BEIJING - China's National People's Congress has announced plans of "epoch-making significance" to reduce the burden on the rural population as the key to easing social tensions. But one potentially significant measure in improving the lot of rural residents - land rights reform - was shelved from the agenda of the national legislature.
This often talked about and always deferred rural reform, however, is the real test of the government's commitment to helping the rural poor, experts say. "Unless farmers are empowered to be the masters of their own domain, they will continue to be bullied by local governments and business interests - and become even more a destabilizing force," said economist Xu Sitao, who advises the Economist Intelligence Unit Corporate Network in Hong Kong.
Currently, farmers can only lease land for 25-30 years and cannot use it as collateral to borrow and invest in agricultural improvements that raise productivity.
"The next stage of rural reform must allow farmers to extend their land leases as an intermediate step towards outright privatization or broaden the use of land to some non-farming, more lucrative activities," Xu said.
During this month's session, Premier Wen Jiabao made the sobering admission that the vast and underdeveloped countryside had been neglected for over more than 20 years of overall economic growth and was now returning to haunt Communist Party leaders as rural unrest.
"The core question of China's farmers is land, and China's reform began with rural villages," he told legislators at the annual Congress meeting this month.
Chinese leaders promised to boost rural spending and eliminate rural taxes. They said the crippled health-care system in the countryside would be given an infusion of cash and primary education for rural children would be made free.
But land reform was not dealt with.
Land rights conflicts have been at the root of much of the social unrest in China in recent years, particularly when agricultural land has been arbitrarily seized by developers (who often work hand-in-glove with local governments) and cleared for industrial or residential projects.
Only a fraction of the land payments by developers reaches the affected farmers. Most of the money goes to local governments, which have the authority to convert farmland for non-agricultural use. The rest of the payments go to the village committee, which again keeps most of it with only a pittance being used to compensate the farmers.
Cheated of their plots, which they view as their most fundamental asset, peasants have resorted to rioting. Such protests have grown increasingly violent and widespread in recent years, despite Beijing's demand for local officials to end abuses.
In 2004, the Ministry of Public Security reported 74,000 violent incidents, up from 58,000 in 2003, and 17 of them involved more than 10,000 people. The 2005 reports showed another jump to 87,000 incidents of "public order disturbances", up 6.6% from 2004.
Land grabbing will be severely punished, Wen told the National People's Congress. "We must respect farmers' wishes and avoid formalism and coercive orders," he told legislators.
While Wen pledged that land rights of farmers would be protected, he stopped short of saying whether they would be in any way extended or reformed.
The lack of progress on reform of land rights has now been identified as one of the reasons for the failure of the legislature this year to consider a long-discussed property law. The law - delayed now at least for another year - would have solidified a 2004 amendment to China's constitution that only vaguely calls for protecting property rights.
But one of the real problems with the current draft was that it failed to address the farmers' land ownership issue, said Yang Jingyu, a legal expert with the Legal Committee of the National People's Congress.
"We [at the committee] have received many opinions about this and there is a consensus that we need to conduct further study," Yang told Beijing's daily Xinjingbao.
The lack of land property rights not only lies at the heart of rising rural instability but is also one of the main constraints on rural income growth.
The disparity between urban and rural incomes in China is large: annual disposable income in urban areas in 2005 was US$1,304, but in rural areas it was only $400 - just 31% of the urban figure.
Some two-thirds of China's 1.3 billion people still live outside major urban centers, and almost half earn their living there. Yet rural areas have profited least from the economic boom of recent years, partly because of the extremely low productivity of agricultural work. Although agricultural production accounted for 47% of total nationwide employment in 2004, it accounted for only for 15.2% of gross domestic product.
The limited nature of the land usage rights also means farmers are unable to diversify to more profitable, non-agricultural industries.
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