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China could end state ownership of all farmland

China may look to end its state monopoly on farmland sales and take on staggering rural government debts in a drive to rid the countryside of discontent, a leading Chinese adviser said yesterday.

The office director of the Communist Party's "leading group" for rural policy, Chen Xiwen (陳錫文), said that China's decades-old rule that farmland is collectively owned and only the government can sell it for development will not change any time soon.

But Chen told a news conference that farmers may eventually be allowed to sell land directly, cutting out officials from taking the lion's share of profits from often corrupt land deals -- a problem that has fueled rising rural unrest.

"It's true that the attention of society has been turned toward conflicts arising from the use of farm land for some time now. It's also true that it's currently a factor in bringing about instability in some rural areas," he said.

According to the government's own statistics, more than 200,000 hectares of farmland is turned into factory floors or residential areas every year.

The clashes typically erupt because farmers feel they are not adequately compensated.

"Eventually, we have to propose steadily reforming the land acquisition system itself," he said.

"Here the crux is whether land for development must be all monopolized by the state, so that the state acquires the land and then passes it on to developers."

Any move to lift the current state stranglehold on farmland sales would break with policies the late paramount leader Deng Xiaoping (鄧小平) set in the 1980s allowing farmers to lease land from village "collective" ownership -- effectively state control -- but preventing them from freely selling it.

Chen said that the government would move carefully on land reform.

"If it went out of control, there would be major losses of China's precious land resources," Chen said.

Chen advises Premier Wen Jiabao (溫家寶) and other top party officials on rural policy, and helped draft China's ambitious plan to build a "new socialist countryside" and narrow the stark gaps in income, health and schooling that have divided urban and rural citizens.

Last year, rural residents earned an average 3,255 yuan (US$400) each in annual income, while urban residents earned an average 10,493 yuan, Chen noted.

Reducing that still widening gap would be a "long process, but the gravity of the problem has attracted serious attention from all sides," he said.

Clearing away mounting rural government debts and directing more government revenues and bank loans to farmers would be "crucial" to the government's plans, he said.

In the late 1990s, those debts reached 360 billion yuan (US$44.7 billion), as local officials rushed to increase staff and build showcase projects, Chen said.

"Financial support for agriculture is crucial, and at present it appears to be clearly insufficient," Chen said.

He added that the government would embark on a nationwide audit of rural government debts and then decide how to deal with them.
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