The Economic Compensation Function for the Landless Peasants in Shaoyang City

1. The Economic Compensation Function for the Landless Peasants in Shaoyang City Yiai Li, Linye Dai, Lei Shi, Yating Qiang, Qihui Zou

2. Outline • Background • Choosing the Study Site • the Analysis of the Current Compensation System • the Economic Compensation Function for the Landless Peasants • Concluion • References

3. 1.Background • Policy Context • Realistic Background

4. Policy Context • the "12th five-year plan" The government is aimed to • accelerate social development with the focus on improving people's livelihood, developing rural pension undertaking • try to promote healthy land development， protecting farmers' rights and interests

5. Realistic Background thespeeding of the urbanization current Land Management Law the strong demand of the land the problems in the current compensation system for the landless peasants large-scale land acquisition activities a new economic compensation function

6. 2.Choosing the Study Site --Shaoyang, Hunan • Tradition • Trend • Terrible Impacts

7. Tradition • 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 • 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

8. Trend municipal land for public facilities residential land the demand of the land use of land for urban roads, bridges and railways green spaces the expansion of the scale of the expropriation of the rural land

9. the cultivated land's quantity of the current years in Hunan Source：《2012年湖南省统计年鉴》

10. Terrible Impact • Contradictions 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

11. 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 System • the unreasonable calculating standards • the low standard of the compensation • the inflexibility of the compensation

12. the Current Compensation System • "Land Management Law" Compensation fees for land requisitioned include land compensation 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 made 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

13. the Current Compensation System Specifically, 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》

14. the Defects of the Current Compensation System • the unreasonable calculating standards • The current compensation is based on the average production value of the land in the recent years • There is no united exhaustive explanation of the calculating standards, seeming unconvincing • The remising price of urban land is related to the location, the regional economic development and the Infrastructure condition

15. the Defects of the Current Compensation System • the low standard of the compensation • Compared with the regulations in 2009, the new standards of the compensation has been raised. • However, because of the low level of the original standard, the actual compensation only achieves 48000 yuan an acre for the I area, 43000 yuan an acre for the Ⅱarea, 38000 yuan an acre for the Ⅲ area. • In the long term, it is hard for the peasants to sustain a living.

16. Specifically, in Shaoyang: Source：邵国土资字〔2013〕1号文件 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.

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

18. 4.the Economic Compensation Function The compsnsation should include: • currency compensation：the compensation for basic life of the following years until the peasants get retired • retirement security:ensuring the normal life of the peasantsnafter the retirement

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

20. compensation for the loss of income(P1) • symbol • S1：wage income of the peasants before the land acquisition • S2：wage income of the peasants after the land acquisition • I：income from the land, directly and indirectly • hypothesis • S2=(12/9)*S1 • household operating income=income from the land, directly and indirectly Therfore, P1=S1+I-S2。

21. 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

22. compensation for the loss of income(P1) • data processing

23. unemployment benefits(P2) • 1999"Regulations on Unemployment Insurance" the maximum period of receiving unemployment insurance compensation: 24 months • P2=24*M， M: the rural minimum living guarantee standard in the studying site • In practice, M in Shaoyang is 98.7 yuan per month, so P2=98.7 yuan*24=2368.8 yuan

24. 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

25. retirement security • theoretical model • empirical result

26. 0 n n+t theoretical model • hypothesis • The landless peasants can acquire another job quickly after getting the employment subsidies. • The discount rate is constant • There is no uncertainties in the life expectancy and working lives

27. 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

28. empirical result • parameter settings　 • n: 0~20 the age of the farmers which engage in the agricultural activities 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(2000-2003), the extreme age is 105 • discount rate=0.35%(the current interest rates)

29. empirical result • parameter settings • probability of being alive (assuming the sex ration in SY is 1:1)

30. empirical result • parameter settings • k. k=pension per month/income per month=91.69/(5136/12)=21.42%

31. empirical result • parameter 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

32. empirical result • parameter settings

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

34. empirical result • result

36. 5. Conclusion • accoeding to the function, the compsnsation should include: • currency compensation • compensation for the loss of income(P1) • unemployment benefits(P2) • compensation for the land increment(P3) • retirement security

37. 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。

38. Thank you!