate. Frequent land adjustment requires a lot of time and effort from township and village cadres and peasants, and unleashes a series of contradictions. The grassroots-level government also needs to spend a lot of time and energy mediating disputes, and land adjustment may present an institutional opportunity for village cadres to commit corruption. In the second round of land contracting, the rural land tenure system has gradually become a farmland contracting rights system to protect the property rights associated with the peasant’s land contracting rights based on the collective ownership system. The Land Administration Law and Rural Land

Contract Law contain provisions for “giving peasants long-term and wellprotected farmland use rights” and “leaving the area of land contracted to each household unchanged regardless of household size change due to birth or death.” As alluded to earlier, this system can protect the interests of the middle peasant stratum but cannot equally protect the interests of all peasant strata. It is fair to say that the existing institutional arrangements for farmland are a product of compromise. In respect to social effects, a proportion of peasants have raised doubt over the legitimacy of such arrangements. A small number of unsuccessful people in the migrant businessman stratum and the migrant family stratum are asking for change to assure freedom of migration between urban and rural areas. The poor villager stratum also demands institutional reform to ensure equality among all strata of the peasantry. The outcry for reform is rising amid the current macroeconomic slump. However, the outcry shall not be overstated because the problems involved are not very severe and the group of people affected (less than 20% of peasant households) is not pervasive enough to warrant sweeping reform.

Some scholars have recently put forward radical recommendations for continuing to weaken the foundation of collective ownership of rural land, extending the term of land contract to 70 years, speeding up the transfer of land contracting rights and homestead use rights, and allowing land contracting rights and homestead use rights to be used as collateral to secure loans. They have even made policy recommendations for privatization or privatization in disguise (Li Yining, 2008; Dang Guoying, 2008). If such recommendation is codified into

IV. Policy opinions and recommendations



China Economist November - December 2009

policy and law, it will likely cause unfavorable consequences. In respect to the impact of land transfer on peasant stratication, the peasants do not have long-term expectations and some even fail to predict change in their life cycle when they transfer the land. More often than not, they are overly optimistic about the prospect of working and doing business in urban areas. Admittedly, many people can successfully realize urbanization, but this cohort of peasants as a percentage of the total population is very small. Today they are experiencing the adverse consequences of past “rationality.” Under the present land policy, they have lost the freedom of migration from urban areas back to their home rural areas. In the event of land privatization or privatization in disguise, the number of peasants deprived of the freedom of migration will grow, which will ultimately lead to dire consequences. Worse yet, we would likely see urban “slums” sprouting as expected by some scholars (Wen Tiejun, 2008; Li Changping, 2008). Under the current institutional arrangements for land, those in the poor villager stratum nd it difcult to move up the social ladder. In fact, they have an urgent demand for land. In the event of launching reform as suggested by these pundits, the number of peasants failing to move up the social ladder will rise sharply. Unless the government offers an enormous amount of subsidies for poor villagers, it will be very difcult for them to realize their middle peasant

dream. In this case, the ruling party and government’s commitment on “common afuence” will likely come to naught and the legitimacy of their governance will diminish. Compared with the radical land reform recommendations, the current land tenure institutions are robust institutional arrangements. The stratification resulting from the property rights-based land contracting rights system and the demand of different strata for land will not lead to severe social consequences at the present time. Whether they will lead to severe social consequences in the future depends on China’s macroeconomic development. In the event of strong macroeconomic development, the existing small problems will be solved over time; in the event of macroeconomic setbacks, there will naturally be more migrant businessmen and migrant families returning to their home villages. In this case, they will claim land tenure rights and seek freedom of migration. At present, the prevalent expectation of peasants is that the land tenure pattern will be adjusted after the second-round 30-year contract expires. In fact, whether the land tenure pattern needs to be adjusted and how it will be adjusted depends on China's overall development situation. Once land is privatized per se or in disguise, government authorities and villages will not have sufficient power to control the land tenure institutions for a long time. This has a direct bearing on whether the Communist Party of

China can truly lead the different strata of peasants to move toward “common afuence.” Based on the institutional conditions for land tenure and the reality of stratication, we are now in a position to put forward two policy recommendations: First, we should stick firmly to the existing robust institutional arrangements for land tenure. This is exactly what the central government is doing now, and it determines whether the central government will have the power and legitimacy to adjust the stratification of the peasantry based on macroeconomic conditions 10 years from now. Second, we should take appropriate action to assure the land rights of poor and weak peasant households. At present, some township governments and villages have micro-adjusted the land tenure pattern and received sound social effects. One method is to let large farm households give a proportion of land to poor and weak peasants through mutual consultation among all stakeholders. In addition, we may consider giving local governments and village collectives the preferential right of refusal to buy land in the land transfer market and allow local governments or village collectives to use a proportion of poverty relief funds to acquire farmland contracting rights in the land transfer market and allocate them to poor and weak peasant households under the poverty relief method. This is probably a viable method.


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