China agrees land reform package

Many farmers leaving villages switch land in informal arrangements

China's Communist Party leaders have agreed a package of rural reforms that could shape the country's economic policy over the coming years.

A four-day enclave including President Hu Jintao had approved "major issues" on reform, Xinhua news agency said.

No details were given but it is thought farmers will now have more power to transfer or rent out their land.

Leaders have said they want to lift the income of China's 740m rural population to boost growth and ease social unrest.

"The Communist Party of China Central Committee on Sunday approved a decision on major issues concerning rural reform and development," Xinhua said.

Small farms

Its commentary added: "The global credit crisis freezing up the world's finances may be a blessing in disguise for China as it aims to modify its economic structure after three decades of breakneck growth."

Mr Hu recently visited a village where farmers are leasing land

The third plenary session of the 17th central committee was discussing what analysts say could be one of the most significant political reforms in three decades.

Reports suggest a key consideration was to enshrine in law the rights of rural citizens to transfer or rent out their land leases to other individuals or companies.

Since the break-up of massive communal farms three decades ago, individual families have been permitted to farm their land under 30-year government contracts.

The farms are small, however, averaging about 1.66 acres (0.67 hectare) in size, according to government figures, making it hard to run the farms profitably.

To maximise production, many farmers swap chunks of land to be held in common by the village.

People leaving the village to work in richer coastal areas often lease farming rights to others in informal arrangements.

State media in recent days have been extolling the "success" of new farming arrangements in places such as Xiaogang village in Anhui province.

Mr Hu recently visited the village, where farmers are leasing their land to other farms or companies to run, for example, a pork farm and a vineyard.

Tens of millions of farmers are still effectively excluded from the country's recent decades of rapid growth and the new wealth it has brought.

Chinese economic growth slowed in the second quarter of 2008, constrained by slowing demand for exports, rising prices and the high cost of credit.