Wednesday, April 9, 2014

China Warns Local Governments on Land Misuse

China's land ministry on Wednesday accused six local governments of misusing farmland, making questionable land seizures and giving inadequate compensation to farmers.

In a statement on its website, the Ministry of Land and Resources criticized authorities in Anhui, Henan, Hubei and Guangdong provinces as well as the regions of Ningxia and Inner Mongolia for their land-use practices. It warned them they had six months to rectify the practices and in the meantime could no longer seize or convert agricultural land except for Beijing-approved infrastructure projects.

"The problems seriously violated laws on land management and breached the bottom line on the protection of agricultural land," the statement said without saying what would happen if the problems weren't addressed.

Land seizures for improper purposes and insufficient compensation given to farmers are major sources of social tension in China.

For China's cash-strapped local governments, land sales are an important source of income needed for infrastructure development and other projects. Last year, national revenue from land sales reached four trillion yuan ($645 billion), an increase of almost 45% from a year earlier.

In a report made public last month, the World Bank called on China to reduce its use of land seizures--and use expropriations only for public projects. It also said that over two decades ending in 2010, local governments had seized rural land at some two trillion yuan less than market value. The World Bank also called for a change in the government fiscal system to help reduce the dependence of local governments on land sales for revenue.

The land ministry said these latest cases, which followed audits conducted in the final three months of last year, involved a total of 4,507 hectares of land, including 2,171 hectares of farmland, the ministry said.

The ministry said that local authorities in Yongcheng city in Henan province, Ezhou city in Hubei province and Maoming city in Guangdong province hadn't fully compensated farmers in cases involving a total of 187.8 million yuan in payments owed. It said that moves to rectify the problems were inadequate.

Authorities in Inner Mongolia's Wulanchabu were also among those criticized for improper practices. The ministry said authorities there seized land without proper authorization to build logistics parks and government office clusters.

Another audit conducted by the land ministry revealed that 34 city governments had taken land from farmers and converted it to industrial or commercial use without proper authorization. Those cases involve 520 construction projects and covered an area of 2,147 hectares, according to a separate statement last month.

Write to Esther Fung at esther.fung@wsj.com

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