From the end of 1978, the Communist Party of China (CPC) and the State Council have begun to reform the rural land management system. At the end of 1983, the two-tier management system that combines centralized and decentralized management on the basis of household contractual management was established in rural China. The General Principle of Civil Law was the first law that acknowledged the household contractual management system. Since 1993, the Constitution began to acknowledge the household contractual management system. The Rural Land Contract Law comprehensively establishes the household contractual management system in respect of rural land. The Property Law provides officially the right to land contractual management as usufruct. After 30 years of development, more and more people recognize the defects of the household contractual management system. Since 1990s, due to a substantial reduction in the rural labor force, some households began to circulate the right to land contractual management to other units or individuals by subcontracting, leasing, exchanging, or other means. From 2000, under the background of circulation of the right to land contractual management, a number of f amily farms have been r ising in the rural areas of many provinces. Since 2008, the CPC Central Committee and the State Council promulgated several documents to support and encourage the development of family farms. The Ministry of Agriculture defines the family farm as a new agricultural management entity, which utilizes members of rural family as its main labor force, takes the agricultural management income as its main sources of income, uses the contracted land under household contract as well as land gained by circulation from other contractors to engage in large-scale, intensive and commercial agricultural production. According to a survey carried out by the Ministry of Agriculture in March 2013, the development of family farms has reached a certain scale, those family farms mainly engage in farming and breeding production, and the management scale of family farms is comparatively large. The family farm retains the core of the household contractual management system. It corresponds to the features of agricultural production and fits into the stage of economic and social development in China. It has become an effective strength to guide the appropriate scale management and to develop modern agriculture. Therefore, the family farm is regarded as the future direction of rural land reform in China. The State Council and many local governments have taken numerous policies and measures to encourage and support family farms. However, the development of family farms is also facing some difficulties. For example, how to distinguish the family farm from the large specialized household? Should all family farms be registered as enterprises? How to make family farms obtain a long-term and stable land use rights? How to make it easier for family farms to raise funds? How to develop ancillary services for family farms? These problems remain to be resolved properly in the future.