Crossing the river by feeling the stones, Experimenting with changing rural land use rights in Chengdu Meine Pieter van Dijk & Laura Kamsma Erasmus and Leiden University in The Netherlands Contribution to the Land & poverty conference Washington: World Bank Version

Land acquisition for urban expansion: current situation & problems Land is a very important tool for both rural (agricultural) and urban development Rapid growing urban population and economic growth result in high demand for land 2025 estimation: 64% of population living in cities Absence of a clear system of transfer rights for rural land has led to a widening urban-rural gap and inefficient land use. Acquisition of too much land for urban purposes: 200,000 ha per year concerning 2 million farmers Farmers do not receive (equal) compensation for their land

Land acquisition for urban expansion: current situation & problems 65% of all registered conflicts concern land disputes such as illegal expropriation and unequal compensation for farmers Rural land  owned by village collectives Urban land  owned by the state Deiniger & Jin: The strict separation between rural and urban land markets with expropriation as the only way of trading between them makes land acquisition inefficient and urbanization unsustainable Expropriation is sometimes done in very unreasonable, non- transparent or even illegal ways, source of weak governance China’s agriculture is inefficient and small-scale due to the small, scattered land plots

Reason for land acquisition: cash strapped local governments are not allowed directly to raise money from capital markets Municipalities generate high revenue by acquiring the land at low cost, and leasing out the acquired land at a higher price ‘face’ (status) is very important, mayors are judged on their ambitious plans Insufficient implementation of policies and control on local level fuels illegal practices Lack of transparency leads to not compensating farmers properly

Possible solutions Changes in rural land-use law create possibility to transfer user rights (policy documents 2008 & 2009) Indefinite length of land-use rights contract will stimulate long-term investment and stimulate trade in land markets More transparent system where compensations and payments are known to everybody Experimenting with land titling in a more participatory approach: experiments in Chengdu

The experiments in Chengdu Chengdu has been selected as a pilot area for the reform of rural property rights Chengdu, with a population of 14 million on 12,310 km2, was named as a pilot area for the comprehensive reform of rural property rights to achieve a balanced Urban-Rural Development in 2008 Since 2008 the local government was able to carry out reforms concerning land rights Deiniger et al and Li 2012 pointed out that Chengdu’s local government implemented three important changes

Important changes in land transfers Focus on systematic participatory land titling & a registration system for all land & buildings Farmers were permitted to trade their village construction land directly to interested parties Villagers were allowed to trade user land rights using a district trading platform, giving Access to market-driven, deliberate land trade system for non-agricultural purpose land Last, villagers were not forced to leave their land behind when leaving the countryside

Implications of Chengdu experiment This meant allowing a more equitable & market driven urban expansion through the Chengdu land tenure experiment (Deininger et al. 2013) & more scope for agricultural upscaling because: 1.Farmers have titles 2.They can transfer these titles 3.The process is more clear & transparent & reversible

Lessons from the Chengdu experience Land titling as a participatory process may work This gave titles to the farmers & a cadastre to the city Trading platform was established to facilitate the transactions Suspending the hukou system provided equal rights to urban and rural inhabitants and made the land market function It made migration of labor (from rural to urban) possible

Conclusions Public inputs in a participation process do not mean all the farmer wishes will be honoured. However, it is important to engage in a dialogue with the public and to convince them of the necessity of certain changes At the same time officials should listen whether the wishes & objections of the residents make sense and could be taken into account and lead to a different approach of the issue There is a need for stronger contract rights to enhance tenure security, a lesson from Chengdu There is a need to streamline administrative procedures & to assure that farmers benefit more from urban land acquisition

Limitations of this paper Based on existing sources Only one city This concerned the prefecture No independent critical assessments available Chinese sources consulted gave no different perspective China is a country with many regional differences, which make generalization dangerous Reforms will lead to variable practices and approaches in different regions and provinces

The Chengdu experiment is of great importance for other Chinese cities Land titling as a participatory process may work if land titling at the grassroots level takes place with the involvement of villagers The process will bring more transparency and information to land markets Stretching the bundle of rights creates more land transfer possibilities and increases the efficiency of the land market There is a need for inspection/control of lower levels of governments by an independent authority taking into account national level standards and specific local circumstances