The Economic Compensation Function for the Landless Peasants in Shaoy

ang CityYiai Li, Linye Dai, Lei Shi, Yating Qiang, Qihui Zou

Outline

• Background• Choosing the Study Site• the Analysis of the Current Compensation System• the Economic Compensation Function for the Landless P

easants• Concluion• References

1.Background

Policy Context Realistic Background

Policy Context

the "12th five-year plan" The government is aimed to • accelerate social development with the focus on improvin

g people's livelihood, developing rural pension undertaking

• try to promote healthy land development ， protecting farmers' rights and interests

Realistic Background the speeding of the urbanization

the strong demand of the land

the problems in the current compensation system for the landless peasants

large-scale land acquisition activities

current Land Management Law

a new economic compensation function

2.Choosing the Study Site --Shaoyang, Hunan

TraditionTrendTerrible Impacts

Tradition the strong demand of the land<—>large population

•It has a total population of around 7.3 million•It has an area of about 31.2m acres, cultivated land 4.9m•That means average people owns less land, causing prominent conflicts between human and land

taking agriculture as the foundation in the development•Traditional planting in Shaoyang is well developed•There are four pillar properties of agriculture in Shaoyang•It is also a major agriculture production base

Trend

the demand of the land

municipal land for public facilities

use of land for urban roads,bridges and railways

green spaces

residential land

the expansion of the scale of the expropriation of the rural land

the cultivated land's quantity of the current years in Hunan

Year the cultivated land's quantity (hectare)

changing rate

2000 3921600 1

2001 3912600 -0.23%

2002 3891000 -0.55%

2003 3833700 -1.47%

2004 3816500 -0.45%

2005 3816000 -0.01%

2006 3787600 -0.74%

2007 3789000 0.04%

2008 3789400 0.01%

2009 379.0700 0.03%

Source ：《 2012 年湖南省统计年鉴》

Terrible ImpactContradictions occur between the government expropriating land and farmers who want to preservie their own right•Illegal land seizures by officials are common in China•the violent demolition of people's houses•collusion between business and the Government•40% of the complaints in Hunan Letters and Calls bureau is about improving the management of the land resources

These problems have generated great discontent and social unrest in the society

3.the Analysis of the Current Compensation System

the Current Compensation System"Land Management Law""Amendment of Land Administration Law" the Defects of the Current Compensation Syste

mthe unreasonable calculating standardsthe low standard of the compensationthe inflexibility of the compensation

the Current Compensation System "Land Management Law" Compensation fees for land requisitioned include land co

mpensation fees, resettlement fees and compensation for attachments to or green crops on the land.

"Amendment of Land Administration Law"• Removing the content that “Compensation should be ma

de according to the original purposes of the land expropriated.” and “The combined total of land compensation fees and resettlement fees shall not exceed 30 times the average output value of the three years prior to the expropriation.”

• Establishing the principle of fair compensation

the Current Compensation SystemSpecifically, in Shaoyang:

Source ：《湖南省人民政府关于调整湖南省征地补偿标准的通知》

the Defects of the Current Compensation System

the unreasonable calculating standards• The current compensation is based on the average prod

uction value of the land in the recent years• There is no united exhaustive explanation of the calculati

ng standards, seeming unconvincing 　　　　• The remising price of urban land is related to the location,

the regional economic development and the Infrastructure condition

the low standard of the compensation• Compared with the regulations in 2009, the new standar

ds of the compensation has been raised.• However, because of the low level of the original standar

d, the actual compensation only achieves 48000 yuan an acre for the I area, 43000 yuan an acre for the area, 3Ⅱ8000 yuan an acre for the area.Ⅲ

• In the long term, it is hard for the peasants to sustain a living.

the Defects of the Current Compensation System

Specifically, in Shaoyang:

It takes the landless peasants 8 or 9 years to get the compensation from the land so that they are unwilling to sell their land to the government.

