Study On Economic Compensation Mechanism Of Arable Land Protection From The Perspective Of Balanced Interests

Arable land has the double identities as resources and assets. As the natural resources, itshoulders the burden of national food security and ecological security. As the assets, it playsan irreplaceable role to ensure the national economy security and social stability. In otherwords, arable land is the first security line of the human survival. Without doubt, it isextremely important to protect the arable land. According to the previous experiences ofarable land protection in both foreign and our own country, Chinese government graduallysets up and implements a set of arable land protection system which is suitable for the currentsituation in China. Despite this system which develops toward the expected goals, what isworth pondering is that the quantity and quality of arable land are still on the decline in ourcountry. Therefore the protection of arable land is still facing urgent challenges. Observingthe natural, population, economic and social factors which cause loss of arable land loss,except the non human controllable factors, we can find that all other factors are related to theinterests. This means that the deep reason of arable land loss is imbalanced benefit in theprocess of the protection of arable land. Imbalanced benefit is due to serious and positiveexternality of the existing property rights set of arable land, including the ecological andsocial benefits of arable land ownership, and the development rights of arable land. Thus,there are two consequences caused by the imbalanced benefit:1) the economic rights andinterests cannot be obtained for the main parts of property rights of arable land;2) thedifference in comparative benefits is exacerbated since there is no scientific mechanism ofregulating interests. Government should make new policies which are guided and aimed atbalanced benefits to fundamentally change the current situation. The new policies should beable to internalize positive externality of arable land property rights, conduce a gradualtransformation of the policies with the targets of arable land protection by supervisionmechanism into a mechanism combined restraint and incentive. This new mechanism is alsothe main research subject of this dissertation, the economic compensation mechanism of thearable land protection, under the perspective of balanced interests.Based on the analysis of previous research both in China and other countries abouteconomic compensation of arable land protection, this dissertation is structured as follows bythe guidance of externality theory, land value theory, property rights theory. First, this dissertation analyzes the current status of China’s arable land protection and the factorsaffected the implementation of protection policies, finds out the problems and difficulties ofChina’s policies of arable land protection, indicates the importance of economic benefit in theprogress of arable land protection. Then, according to the analysis of the interests gameamong the related subjects during the process of arable land protection, this dissertationprovides a certain amount of ideas and foundation for confirming the objects, subjects and thestandards of compensation in the totally new perspective of the interests balance. Next, thisdissertation establishes the property and value basis of the structure of multi-level economiccompensation mechanism for arable land protection. This is achieved through there-understanding of the values of arable land based on the arable land resources functions, theChina’s arable land property rights system, and the re-understanding of the asset values ofarable land based on the arable land property rights system Thereafter, the innovations studyin this dissertation obtains both macro-support from theoretical argumentation andmicro-support from the data set according to the investigation on the farmers demand foreconomic compensation mechanism of arable land protection and the summary and referenceof the experiences about the economic compensation of arable land protection in China andother countries. Finally, based on the analysis of the earlier parts in this dissertation, themulti-leveled, economic mechanism is built for the compensation of arable land protection,and empirical analysis is conducted for the calculation modes of the two levels ofcompensation standards.In the conclusion part, the dissertation discusses complementary measures which canpromote the effective implementation of the compensation mechanism and draws thefollowing conclusions.(1) The main stakeholders involved in arable land protection are central government,local governments, farmers, and the regions failed to fulfill its obligations or overfulfiledobligations to protect arable land. The gaming analysis of their multiple interests reveals thatthe conflicts among each stakeholder cannot be reconciled, and lead to gaming results withinterests imbalances in the current institutional arrangements. The interests of thestakeholders’ demands cannot be met, and furthermore, the valuable arable land resourcescan not be protected reasonably and effectively. In order to facilitate the interests balance ofall parties, our country should establish a mechanism that the interests could induce theprotection of arable land from the angle of rational agent. The mechanism also should includeproviding the political compensation to the governments of the regions overfulfilledobligations of protecting arable land, establishing an open, fair, equitable interests adjustmentmechanism among different regions by combining the wishes of the arable land protectionfrom different region, giving reasonable and economic compensation to the farmers who protect arable land, improving the standard for land expropriation compensation and so on.