*3.2. The Farmland Rights System Reform from Decentralization to Centralization in Yuyang District*

In order to solve the issue of farmland, the Yuyang District Government actively responded to the call of the central government for the reform of land marketization. In 2017, the Yuyang District Government promoted the farmland rights system reform with the 'one household one plot' system as the core and further promoted the farmland shareholding cooperation in some qualified rural collectives, on this basis, to realize the shift of farmland rights from decentralization to centralization (Figure 4). The 'one household one plot' system reform is a method of realizing each peasant family farming one piece of farmland by the adjustment of farmland rights, construction of farmland facilities, and improvement of soil quality based on the overall planning of rural collectives. The reform enables farmers to agree to the rural collectives to adjust farmland by administrative means because some promises (original area of farmland, original contracted relationship, and original managing model) and expectations (concentrated and contiguous farmlands, better farming conditions, and better-quality soil) are given to farmers, which improves the public benefits of rural collectives. From the results, the real rights are still greater than the creditor right in the control rights of farmland of farmers, but the rights start to shift from real rights to creditor rights, which means rural collectives have realized the adjustment of farmland based on certain conditions, and the adjustment of farmland is not an untouchable red line for rural collectives.

Based on the 'one household one plot' system reform, some rural collectives in Yuyang District tried to realize farmland shareholding cooperation by suppositional authentic right (farmers are only identified with the area of all their farmland, but not specific plots); they hoped to promote the shift of farmland rights from decentralization to centralization by market means. In these rural collectives, most members of rural collectives are less willing to manage farmland, and they have non-agricultural jobs and desire property income, so these rural collectives are suitable for farmland shareholding cooperation. These rural collectives promised the original area of farmland, original contracted relationship, and freedom to enter or exit, and these gave farmers the expectation of property income, more free time, and better jobs if the farmland shareholding cooperation could be agreed upon by members of rural collectives. These conditions set by these rural collectives are consistent with the needs of these members of rural collectives, so almost all members of rural collectives unify the proposal and join the newly established rural collective shareholding economic cooperative, according to the procedure, and formulate the cooperative charter. The cooperative charter stipulates that farmers will voluntarily use the area of farmland they hold as their original share in the cooperative. Meanwhile, it also stipulates that the farmland is planned and developed by the cooperative, and the collective members do not participate in specific business matters but have the right to supervise and make suggestions. In addition, if the collective members are dissatisfied with the cooperative's operation, they have the right to apply to the cooperative to withdraw their shares in the form of negotiation, and the cooperative will redistribute to them specific plots that meet their contracted area. It is not difficult to find that the shift in farmland rights from decentralization to centralization has been further realized after rural collectives complete the farmland shareholding cooperation by market means. Compared with the 'one household one plot' system reform, the degree of shift is more significant. According to the fact that farmers do not participate in the specific management of farmland, it can be seen that the control rights of the farmland of farmers have changed from being dominated by real rights to being dominated by creditor rights, but it is not an extreme set of creditor rights because farmers have the right to exit by negotiation.

**Figure 4.** The farmland rights system reform in Yuyang District.

#### *3.3. The Development of Agricultural Modernization in Yuyang District after Farmland Rights System Reform*

When Yuyang District completed the farmland rights system reform from decentralization to centralization, these collectives circulated concentrated and contiguous farmlands to new agricultural business entities by the cooperative self-operation, introduction of social capital, and cooperation with social capital, which accelerates the development of appropriate scale management of farmland. According to data from seven rural collectives, compared with the past, the number of new agricultural business entities in the village has increased by 2.5 on average, and the farmland management area of them has increased by 50.9 mu.

