China will spend 20 billion yuan (2.6 billion U.S. dollars) on land consolidation this year, a senior official with the Ministry of Land and Resources (MLR) said on Wednesday.

Wang Shiyuan, vice minister of the MLR, said the doubling of fees on newly-added construction land had helped provide increased funding for land consolidation.

Land consolidation refers to the rational use of land, particularly to restructure agriculture. Parcels of land are consolidated to provide larger holdings. Land consolidation projects typically also include the construction of irrigation and drainage infrastructure to improve water management, the construction of new roads, land leveling, soil improvement measures, changes to land use and village renewal.

China doubled the land use fee on new construction projects in November 2006 amid efforts to tighten land control and cool down investment in the real estate sector.

China will strive to add 25 million mu (1.7 million hectares) of arable land through land consolidation by 2020, Wang said at a seminar held in Chengdu, capital of southwest China's Sichuan Province.

Around 200 million mu (13.3 million hectares) has the potential to be converted to arable land through land consolidation, but more than half of this land is located in drought-hit northwestern regions and hard to cultivate, Wang noted.

But he said that land consolidation projects were likely to be successful for at least 83 million mu (5.5 million hectares).

China is keen to retain no less than 1.8 billion mu (120 million hectares) of farmland to ensure food safety for its 1.3 billion population, he said.

This is critically important to China because massive urbanization and construction are swallowing up huge stretches of arable land, the deputy minister said.

China had managed to add 35.25 million mu (2.4 million hectares) of arable land between 1999 and 2006, of which 12.7 million mu came from land consolidation projects, Wang said.

He noted that, over the past seven years, the amount of newly-added arable land has proved to be greater than the land made available for construction projects.

Land consolidation was first initiated in Europe in the Middle Ages.