(2) Arable land resource possesses multiple functions and the values of arable landresource consist of economic value, ecological value and social value. Economic valueequated with the market value while ecological value and social value are parts of non-marketvalue which have positive externalities. And then the positive externality in our country’scurrent system of arable land property rights is found. The externality is caused by ecologicalvalue and social value of arable land ownership, and development rights of arable land. Thevalue system of arable land asset relying on the property rights system of arable land regardthe value of arable land ownership as the core. The value of arable land ownership consists ofthe all values of arable land rights which derived from the arable land ownership. The valueof arable land rights include the value of arable land using rights, the value of arable landleasing rights, the value of arable land contracted management rights and the value of arableland development rights. Because of the different connotation of each arable land rights,different value of each arable land asset is formed. All values mentioned above are the valuebasis and property basis of the economic compensation for arable land protection.(3) Based on357questionnaires in Xinye County of Henan province, a Logistic modelis used to analyze factors affecting the demand willingness of economic compensationmechanism of arable land protection in this dissertation. The results indicate that the numberof farmer in a family, education level, the number of labor in a family, arable land acreage,the proportion of agricultural income, the willingness of arable land protection and the degreeof arable land fragmentation are significantly affect the demand willingness. Therefore,government should concern farmers’ willingness and interest demands with an impartialattitude, compensate farmers, especially farmers lived in major grain producing areas and lesseconomic developed areas, and stimulate farmers’ unique potential in maintaining the qualityof arable land.(4) Economic compensation mechanism aimed and guided by the interests balance forfarmland protection is composed of two basic levels. The first level is economiccompensation mechanism for farmers based on spillover benefits of arable land ownership. Itmainly solves the problems about internalization of externalities of ecological benefits andsocial benefits of farmland ownership. The second level is regional economic compensationmechanism based on the opportunity cost compensation of arable land protection. It mainlysolves the problems about internalization of externalities of arable land development rights.(5) The whole basic principles of the compensation mechanism include the principle ofpareto optimality, fair priority and efficiency follow-up, who benefits who compensates andsustainable development. The compensation objects involved in both two levels ofcompensation mechanisms are farmers and farmers’ community. The specific objects of the second level compensation mechanism are the local governments that fulfill extra obligationsof cultivated protection. The compensation subjects involved in both two levels ofcompensation mechanisms are central government and the local governments failed to fulfilltheir obligations to protect the arable land. The specific objects of the first and second levelcompensation mechanisms are the non-agricultural enterprises and citizens, new constructionland users and construction land users who improve the intensity. The compensationstandards of the first and second level of compensation mechanism are determined accordingto the non-market value of arable land resources and the value of arable land developmentrights respectively. The calculation modes of these two levels compensation mechanisms arecontingent valuation method, potential market value of arable land and value differencemethod of arable land resources respectively. The empirical study in Xinye County of Henanprovince indicates that the calculation modes of compensation standards of two levelscompensation mechanisms are operable and scientific. The compensation amount isaccording to the standardized area of arable land. The basic compensation method is thecombination of monetary compensation and endowment insurance. The compensationpayment is mainly delivered in one year and supplemented by one-time payment. Thecompensation approach of the first and second level of compensation mechanism is publicfinancial compensation and market compensation respectively. The same capital sources ofthe two levels of compensation mechanisms are central and local government finance, and thefinance of local government failed to fulfill its obligation to protect the arable land. Thespecific capital sources include taxes collected from the non-agricultural enterprises andcitizens according to the ecological benefits and social benefits of arable land resources, thecharge of purchasing development rights of arable land from the new construction land usersand construction land users who improve the intensity respectively. The operations of the twolevels compensation mechanisms mainly rely on Compensation Fund Council and itsaffiliates which are the Compensation Funds and the Reserve Centers of Arable landDevelopment Rights at all levels. The operations are achieved through the co-ordination ofthe Compensation Fund and the operation of transaction markets of arable land developmentrights. The smooth implementation of the double compensation mechanism requires a seriesof supporting measures covered by legal, institutional, technical, organizational and culturalfive aspects.