The Communist Party of China (CPC) issued a landmark policy document on Sunday to allow farmers to "lease their contracted farmland or transfer their land use right" to boost the scale of operation for farm production and provide funds for them to start new businesses.

The Decision on Major Issues Concerning the Advancement of Rural Reform and Development was approved by the CPC Central Committee on October 12 at a plenary session.

According to the full text of the document, markets for the lease of contracted farmland and transfer of farmland use rights shall be set up and improved to allow farmers to sub-contract, lease, exchange and swap their land use rights, or joined share-holding entities with their farmland.

Such transfers of land-use rights must be voluntarily participated by farmers, with adequate payment and in accordance with the law, the CPC Central Committee said.

According to domestic law, farmland is collectively owned, but meted out to farmers in small plots in long term leasing contracts. The new measures adopted are seen by economists as a major breakthrough in land reforms initiated by late leader Deng Xiaoping 30 years ago, which will avail farmers of opportunities to conduct scale management and new business operations.

When the document was drafted, some have argued that the new policy might create a few landlords and landless farmers who will have no means for a living. And arable lands to be used for non-farming purposes, might threaten the country's food safety.

To ease such fears, the CPC Central Committee also provided in the document that the country would carry out "the most stringent farmland protection system" and urged local authorities to firmly safeguard the 1.8 billion mu (120 million hectares) minimum farmland set line.

China is facing a sharp conflict between land supply and demand. The area of arable land shrank 610,100 mu in 2007 to 1.826 billion mu, only slightly above the government's set target.

The CPC Central Committee also called on local governments to stick to "the most stringent land conservation system" to strictly control the total scale of the land used for urban development.

The government would strive to double the per-capita disposable income of rural residents from the 2008 level to more than 1200 U.S. dollars by 2020, the Party document said.