When the appropriate scale management of farmland is achieved, these new agricultural business entities have a greater willingness to invest more production factors into the farmland. According to interviews with eight new agricultural business entities, all of them mention that the expansion of management scale decrease production cost of unit farmland, which makes it cost-effective to introduce new technologies and invest more production factors. They improve the farming efficiency and product quality by mechanized production, soil testing formulas, comprehensive water and fertilizer facilities, farmland management information systems, and innovation on technology and management of agriculture. This means the achievement of the intensification of elements on unit farmland. Meanwhile, these new agricultural business entities achieve the mechanization of all production links by purchasing agricultural machinery and provide mechanized production for local farmers by paid services, which promotes the improvement of the overall local agricultural production efficiency. Government officials in Yuyang District stated that all new agricultural business entities have realized mechanized operations, and they provide 80% of the agricultural mechanized services. Furthermore, the production behavior of the local new agricultural business entities also changes towards the direction of environmental friendliness with the expansion of the scale of farmland management. They believe that these changes can not only improve the quality of agricultural products to earn more profits, but also practice social responsibility by reducing the negative impact on the environment. Three new agricultural business entities said they stop farming a part of farmlands each year to restore fertility because other farmlands are enough to meet their needs of earning. Six new agricultural business entities said they purchase more high-quality fertilizers, which have less threats on farmlands, because their demands increase due to expansion of farmland area, and they can purchase these fertilizers for lower prices. According to interviews with government officials and village cadres, their words are also confirmed, and these situations are common in new agricultural business entities in Yuyang District.

Generally, the practice of Yuyang District proves that new agricultural business entities achieve high levels of yield, efficient production, and environment friendly agricultural development objectives by large-scale farmland management, intensive use of production factors, environmentally friendly production behavior, and agricultural mechanized production, thereby promoting the process of agricultural modernization. An important prerequisite for these changes is that rural collectives have obtained more real rights of farmland by the farmland rights system reform from decentralization to centralization, and the appropriate scale management of farmland has been achieved by their adjustments.

## **4. The Farmland Rights System Reform Performance of Yuyang District**

According to field research, corn, potatoes, and pasture are the main crops planted by agricultural business entities (traditional farmers and new agricultural business entities) in Yuyang District. Among them, corn is the crop with the largest planting area, and it is widely planted by traditional farmers and new agricultural business entities. Therefore, this study will evaluate the promotion effect of Yuyang District's reform on agricultural modernization through the changes in the conditions of corn planting. Here, the data in 2016 are used as the data before the reform, and the data in 2021 are used after the reform, and the two are compared to explore the reform results.

### *4.1. High Level of Yield*

Table 3 shows the changes of yield indicators before and after the reform. Obviously, the reform has significantly improved the farmland management conditions of all agricultural business entities. The average area of farmland per agricultural business entity has increased from 26.4 to 48.87 mu, and the average number of plots per agricultural business entity has decreased from 16 to 2.4. It should be noted that some agricultural business entities constantly circulate farmland from others, so the reform has realized the contracted farmland of each household, but some agricultural business entities still have more than

one piece of farmland. In the new farmland management conditions, the average yield of unit farmland of corn also increased by 135.1 kg. Combined with the information obtained from different agricultural business entities, traditional farmers believe that the adjustment and consolidation of farmland facilitate agricultural production, so their actual cultivated area has increased after the reform. New agricultural business entities consider that the reform not only facilitates agricultural production by expanding the scale of farmland, but also that the increase in demand for agricultural materials supports them purchasing fertilizers and pesticides for lower prices, so they tend to purchase high-quality materials, and the change is conducive to increased production. The result proves that the reform has played a positive role in increasing the yield of unit farmland, which achieves the objective of high level of yield in agricultural production.

**Before After Changes** High level of yield Average area of farmland per agricultural business entity (mu) 26.4 48.87 +22.47 Average number of plots per agricultural business entity (piece) 16 2.4 <sup>−</sup>13.6

