Laws and regulations need to be revised to give them full property rights over the contracted land they work

Although over the years the central government has effectively protected farmers' rights and interests to use their collective rural land, it has failed to introduce practical measures to legally enable them to hold the property rights over contracted land.

Most of the problems related to rural land use are due to farmers' lack of full and legally protected property rights over collectively owned land. China places its rural land under collective ownership, giving farmers management rights over their contracted land and right of use over their homestead lots. Farmers have contracts granting them the right to use the land for 30 years, but it is difficult for them to negotiate for fair compensation when their land is requisitioned, because they don't have property rights. This has resulted in sluggish development of the rural land transaction market and hampered agricultural industrialization and large-scale farming. And while urban enterprises can acquire loans against their assets, the use of collectively owned land, such as arable land, plots for housing construction and self-preserved land, cannot be used as collateral for bank loans, which is tantamount to erecting a legal barrier to farmers acquiring bank loans.