China said Wednesday a new rural farm policy was largely aimed at curbing illegal land grabs that have fuelled widespread discontent in the countryside.

China approved the major policy on October 12 to expand transfers of land-use rights held by farmers in a bid to boost rural incomes and maintain the nation's food security.

But a top official said a major thrust of the policy would be to protect peasants from being swindled or forced off land, a source of instability in the vast Chinese countryside.

"When land-use rights are circulated, it should be on a voluntary basis, we should not force or compel farmers to circulate land-use rights," said Chen Xiwen, a top financial and rural policy official in the Communist Party.

China sees tens of thousands of cases every year of poor farmers forced off their land for little or no compensation by developers seeking to expand industrial or residential projects.

Such incidents are a key factor in tens of thousands of protests, often violent, that erupt across China each year.

Chen acknowledged that poor farmers were at risk of manipulation due to ignorance over land regulations and that landless peasants were a stability risk.

"These people can be a source of instability," he told reporters.

He said China would have to come up with new guidelines and systems to protect the land rights of peasants, although he gave little insight into their potential shape.

"When farmers transfer their land rights this must be done voluntarily, through negotiations on an equal footing and with adequate compensation," he said, summarising the required protections.

He also sought to correct media reports — including in China's state media — saying the new policy gave farmers the power to trade, lease or transfer land-use rights for the first time.

Such rights were given years ago but only about five percent of land is "circulated" in this way, he said.

The government wanted to promote such land-use transactions because the migration of 220 million peasants to jobs in cities or coastal regions was leaving farmland underused, he said.