Average yield of unit farmland (kg) 729.8 864.9 +135.1

**Table 3.** Comparison of yield indicators before and after the farmland rights system reform.

#### *4.2. Efficient Production*

Table 4 compares the changes of efficient production indicators for evaluating the impact of the reform on efficient production. It is not difficult to find that the agricultural mechanization rate has been significantly improved after the reform, from 63% in 2016 to 79.6% in 2022, which proves that the reform has lowered the cost of agricultural mechanization production by the adjustment. Labor productivity has grown dramatically, by nearly 50%. The popularization of agricultural mechanization, the improvement of agricultural socialization services, and the upgrading of agricultural technology and management technology have improved, so agricultural production does not require excessive labors and time. Meanwhile, the increase in the number of new agricultural business entities means that the number of high-quality labors in agriculture has increased. Moreover, the growth in output of unit farmland also increases the input-output ratio of unit farmland by 11.3% compared with before the reform. In traditional farmers' views, their production costs are higher than before, but the rise of their incomes is remarkably faster than costs. Therefore, the result is that the reform accelerates the objective of efficient production of agricultural production by improving the mechanization rate, labor productivity, and input-output ratio of unit farmland can be drawn.

**Table 4.** Comparison of efficiency indicators before and after the farmland rights system reform.


#### *4.3. Environmental Friendliness*

Table 5 shows the changes of environmental friendliness indicators in order to evaluate the impact of reform on environmental friendliness of agricultural production. According to ESV calculations, the ESV of Yuyang District in 2022 increased by 43.1 compared to 2016, which is beneficial regarding the increase in the actual cultivated area. It means an increase wherein humans gain more from the ecosystem. In terms of carbon emissions, the total carbon emissions and carbon intensity of agricultural production have decreased slightly after the reform because of the increase in the amount of organic fertilizer used by new agricultural business entities. Generally, the reform has increased the benefits

of agricultural production from ecology and promotes agricultural production gradually changing towards environmentally friendly.

**Table 5.** Comparison of environmental friendliness indicators before and after the farmland rights system reform.


#### **5. Discussion and Implications**

#### *5.1. Discussion*

As this study shows, the farmland rights system reform from decentralization to centralization effectively solves obstacles of farmland circulation, which facilitates concentrated and contiguous farmlands, which are circulated to new agricultural business entities from rural collectives [2,12,15,28–31]. These new agricultural business entities pursue the objectives of high levels of yield, efficient production, and environmental friendliness in agricultural production by scale of farmlands, intensification of factors, diversification of functions, and mechanization of production, and then indirectly promote the process of agricultural modernization [35–43]. In essence, this reform is a further extension of the land marketization reform, which is to realize the shift of farmland rights from decentralization to centralization by market means rather than administrative means. The control rights of farmland of farmers still retain considerable real rights, and they have shifted with the change in demand of farmers. They not only avoid the negative impact of land circulation by administrative means on farmers' enthusiasm for production, but also increase income growth channels for farmers, which is an effective mean to promote economic growth with market rules. The rights relationship of farmland was adjusted by administrative means in the early stage of reform, but its fundamental purpose is to clear the obstacles in order to complete the shift in farmland rights from decentralization to centralization by market means. Obviously, in farmland issues, the intervention of administrative means can effectively make up for the deficiency of market means because it can avoid market failure by modifying the rights relationship of farmland.

Yuyang's experiences show that the farmland issue is a complex one that cannot be solved by a theory based on a single type of property rights. The theory of property rights based on private ownership is still the main property rights theory, but it is still difficult to explain the issue of farmland without considering the public benefits. Therefore, it is necessary to explore agricultural land issues from the perspectives of public welfare and private benefits. Moreover, when considering the issue of farmland, administrative means are effective supplements to market means because it is difficult to achieve optimal allocation of farmland simply by relying on the market. The intervention of administrative means does not mean that it does not conform to the market rules, although it plays a key role in the process of the shift in farmland rights from decentralization to centralization. In Yuyang's practice, administrative means are used to remove obstacles that hinder the optimal allocation of farmland by market means, and the decision-making power of farmland allocation is still in the hands of the market. The reform has empowered rural collectives to participate in market activities, which is a way to facilitate the public benefits. Undoubtedly, the completion of the reform is a policy accelerator for the optimal allocation of farmland in the new development stage, which goes with the flow of change in social demand and promotes agricultural modernization.
