Theoretical Study on the Regional Comprehensive Price of Expropriated Agricultural Land Based on the Benchmark Land Price

Yan TIAN, Peng FAN, Qingwei YANG, Xihui YANG, Lei WANG

1. Institute of Geographical Sciences, Henan Academy of Sciences, Zhengzhou 450052, China; 2. Henan Kefa Geographic Research Institute Co., Ltd., Zhengzhou 450052, China

Abstract So far, the work of calculating the regional comprehensive price of expropriated agricultural land has been carried out for more than ten years, but in the specific calculation process, the concept and calculation method of the regional comprehensive price of expropriated land are still lack of unified standards. In this paper, from the point of view of the benchmark land price, the regional comprehensive price of expropriated agricultural land is calculated by using the relatively mature benchmark land price.

Key words Agricultural land, Regional comprehensive price of expropriated land, Calculation method, Benchmark land price

1 Introduction

The regional comprehensive price of expropriated land is a policy formulated by China to alleviate a series of problems caused by land expropriation. Before the regional comprehensive price of expropriated land was implemented in 2005, compensation for land expropriation was determined first based on the provisions of the

Land

Management

Law

. The compensation was given based on the original purpose of the expropriated land and was calculated by the annual output value multiple method. However, the land acquisition price calculated by this method was generally low, and farmers’ long-term life is not guaranteed, leading to intensified conflicts between farmers and the government.In order to reform and improve the existing compensation standards for land acquisition, the regional comprehensive price of expropriated land came into being. In November 2004, the Ministry of Land and Resources issued the

Guiding

Opinions

on

Improving

the

Compensation

and

Resettlement

System

for

Land

Acquisition

, which clearly proposed to formulate the regional comprehensive price of expropriated land in each counties (cities) in a province to solve the problems of low land requisition price and different prices in the same place. In July 2005, the Ministry of Land and Resources issued the

Notice

on

the

Establishment

of

the

Unified

Annual

Output

Value

Standards

for

Land

Acquisition

and

the

Regional

Comprehensive

Price

of

Expropriated

Land

. The notice requires that the regional comprehensive price of expropriated land should be objective and fair, and the government, land users and farmers should negotiate and hear extensively to work out a price standard that is basically satisfactory to the three parties. At present, it is the work basis for local governments to solve the problem of compensation for land acquisition.

2 Connotation of the regional comprehensive price of expropriated land

At present, there is no clear and unified standard for the specific concept and connotation of the regional comprehensive price of expropriated land. It is generally believed that it mainly includes land compensation fees, resettlement subsidies and social security fees.

"The regional price of expropriated land" began with

Agricultural

Land

Valuation

Regulations

, which was issued by the Ministry of Land and Resources. It is stipulated that the price of expropriated land is mainly determined according to the utilization conditions of agricultural land and the social security level of agricultural land to the farmers, that is, the land requisition price is mainly composed of the quality price of agricultural land and social security price. "The regional comprehensive price of expropriated land" began with the

Decision

of

the

State

Council

on

Deepening

Reform

of

Strict

Land

Management

, Article 12 stipulates that "the people’s government of provinces, autonomous regions, and municipalities directly under the Central Government shall formulate and publish unified annual output value standards or regional comprehensive price of expropriated land in various cities and counties, and compensation for land acquisition shall be unified". The definitions of the two prices are different, but their essence is the same.

2.1 Concept of the regional comprehensive price of expropriated land

The regional comprehensive price of expropriated land refers to the comprehensive compensation standard for the collective land that may be expropriated by the state due to the needs of economic construction and is divided according to land location, agricultural output value, agricultural land grade, land use structure, per capita arable land, local economic development level, and land supply and demand relationship, which is calculated by using certain technical methods. In short, "the regional comprehensive price of expropriated land" means that provinces, autonomous regions, and municipalities comprehensively divide the areas according to the utilization conditions of agricultural land, the level of social security of agricultural land for farmers, and other factors, and determine the compensation for land-expropriated farmers’ land. The main purpose is to provide guarantee for equal compensation for land with similar conditions.

