LAND COMPENSATION FOR FARMERS

The national auditor also discovered that about 5.12 billion yuan of compensation to farmers whose land had been expropriated was either not paid in time or embezzled.

The compensation was either not collected from land users to pay into social security accounts of farmers, illegally loaned out, or entrusted to financial institutions for investment, the report said.

The report revealed that about 689.88 hectares of land were illegally sold for business purposes, and 1,541.05 hectares of land collectively owned by farmers were built into golf courses or villas on leases, which is against government rules.

Some golf courses were illegally built after the central government prohibited the construction of new golf courses in January 2004, it said.

"The leasing of land owned by farmers could not ensure the long-term interests of farmers," Zhai said.

As the leasing of land by farmers was not protected by Chinese laws, farmers would not be able to secure their rents once the business operations went into trouble or the enterprises went bankrupt, he said.

"On the other hand, the land would not become suitable for farming in the short term once it is used for other purposes than farming," he added.

USE OF LAND PROCEEDS

Despite the problems, land proceeds were mainly used for stipulated purposes, the report said.

Among the total net proceeds, 210.83 billion yuan went to infrastructure constructions, 5.69 billion yuan was used to develop land in the countryside, and 2.85 billion yuan was paid into social security accounts of farmers whose land had been expropriated, according to the report.

The combined sum, 219.37 billion yuan, was about 83.8 percent of total net proceeds collected in the same period, according to Xinhua calculation.

The NAO also said local governments had started to correct some problems revealed in the 2007 auditing.

By the end of January, these 11 cities had retrieved 6.83 billion yuan of land proceeds that had been embezzled, loaned out, reimbursed or not duly paid, along with 293 million yuan of embezzled or unpaid land compensations.

(Xinhua News Agency June 5, 2008)