More than 40 percent of China's arable land is suffering from degradation, official news agency Xinhua said, reducing its capacity to produce food for the world's biggest population.
The rich black soil in northern Heilongjiang province, which forms part of China's bread basket, is thinning, while farmland in China's south is suffering from acidification, the report said, citing agriculture ministry statistics.
Degraded land typically includes soil suffering from reduced fertility, erosion, changes in acidity and the effects of climate change as well as damage from pollutants.
Beijing is growing increasingly concerned about its food supply after years of rapid industrialization resulted in widespread pollution of waterways and farmland.
The country, which must feed nearly 1.4 billion people, has already outlined plans to tackle soil pollution, said to affect around 3.3 million hectares of land.
But as rising incomes place growing pressure on its domestic resources to produce more, high quality food, it is also planning to tackle degraded soil, the report said.
The agriculture ministry wants to create 53 million hectares of connected farmland by 2020 that would allow it to withstand drought and floods better, said Xinhua. Larger farms are more suited to irrigation and other modern farming practices.
It also wants to strengthen the monitoring of arable land management and speed up the legislative process to protect farmland in order to ensure stable food production and farmers' incomes, the report added.
Currently protecting farmland is difficult as liability for soil contamination is hard to determine, experts say.
The government is drafting a new law to tackle this but it is not expected to be completed until at least 2017.