2.2 The basic connotation of the regional comprehensive price of expropriated land

Firstly, the regional comprehensive price of expropriated land is a pre-set standard, which is uniformly formulated by the government before land requisition occurs, and has strong rigidity. Secondly, the regional comprehensive price of expropriated land is a land compensation standard determined in accordance with regional average. Thirdly, the regional comprehensive price of expropriated land is a comprehensive compensation standard for the requisitioned land, including social security fees, land compensation fees and resettlement subsidies for the requisitioned people, and not including young crop compensation fees and ground attachments. Fourthly, the compensation standards for land acquisition in the same district are the same, and no distinction is made between land types and parcels.

3 Shortcomings of current measurement methods

According to the guidance notice of the Ministry of Land and Resources, there are currently four main methods for calculating the regional comprehensive price of expropriated land, including the multiple method of annual land output value, modification method of agricultural land price factors, coefficient revision method, land acquisition case comparison method. However, the current four methods have their drawbacks.

3.1 Multiple method of annual land output value

The multiple method of annual land output value is a traditional method in China to calculate the compensation standard for land acquisition. The multiple method of annual land output value is a continuation of the planned economy standard in the past, and the compensation standard is relatively low. Based on the current grain prices, as well as the status quo of agricultural production, the average income from growing grain every 667 mof land is 1 500-3 000 yuan. Even if it is calculated at a maximum of 30 times, the maximum compensation price for this fee does not exceed 100,000 yuan. In the actual land acquisition process, the land to be acquired is often in the suburbs, where the geographical advantage is obvious, and the appreciation potential is great. If compensation is based only on output value and land type, it will inevitably cause strong dissatisfaction from the land-expropriated farmers, which is not in line with the rules of market economy because the conversion of agricultural land to construction land will have great benefits.

3.2 Modification method of agricultural land price factors

The modification method of agricultural land price factors is a method to comprehensively determine the regional comprehensive price of expropriated land by revising land price date and taking into account other factors that affect the compensation standard for land acquisition based on the results of agricultural land grading and valuation.

The calculation formula is as follows: the acquisition price of agricultural land=the regional price of agricultural land × (1 + factor correction coefficient sum) × date correction coefficient + ground attachments. Among them, areas that have completed the calculation of the benchmark price of agricultural land according to the

Agricultural

Land

Valuation

Regulations

should determine the regional price of agricultural land according to the benchmark price of agricultural land. Areas that have not completed the calculation of the benchmark price for agricultural land first use the income reduction method, the market comparison method and other land price evaluation methods to calculate the land quality price of the area, and then make corrections on this basis. The correction coefficients include land location, per capita arable land, land supply and demand relationship, local economic development level, living security level,

etc.

This method can not only reflect the difference in the quality of land itself, but also comprehensively consider the main factors affecting land acquisition compensation, so it is generally a more scientific calculation method. But this method also has shortcomings. For instance, this method includes ground attachments during calculation, which is contrary to the connotation of the regional comprehensive price of expropriated land that does not include compensation for ground attachments and young crops. Besides, the grading and appraisal of agricultural land takes a long time, and the dates are not synchronized and need to be corrected; it has problems such as difficult data collection and poor current status, and the application of this method is limited.

3.3 Land acquisition case comparison method

Land acquisition case comparison method means investigating the local land acquisition cases in the past three years on the basis of dividing land acquisition areas, and then calculating the regional comprehensive price of expropriated land according to the actual land acquisition compensation standard of cases (not considering the compensation for ground attachments and young crops). The calculation formula is as follows: the price of land acquisition case comparison method=land acquisition case compensation price×(100/regional factor correction coefficient)×(100/individual factor correction coefficient)×date correction coefficient. The method is simple to operate, and the calculated results can be connected with the current land acquisition compensation standards. But there are also some disadvantages. For example, the land acquisition case comparison method is applicable to areas where land market is well developed and there are a large number of land acquisition cases. However, through field surveys, it is found that many local governments implement two price standards in and outside the construction land scale control area determined by the overall land use plan. As a result, the market comparison method has lost the basis of its application. In addition, land requisition is a political act of state control and is rigid. Its approval process lasts for a long time. Several years have passed from the beginning of land requisition to the final completion of land requisition, and a new round of regional price setting work should begin again.

3.4 Revision coefficient method

Revision coefficient method means revising and determining the new land acquisition compensation and resettlement fee standard based on the government’s last round of land acquisition compensation and resettlement standards, as well as relevant factors in the past three years. The calculation formula is as follows: land acquisition compensation and resettlement = last round of land acquisition compensation and resettlement fees×(1 + comprehensive revision coefficient).

