Wasteland auctions in rural China

Similar to many developing countries, Chinese provinces have large areas that are considered ‘marginal’, with limited potential for agriculture. Finding uses for these areas is an important aspect of rural development. One solution policy-makers have experimented with is transferring use rights through an auction system. This can allow for sustainable land management, while preventing the control of land by people with powerful financial interests. However, land allocation processes need to be fair and well managed.

Research from the Centre for Development Studiesat Groningen University, Holland, reflects on the successesand failures of the wasteland auction policy experiment. The research focuseson experiences in Ningxia Autonomous Region.

China has a huge land area that is categorisedas 'wasteland'. Much of this is not actually unused, but used informally forgrazing or forestry. In the 1990s, local policy-makers in parts of northern China held auctions for this wasteland.These auctions conferred use rights but not ownership rights. The main aims ofthis policy were to encourage activities that would promote soil and waterconservation and to alleviate rural poverty through appropriate income-generatingactivities on the 'wasteland'. The policy began as a local governmentexperiment in one province and spread to several other regions. 

The research identifies several important issuesrelating to the wasteland auction process:

• Theauction system worked well at first, but problems occurred when it increased inscale. Local governments applied the system in inappropriate ways. Negativeoutcomes included concentrated land use by officials or people with close linksto local government
• Auctionsallow urban entrepreneurs and cadres to gain access to rural land. This reducesthe rural-urban divide, but can exclude comparatively powerless rural people.
• Peoplewho organise auctions should not be able to gain any land, according to theAuction Law. This restriction was often overlooked.
• Leasingauctioned wasteland often incurs certain obligations, such as a duty to planttrees. These obligations were not always respected; in some cases, there isevidence that misuse of auctioned land has contributed to soil erosion.

The wasteland policy has often experiencedproblems at a local level because of conflicts between departments running theauctions, especially between departments responsible for the different types ofwasteland being auctioned. For example, there are often conflicts betweenAnimal Husbandry and Forestry departments. Policy-makers need to work together tolimit this kind of dispute. They should also consider the following factors:

• Thereis a danger that people with the resources to develop land are favoured overthose who have less to invest. If auctions are to relieve poverty, rules mustbe applied to ensure that poor people can also gain access to wasteland.
• Diversityin management structures should be allowed, corresponding to different types ofwasteland
• Itis important to avoid cadres and village elites taking too much wasteland.
• Contractsshould have the rights and responsibilities of using the land clearlyidentified.
• Improvementsto information flows about rights and processes will enable more people toaccess wasteland.

Wasteland auctions were a good idea, but theyspread too quickly in some areas.  They wereoften performed by higher levels of government in ways that ignored the interestsof villagers. For example, villages sometimes lost access to grazing land. Thisis a danger with good ideas and insensitive bureaucratic management. Oftenthere are incentives for administrators to carry out a particular policy, but ifthe policy is not well adapted to suit local realities, there will often be problems.