In China, it is illegal for a citizen to either buy or sell farmland. Instead, “village collectives” own the farmland, and these collectives are comprised of local Communist Party representatives. However, since 1984 farmers “have been allowed to lease or transfer their right to farm a piece of land [.]” In 2002 legislation was passed to encourage this practice to raise rural incomes and battle poverty in this largely rural, agrarian nation.Andrew Baston of the Wall Street Journal reports that a new survey conducted by the Rural Development Institute (RDI) shows that farmers are trying to take advantage of the law and are now getting higher rent for land, and they are able to sign contracts covering a longer time period than was previously done. Baston writes that this development could increase both farm incomes and productivity.
RDI is a Seattle, Washington-based non-profit that conducts “independent surveys of farmers in China since 1999 [.]” For their most recent survey the organization interviewed 1,870 farmers in 17 provinces through mid-2008.
The survey showed that the median annual rent for farmland increased to $267 an acre in 2008, whereas in a 2005 survey the median annual rent was $125 an acre. “That’s comparable to the rents paid for irrigated cropland on the U.S. West Coast.” RDI attributes the increase to the overall rise in global prices for farm produce, as well as “the increasing perception that a farmer’s land rights are solid and therefore valuable.” In 2001 land transfers for more than three years on accounted for 6 percent of all transfers, whereas now that number is 15 percent.
According to Roy Prosterman, founder of RDI, ‘“If you can enforce farmers’ long-term rights, this is a tremendous element of what’s needed to jump-start the world economy [.]”’ Based on RDI numbers, a market for farmland would help farmers pull income out the “combined market value of all China’s farmland [which] could be around $1.2 trillion.” Currently, 15 percent of the farmers surveyed are, in some manner, transferring their land. According to Baston’s article, the majority of rural households now have a way of deriving income from the land without having to work every acre they have.
At least one farmer sees the benefit of having options on what to do with the land: ‘"By renting out our land, we have more options: We can go to factories to work, or work in a field planted by someone else,’ says Zhang Deping, a 48-year-old farmer in the village of Shaban in Fujian province. He rents out his family's plot from September to March each year, and grows rice for himself the rest of the year. ‘It's really a good deal to rent out the land for half of each year,’ Mr. Zhang said, since he gets the rent on top of the wages he makes working for someone else. ‘We can make more money than planting on our own.”’
To read the Wall Street Journal article click here.
To learn more about RDI, click here to visit their website.
Posted: 09/16/09