The comprehensive revision coefficient refers to the revision coefficient weighted by factors such as GDP growth rate, CPI (consumer price index) growth rate, PPI (producer price index) growth rate, land transfer price level and other factors. This method is easy to master and easy to operate. The disadvantages are as follows. This method is based on the previous round of land acquisition compensation. This foundation must be accurate and reasonable to ensure that the new round of calculation results are accurate and reasonable, so it has certain limitations. In addition, the data of various economic indicators are relatively easy to collect, but it is difficult to collect the data of administrative villages and ensure the accuracy of the data. Therefore, the economic indicators of the entire county are generally taken as the average level of the county, which reduces the differences between various districts in economic indicators.

4 Backward induction of benchmark land price

The regional comprehensive price of expropriated land is one of the costs of the benchmark land price of urban construction land. The basic principle is to calculate the regional comprehensive price of expropriated land based on the composition of the cost. Since the benchmark land price is the lowest price for the transfer of state-owned land, the regional comprehensive price of expropriated land calculated based on urban benchmark land price is the lowest level of the regional comprehensive price of expropriated land. The coverage areas of urban benchmark land price are generally urban planning areas, and urban planning areas are also the main areas of land acquisition. Urban benchmark land price reflects the basic value of the land in the area. The process is as follows:

(i) The comprehensive benchmark land price is used to verify the regional comprehensive price of expropriated land. If there is no comprehensive benchmark land price, the sub-use benchmark land price can be superimposed to calculate the comprehensive benchmark land price.

(ii) The benchmark land price level map and the regional comprehensive price map of expropriated land are overlaid to determine the benchmark land price of requisitioned areas. If a district corresponds to multiple benchmark land prices, the area weighting is used to calculate the average land price, and the calculation formula is as follows:

P

=(

S

×

X

+

S

×

X

+…+

S

×

X

)

/S

In the formula,

P

is the average land price;

S

is the area of patch

i

in districts;

X

is the integrated land price of patch

i

in districts;

S

is the total area of districts.(iii) The regional comprehensive price of expropriated land in areas covered by the benchmark land price is calculated as follows: the regional comprehensive price of expropriated land=the average of benchmark land price-land appreciation income-land development fee-land acquisition tax-investment interest-corporate investment profit-compensation for young crops. Each cost is calculated using the following method: ① Land appreciation income is 20%-30% of the average of benchmark land price; ② Land development fee refers to the sum of various objective costs that need to be invested under the average development level of regional land; ③ Land acquisition tax includes land acquisition management fee, cultivated land occupation tax, cultivated land reclamation fee,

etc.

a. Land acquisition management fee is generally 2.8% of land acquisition fee; b. Cultivated land occupation tax is determined according to the

Implementation

Measures

of

<

Interim

Regulations

on

Cultivated

Land

Occupation

Tax

>

in

Henan

Province

(Henan Provincial People’s Government Order[2009]No. 124); c. Cultivated land reclamation fee is determined in accordance with the

Notice

of

the

People

’

s

Government

of

Henan

Province

on

Announcement

of

the

Cancellation

of

Expropriation

and

Adjustment

of

Related

Fees

(Yuzheng[2008]No. 52).

④ Investment interest=land development fee×{(1+fund interest rate)-1}, in which fund interest rate is the one-year bank loan interest rate; ⑤ Investment profit rate is generally 10%; ⑥ The compensation for young crops is calculated according to local standards.

5 Impact of the new Land Management Law Amendment (draft for comments) on the regional comprehensive price of expropriated land

5.1 Modification process

In 2015, the Party Central Committee and the State Council decided to carry out pilot reforms of rural land acquisition, collective operating construction land entering the market, and homestead management system. In February of the same year, the Standing Committee of the National People’s Congress passed the

Decision

on

Authorizing

the

State

Council

to

Temporarily

Adjust

the

Implementation

of

Relevant

Legal

Provisions

in

33

County

(

City

,

District

)

Administrative

Regions

including

Daxing

District

,

Beijing

, and suspend the five provisions of the

Land

Administration

Law

and one provision of the

Urban

Real

Estate

Management

Law

. The decision requires that relevant laws should be revised and perfected if it is proved to be feasible in practice, and relevant laws and regulations shall be resumed if it is proved to be unsuitable for adjustment. In 2016, the Central Reform Office listed the revision of the

