Only the market can persuade farmers to give up their homesteads.
Recently, Nantong in Jiangsu, Fengyang in Anhui, Ezhou in Hubei and other places have introduced policies to encourage the abandonment and withdrawal of rural homesteads, which has attracted market attention.
China's housing land system was established in the 1950s. Its main features are "collective ownership, member use, one house per household, limited area, free distribution, and long-term use".
Before the reform and opening up, this system was in line with the characteristics of traditional closed villages and dual social security, and played a certain role in ensuring farmers' housing and production needs and rural social stability. However, with the development of the market economy and the advancement of urbanization, the urban-rural dual division system has gradually disintegrated, and the original homestead system has gradually become unsuitable for social and economic development.
At present, with the large-scale migration of people to cities, the "hollowing out" of rural areas is becoming increasingly serious, and many homesteads are idle all year round. Although farmers have the right to use and occupy homesteads, their property rights and income rights are not reflected due to the poor exit channels. Farmers' legal property cannot be circulated and converted into cash, which leads to illegal private transactions that cannot be stopped and causes a large amount of land resources to be wasted.
As the country increasingly emphasizes food security, the agricultural population continues to decline, and agricultural production gradually shifts from scattered operations by individual small farmers to centralized development by large-scale growers, allowing a large number of idle homesteads to be distributed in the fields and cutting the farmland into pieces is obviously not conducive to the integration of land resources and the development of large-scale mechanized operations.
Therefore, as early as 2015, the central government launched three pilot reforms of the rural land system, including the pilot reform of the homestead system, in 33 counties across the country, exploring the establishment of a paid use and withdrawal mechanism for homesteads and delegating the approval authority for homesteads. Since then, the central government has deployed homestead reform in its No. 1 document every year, which shows how much importance it attaches.
Based on the summary of previous pilot practices, the Central Document No. 1 of 2018 further proposed the reform idea of "exploring the 'three-rights separation' of homestead ownership, qualification rights, and use rights", implementing collective ownership of homesteads, protecting the qualification rights of homestead farmers and the property rights of farmers' houses, and moderately liberalizing the use rights of homesteads and farmers' houses.
In 2019, the Central Rural Work Leading Group issued a notice that for rural villagers who move to cities, funds can be raised through multiple channels, and various ways can be explored to encourage them to voluntarily withdraw from their homesteads for a fee.
In 2020, the 14th meeting of the Central Committee for Comprehensively Deepening Reforms reviewed and approved the "Pilot Plan for Deepening the Reform of the Rural Homestead System". Subsequently, 104 counties and three prefecture-level cities across the country launched a new round of pilot reforms of the rural homestead system.
According to the Ministry of Agriculture and Rural Affairs in August 2023, substantial progress has been made in the reform of key links such as the allocation, transfer, withdrawal of homesteads, and the revitalization and utilization of idle homesteads. For example, documents such as the "Notice on Actively and Steadily Carrying out the Revitalization and Utilization of Idle Rural Homesteads and Idle Houses" and the "Notice on Guaranteeing and Regulating the Use of Land for the Integrated Development of the First, Second and Third Industries in Rural Areas" have been issued one after another, and some pilot areas have tried to transfer homesteads through various means such as leasing, equity investment, transfer, and exchange.
The announcement by Nantong, Fengyang, Ezhou and other places to encourage rural residents to give up their homesteads is basically a continuation of the reform ideas in recent years. The reason why it has attracted so much attention and controversy is mainly because this time the local government directly linked the withdrawal of land with the purchase of houses.
For example, Hubei's Ezhou stipulates that if villagers buy newly built commercial housing in the "double-concentrated" area after they withdraw from their homesteads, they will be given housing subsidies based on the area of the withdrawn homesteads. However, Jiangsu's Nantong requires farmers who withdraw from their homesteads to buy houses in the city before they are given subsidies.
Considering the current sluggish real estate market, new homes are seriously unsold - in April, the inventory-to-sales ratios of newly built commercial housing in the first, second, third and fourth tier cities in 100 cities across the country were 20.1 months, 23 months and 34 months, respectively, which were 6.6 months, 13.8 months and 23.5 months longer than the sales cycle in April 2019. This move inevitably gives people more room for imagination.
In addition, the small amount of subsidies given is also a major complaint. For example, Fengyang County, Anhui Province, the birthplace of China's rural reform, only provides a one-time housing purchase reward of 50,000 yuan to farmers who have returned their land, and this is not enjoyed at the same time as monetary, housing voucher resettlement, and housing purchase subsidies. The problem is that 50,000 yuan is difficult to settle down even in a county in northern Anhui like Fengyang.
In fact, although China's urbanization rate has reached 66.16%, the number of permanent rural residents is still as high as 477 million. Some of them are reluctant to leave their hometowns. For these people, the government should respect their choices.
However, a considerable number of people do not want to move to the city, and some have even lived in the city for many years; nor do they not want to live in commercial housing, but they simply do not have the financial means. For these people, it is unrealistic to replicate the poverty alleviation model of contiguous poverty-stricken areas and have the government provide replacement housing entirely. A feasible solution is to maximize the value of land and allow farmers to benefit from the transfer of homesteads.
After all, many idle homesteads may be useless to homeowners who have already moved to the city, but for homestay entrepreneurs, they are the perfect place to display their skills. In this case, handing over the homesteads to the market will generate much more benefits than having them handled by the government.
In 2020, the Ministry of Natural Resources, the Ministry of Housing and Urban-Rural Development, the Supreme People's Court, the Ministry of Agriculture, and the State Administration of Taxation jointly studied and replied to the NPC deputies that the use rights of farmers' homesteads can be inherited by their children with urban household registration and real estate registration can be handled. This year's Central Document No. 1 also proposed to revitalize and utilize idle rural homesteads, idle houses, "four wastelands" and other resource assets to create conditions for increasing farmers' property income through multiple channels.
As for how to revitalize it, the key is to expand the scope of transfer of homestead use rights so that it can be freely transferred between urban and rural areas, thereby maximizing the true value of homesteads and increasing farmers' property income.
In this regard, the practice of encouraging farmers to return their land for housing in Fengyang and other places has caused controversy. The problem lies in the government's one-size-fits-all regulations replacing the market, which greatly reduces the value of the benefits that homesteads can bring to farmers. The key reason for this is that the current channels for the circulation and withdrawal of homesteads are not smooth and the mechanism is unclear. This should be the main focus of the next step of rural reform.
