is equity. by keeping the communal ownership while privatizing land use rights, despite the remaining efficiency loss，this land tenure system allegedly could protect farmers from losing their land, and from getting worsening in income distribution in the wake of dismantling the commune system. however, the recently released research results evidence that farmers" income in general, and that of the grain-growing farmers in particular, have been deteriorating significantly relative to urban population. the rich farmers are reportedly migrating to urban areas, leaving poor farmers behind. obvious, the equity argument used in justifying the current land tenure system is not valid.

this paper argues that the communal ownership of land is one of the remaining institutional barriers that contribute to the relative impoverishment of farmers. under this system, the operation scale of a typical farm is determined by a household"s population share in a village. not owning land, they also cannot use it as credit collaterals. with difficulty in their access to both land and loans for the purpose of production expansion or production restructuring, how can one expect farmers to increase their income as fast as urban population who have access to all the factors of production? the reason that the grain-growing farmers are doing even worse among all the farmers lies in the fact that the former need much bigger operation scale than say that of vegetable-growing farmers. however, under the current land system, they have similar amount of land despite the fact that they can only grow two crops a year in most areas, but the vegetable-growing farmers can grow more than 10 crops within the same period.

obviously, the current land tenure system is incompatible with market principle and makes it hard for chinese farmers to fully benefit from economic growth by depriving them of access to land and credits. now that evidences show that the current land system fails to deliver equity to farmers relative to urban population, there is no reason not to reform this system that is inefficient anyway. give the rapid urbanization and industrialization that helps absorb more than 10 million rural people a year, the emergence of a growing poor and landless population is very unlikely. actually, the current land system is more likely driving the most capable and entrepreneurial farmers away from farming sectors through the reverse elimination. if not reformed, th

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