Source ：邵国土资字〔 2013 〕 1 号文件

the Defects of the Current Compensation System the inflexibility of the compensation: Monetary resettlement has become the main method in the resettle

ment process and the compensation is given in lump sums

problems: a general lack of awareness about self pension among oeasants• The peasants wouldn't make a plan to spend the money properly, so

the money has been wasted in a short period of time re-employment difficulties• having weakness in elelmenatary education• being unskilled• most of their jobs are unstable• hard to find a suitable position in modern society and blend in to the

city　

4.the Economic Compensation Function　 The compsnsation should include: currency compensation ： the compensation for basic lif

e of the following years until the peasants get retired retirement security:ensuring the normal life of the peasan

tsnafter the retirement

currency compensation

It should contain these three elements:compensation for the loss of income(P1)unemployment benefits(P2)compensation for the land increment(P3)

compensation for the loss of income(P1)symbol• S1 ： wage income of the peasants before the land acqu

isition• S2 ： wage income of the peasants after the land acquisi

tion• I ： income from the land, directly and indirectlyhypothesis• S2=(12/9)*S1• household operating income=income from the land, directly and indirectly Therfore, P1=S1+I-S2 。

compensation for the loss of income(P1)data processing

资料来源：邵阳市 2012 年国民经济和社会发展统计公报邵阳市 2012 年国民经济和社会发展统计公报

compensation for the loss of income(P1)data processing

unemployment benefits(P2)

1999 "Regulations on Unemployment Insurance" the maximum period of receiving unemployment insuran

ce compensation: 24 monthsP2=24*M ， M: the rural minimum living guarantee standard in the stu

dying site In practice, M in Shaoyang is 98.7 yuan per month, so P2=98.7 yuan*24=2368.8 yuan

compensation for the land increment(P3) The current compensation way is a typical system that is

dominated by the government, so this compensation standard can not shed light on the land value accurately .

Pt*: the expected transfer price

Pt-1: land price when land takeover for public using occurs

Pt: the actual transfer price Pt-Pt-1=b*(Pt*-Pt-1),

b should be based on the actual situation of the land, such as its location, the regulation and the policy of the local government and the demand and supply in the market

P3=c*(Pt-Pt-1)=c*b*(Pt*-Pt-1)

0<c<1, because the land increment to some extent comes from the investment of the government and the society, so the peasnats cannot get all the increment of the land

retirement security

theoretical model empirical result

theoretical model

hypothesis• The landless peasants can acquire another job q

uickly after getting the employment subsidies.• The discount rate is constant• There is no uncertainties in the life expectancy

and working lives

0 n n+t

theoretical model

theoretical model

• k: the substituting rate of the pension• wn+t: the expected annual income of the peasants after retiring for t years• m=the extreme age- the retiring age

empirical resultparameter settings 　• n: 0~20 the age of the farmers which engage in the agricultural a

ctivities is probably between40 and 60, it would take them 0~20 years to get retired in theory

• m=105-60=45 according to the China Life Insurance Mortality Table(20

00-2003), the extreme age is 105• discount rate=0.35%(the current interest rates)

empirical resultparameter settings• probability of being alive (assuming the sex ration in SY is 1:1)　　

empirical resultparameter settings• k. k=pension per month/income per month=91.

69/(5136/12)=21.42%

empirical resultparameter settings 　• the future income

Source ：邵阳市 2012 年国民经济和社会发展统计公报邵阳市 2012 年国民经济和社会发展统计公报

empirical resultparameter settings 　

empirical result result the retirement security of the corresponding age is listed below:

empirical resultresult

5. Conclusion

accoeding to the function, the compsnsation should include:

currency compensationcompensation for the loss of income(P1)unemployment benefits(P2)compensation for the land increment(P3)

retirement security

6. References• 程文仕，曹春，杜自强，刘学录，徐波，岑国璋 . 基于市场决定理念下的征地补偿标准确定方法研究，中国土地科学， 2009 年第 9 期。• 熊联勇，农民失地成本函数及对土地补偿的启示，农村经济， 2008年第 9 期。• 赵燕妮，政府在农村社会养老保险制度中的财政责任，保险研究， 2012 年第 3 期。• 李俊，城镇化、老龄化背景下新型农村养老保险财务状况研究：

2011 年 ~2050 年，保险研究， 2012 年第 9 期。• 范宏斌，失地农民社会保障问题探析，农业经济， 2012 年第 5 期。• 赵国辉，失地农民养老堪忧 - 探索商业养老保险解决途径，中国保险，

2005 年第 9 期。• 邓大松，王曾，城市化进程中失地农民福利水平的调查，经济纵横，

2012 年第 5 期。• 丛旭文，黄晶梅，城市化失地农民的社会保障问题研究，求索， 2012 年第 3 期。