New research conducted by Michigan State University, Renmin University and Landesa shows China is at a crossroads in its agriculture development. As a result, MSU researchers suggest that China should protect land rights of all farm families and restrict corporate farming if it wants to close the income gap between cities and countryside.

The study was published in the Chinese Academy of Social Sciences’ 2011 blue book, an annual report of China’s rule of law. It found only 44 percent of China’s 200 million farming families has been issued land-rights documents as required by law, said Jeff Riedinger, dean of MSU’s International Studies and Programs, and a co-author of the study.

Where implemented, China’s current land tenure reform program, adopted in 1998 to reduce poverty, gives farmer’s 30-year, extendable rights to their parcels.

“We found Chinese farmers with secure land rights were 76 percent more likely to make long-term investments,” Riedinger said. “And this means they could become more significant consumers of goods and services, potentially increasing export market opportunities for Michigan companies and in-country markets for General Motors and Ford.”

In 2009, gross income from land investments is estimated at about $69 billion, which is more than 12 percent of China’s total rural income for that year, according to the researchers. China has 800 million rural citizens.

“Long-term investments include planting orchards or tea gardens and expanding the number of farm animals,” said Hui Wang, a MSU graduate student and Riedinger’s research assistant. “These investments substantially boost farm household income.”

In addition, the researchers found an upswing in the acquisition of farmers’ land rights, often illegally and involuntarily taken by village officials for transfer to corporate farmers. Even with noteworthy accomplishments in rural land policy laws, one out of 10 rural villages experienced a land taking in 2010, according to Riedinger and his collaborators.

Often, the land is converted to nonagricultural uses, which threatens China’s grain security, Riedinger said. And large-scale farming is rarely more productive than family farms with stable and secure land rights. Riedinger explained the increase in such acquisitions could be the result of local governments across China striving to keep economic growth on track by selling land rights.

The MSU team made several recommendations to help address the issues. One is to urge the Chinese government to reform the law on land takings (Land Management Law) to improve compensation standards and procedural due process for affected farmers. Additionally, the team suggests restricting corporate farming by limiting land holdings and requiring informed consent among affected farmers.

Another key recommendation is to increase monitoring and enforcement actions against local governments and officials on land violations.

“China’s economic development is inextricably linked to how well policies promoting secure land rights are understood and implemented at the local level,” Riedinger said.

As such, the team has shared the survey findings and discussed preliminary policy recommendations with government policymakers in China.

The study is the fifth in a series by MSU, Renmin University and Landesa, a rural development institute. Conducted in mid-2010, the survey covered 1,564 households in 17 provinces that together contain an estimated 83 percent of China’s rural population.