China's Farmers Face Land Risks

China's new rural reform plan does not promise faster income growth for farmers, an RFA analysis shows.
By Michael Lelyveld
2008-10-23
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BOSTON--China's new rural reform plan could slow income growth for millions of farmers and drive them into cities as migrant workers, analysts say, as the government struggles to narrow the gap between rich and poor.

On Oct. 12, leaders of the Communist Party of China (CPC) approved a plan that would allow farmers to lease or sell rights to land they now use, the official Xinhua news agency reported.

The program marks a major change in the "rural contract household responsibility system," crafted by the late CPC General Secretary Deng Xiaoping in 1978. Under the household responsibility system, much of China's agriculture has taken place on small plots that are leased at the village level to farming families under long-term contracts.

In a signed commentary, the official China Daily hailed the "historic importance" of the new land reform. Proponents say that sales of land rights would lead to larger, more efficient farms, boosting crop yields that have been stagnating since 1984.

The sales are also seen as a way to boost farmers' wealth. In announcing its decision, the CPC Central Committee set a goal of doubling the per capita disposable income of rural residents by 2020.

"We hope to lead the countryside (people) to catch up with its neighboring city (residents) and integrate the nation's rural and urban development into one entity," the committee said, as quoted by Xinhua.

Income growth 'unclear'

But it is unclear whether land sales would accelerate income growth for China's 737 million rural dwellers or help them catch up with urban wages.

The CPC target would not provide any faster growth than recent increases. The 2020 growth goal is actually significantly slower than last year's rates.

In 2007, per capita rural disposable income rose 9.5 percent, Xinhua reported. At that rate, rural incomes would triple rather than double by 2020.

The government expects an increase in income of "at least 6 percent" this year, Xinhua said, citing a report issued in March. That 6-percent rate would lead to a doubling of incomes by 2020.

Farmers' net incomes have been growing by at least 6 percent annually since 2004, Xinhua reported in January.

Experts interviewed by RFA said the land reform may not promise farmers any greater income benefit because the plan has other objectives.

Move to the cities

"This is designed to provide incentives for peasants to accelerate the flow to urban areas," said David Bachman, a professor of Chinese politics and foreign policy at University of Washington. "Ultimately, that probably is going to be the process that's going to take place here."

Bachman said that many farmers would reap a one-time benefit by selling their land rights, giving them cash to move to the cities where they may become migrant laborers or start new ventures. Bachman fears that many of the newcomers will fall through the social and economic cracks because they lack needed skills.

"Some are certainly going to get cheated and rooked and otherwise exploited in the transition process," he said.

Bachman also doubts that land sales will do anything to close the gap between farmers and urban residents, since net incomes in cities rose by over 12 percent last year. The income margin between city dwellers and farmers has been widening steadily from 2.5 times in 1978 to 3.3 times last year, according to official statistics.

Instead of closing the gap, the land reform is aimed at boosting farm output to provide more food to cities and help keep rising prices under control, Bachman said. Underscoring that point, the Central Committee issued a policy paper on Oct. 19, calling for "unremitting efforts to guarantee the country's grain security at all times."

"The story is about selling it to the peasants," said Bachman. "The question, though, is how much productivity you can concentrate in the countryside as you concentrate land use rights and you move toward more mechanized agricultural production."

'One-time deal'

Lowell Dittmer, a China expert and political science professor at University of California's Berkeley campus, said farmers may greet the new measure because it appears to give them more freedom and a windfall from land sales.

"They can now sell their land and they can now move to the cities with greater freedom," Dittmer said. "They would take this probably on its face and hope that they could do better. They may not be able to do better."

Many will face disadvantages in the city compared with established residents in competing for a limited number of jobs, Dittmer said.

"There are a lot of strikes against them," said Dittmer. "They may want to come back, but they would be out. It's a one-time deal for their land."

The land transfer plan may create larger, more mechanized holdings for agricultural production, but there is also the risk that it will lead to "landlordism" that takes advantage of landless peasants, said Dittmer.

"China has been plagued with that in the past," he said. "That's a real possibility here."

The CPC Central Committee tried to address concerns about landlordism by pledging "the most stringent farmland protection system" to guard farmers' rights, Xinhua said.


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