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Securing jobs for surplus laborers in rural China

MA LIUHUI | 2017-05-15 | Hits:
(Chinese Social Sciences Today)

Villagers work at an oil sunflower farm at Xincheng County, Jiayuguan City of northwestern China’s Gansu Province.

Large-scale industrialization and urbanization since China’s reform and opening up have driven the migration of the rural labor population, relieving the tension between the population and the land while creating the structural prerequisite for land rights circulation in rural areas as well as development of modern agriculture.   

Meanwhile, institutional design and policy arrangement at the national level have further removed the practical barriers to land rights circulation. By the end of 2016, the use rights of more than one-third of China’s farmlands had entered circulation. Various types of agricultural businesses have begun to emerge.

For a long time, land rights circulation has been a key component of revitalizing the rural economy, improving agricultural business and increasing farmers’ incomes. However, not all of the rural population can benefit from circulation. More importantly, the limitations of agricultural income and the risks in agricultural production hamper the potential economic benefits created by land rights circulation. The rural surplus population, a fragile group in rural society, is impacted in the process of circulation.


Surplus population
Generally speaking, within the social system, where the market plays a dominant role in allocating resources, labor, as a production factor and commodity, is voluntarily transferred to industries with high returns.

According to this theoretical framework, one might conclude that the surplus rural labor population has already been entirely absorbed by non-agricultural industries given the great disparity of income between agricultural and non-agricultural sectors. In other words, there is not a surplus labor force in rural China but rather a left-behind population that results from urbanization’s failure to keep pace with industrialization.

However, the reality is not as perfect as the theory. Field investigations suggest that in addition to the commonly known left-behind population, there is also quite a large surplus population, whose living conditions are vital to the harmony and stability of rural China.

Currently, two types of surplus population exist in rural China. The first type is the population seriously constrained by family, which hinders a worker’s ability to move out of villages and work in cities. The resource endowment of this type of population is adequate, which means they have the ability to work in cities. But the fact that they have to take care of the family members who are either children, elderly or handicapped, limits their career choices. Choosing the overall interests of the family, they forgo their chance to maximize economic benefit by working in urban areas.

The other type of surplus labor population is more influenced by macroeconomic changes. In the process of eliminating backward production capacity, migrant workers formerly attached to obsolete industrial sectors lose their jobs. In addition, most cities limit the development of informal economies to control the urban population. Influenced by these two factors, migrant workers who no longer have the advantage of age and skills, have to return to rural areas. These surplus laborers have not yet reached the age of retirement and are denied access to non-agricultural sectors by industrial structural adjustment and urban governance. The lack of industrialization in hometown regions does not provide them with new jobs. 

Surplus rural laborers cannot get wage incomes, because they are unable to work outside villages. However, they once were able to make a living by household land contracting within the land rights system in rural areas. Before the maturation of the land rights circulation market, a part of surplus labor population could also increase family income by purchasing, at a low price or free, the use rights of lands from relatives or neighbors. Odd jobs also provided them with incomes to support their families. However, the pluralistic pattern of making a living for the surplus labor population has been broken by large-scale land rights circulation.


Limited new jobs
During the process of large-scale land rights circulation, surplus laborers face a lack of employment opportunities and a sharp drop in family income.

First of all, land rights were once transferred from those choosing to work outside villages to the surplus rural labor force. But new agricultural business entities, with their ability to pay higher rent, end this possibility. New agricultural business entities have huge amounts of capital and can get all kinds of agricultural funds from government agencies at all levels. Surplus laborers cannot compete with these new businesses in terms of rent.

Secondly, large-scale land rights circulation creates limited job opportunities, benefiting few surplus rural laborers. In order to prevent various risks and insure steady benefits, new business entities often continue to grow grain in the lands they rent from farmers. In this way, they can maximize the use of agricultural machines, reducing labor costs. On the other hand, food security is a national matter. Grain production is protected by national minimum purchasing price mechanism and is supported by various preferential policies. Therefore, large-scale circulation creates limited job opportunities. Even if there are some jobs created in the production chain, they are seasonal and temporary.

Last of all, land circulation requires integrated agricultural production planning, which forces surplus rural laborers to transfer their lands. For the purpose of convenient production and the construction of agricultural infrastructure, new agricultural businesses expect the lands they rent to be concentrated and contiguous. The lands kept by surplus laborers, which are “enclaves” within agricultural planning, obstruct businesses’ integrated agricultural planning. Theoretically, this contradiction can be solved by adjusting or exchanging certain land locations.

However, to adjust to large-scale agricultural production after land circulation, roads for agricultural machinery and irrigation systems are reconstructed, destroying the original infrastructure that served scattered farmers, inconveniencing the surplus laborers whose lands are shifted to marginal areas. Eventually, they have to give up their lands.

As we can see from these analyses, surplus rural laborers are not only unable to increase incomes through renting other villagers’ lands or to fairly compete for the scarce opportunities created by large scale agricultural production but also are eventually forced to transfer their lands. With their ability to work in cities hindered as well as the channels to convert their labor into money obstructed by large-scale land rights circulation, the surplus laborers face the danger of impoverishment.


Transforming surplus population           
Society used to pay great attention to the situation of the left-behind population. However, the left-behind population faces less obvious pressure now that some members of families are migrating to work in cities. And the surplus rural laborers are comparatively more fragile. These people should be protected by including them into the framework of social policies in rural areas, and ensured a decent life.

First of all, the surplus population should be fostered as new agricultural business practitioners and provided with opportunities to share in the benefits of agricultural development. Though various factors hinder their entry into non-agricultural sectors, surplus rural laborers have advantages in conducting agricultural business. Local governments should give preference to the surplus rural population when fostering new business entities. Supporting measures should be adopted, making it possible for the surplus population to make a living through agricultural business.

In addition, the agricultural industrial structure should be adjusted, increasing its capacity to provide jobs to the surplus labor force. The agricultural supply-side structural reform indicates that the development of future agriculture will transform from valuing total supply to improving agricultural product quality. The production of grains, which generates little added value, is problematic not only in terms of increasing farmers’ incomes but also with regard to creating enough jobs for farmers. Therefore, various new agricultural businesses, especially agricultural companies and large-scale grain-production households, should adjust the industrial structure in a timely fashion according to market demand and conduct more sophisticated production. New agricultural business should meet, to the maximum extent, the job demands of surplus population after land rights circulation and absorb as many farmers as possible.

Last of all, the support system of social policies should be improved, exploring the self-development capacity of the surplus laborers. In addition to improving the self-development of the surplus labor force by engaging them in agricultural sectors, local governments and social organizations should make targeted policies based on the actual situations of the surplus rural population. By exploring the specialties and potential of these people, for example, in developing local handicraft industries, the local governments may help them help themselves.  

Ma Liuhui is from the Social and Public Administration School, East China University of Science and Technology.