Land

Administration

Law

as a key reform task. In accordance with the principle of simultaneous advancement of legislation and reform, the Ministry of Land and Resources has steadily and orderly advanced the revision of the

Land

Management

Law

. After repeated research, it has reported and communicated many times to the Legal Affairs Committee of the Standing Committee of the National People’s Congress, the Agricultural Affairs Office, and the Legislative Affairs Office of the State Council, forming the

Land

Management

Law

(

Amendment

). On the basis of fully adopting the opinions of all parties, the current

Land

Management

Law

(

Amendment

) (Draft for Soliciting Comments) has been deliberated and approved by the 5Ministerial Meeting of the Ministry of Land and Resources.

5.2 Modified content

5.2.1

Acquisition scope. The scope of public interest for land acquisition is clearly defined. Although current acquisition scope also prioritizes public interest, the scope and connotation of public interest are vaguely defined, leading to abuse of public interest. Based on the comprehensive consideration of international legislative experience, in conjunction with the

Regulations

on

Expropriation

and

Compensation

of

Houses

on

State

-

owned

Land

, national defense and diplomacy, infrastructure, public utilities,

etc.

are defined as public interest, and those that do not conform to the scope of public interest withdraw from the scope of land acquisition (Article 44).

5.2.2

Acquisition procedures. Land acquisition procedures should be further standardized. The current land acquisition announcement and compensation and resettlement announcement are made after land acquisition application is approved and after the compensation and resettlement plan is formulated. The government is in a dominant position, and farmers are not fully involved in the compensation process. The new regulations require that local governments should sign land compensation and resettlement agreement with farmers before land acquisition, and issue compensation and resettlement funds, and fully embody land-expropriated farmers’ right to know, participate and supervise (Article 46).

5.2.3

Acquisition method. The reform experience is incorporated into the law, and the regional comprehensive price of expropriated land is clearly proposed. It is required to comprehensively evaluate and determine the comprehensive land price of an area and give fair and reasonable compensation by comprehensively considering factors such as land output value, location, relationship between supply and demand, and the level of economic and social development (Articles 47 and 48).

5.2.4

Compensation content. Two new compensation contents are added. In addition to the currently stipulated land compensation, resettlement subsidies, and compensation for young crops and ground attachments, houses are listed separately from the compensation for ground attachments, and farmers’ houses are no longer used as compensation for ground attachments, but provided with fair and reasonable compensation as special housing property rights (Article 49). At the same time, by arranging a certain number of commercial construction land or properties, rural residents whose land has been requisitioned are included in the corresponding medical and old-age social security systems,

etc.

to effectively guarantee the long-term livelihoods of land-expropriated farmers (Article 51). The provision that the sum of land compensation fee and resettlement subsidies shall not exceed 30 times the annual average output value of the three years before land acquisition is canceled. It is proposed that individuals reasonably share land value-added income and provide fair and reasonable compensation to guarantee the original living standard and long-term livelihoods of land-expropriated farmers (Article 47).

6 Trends of calculation method of the regional comprehensive price of expropriated land

After the implementation of the regional comprehensive price of expropriated land, the current price compensation standard for land requisition is generally higher than the previous compensation standard for land requisition. Although the contradictions caused by land acquisition have eased somewhat, they still exist. This is because the current research focus on the regional comprehensive price of expropriated land is still essentially based on the agricultural use of land. At present, the compensation standards for land acquisition in many places are calculated by measuring the agricultural use of land. Land is the greatest wealth of farmers. When farmers lose their land, they also lose the jobs and livelihood security they depend on, especially the low-cost lifestyle and development methods that are difficult to calculate with money.

Although the existing compensation standard for the regional comprehensive price of expropriated land is higher than the previous compensation standard, the living cost of the land-lost farmers has increased, and the requirement that the standard of living does not decreaseis difficult to verify. Land-lost farmers do not reasonably enjoy the value-added benefits of land. From the revised policy on the land expropriation system in the latest

Land

Management

Law

, it can be seen that the national land expropriation compensation policy requires farmers to reasonably share the value-added benefits of land and provide them with fair and reasonable compensation. Therefore, the distribution of land value-added income is the key to the estimation of the regional comprehensive price of expropriated land.