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Since the 1980s a series of farmland policies have been implemented in China to stabilize the balance of farmland quantity and quality against accelerating urbanization and industrialization processes. This paper aims to reveal differences of soil fertility in the farmland occupation area (FOA) and farmland supplement area (FSA). In 1985–2000 the decline of the FOA area was 181,000 ha, but the FSA rarely increased. In 2000–2010 the decline of the FOA area was 824,800 ha, but the FSA increased dramatically. The accelerating loss process is closely related to urbanization and industrialization of the locations. Most occupied farmland was still located in the areas with higher soil fertility. The FOA in 1985–2000 had higher soil fertility than the FSA, but the FSA in 2000–2010 significantly raised its soil fertility to close to the FOAs’ level. The rate of excellent-good levels of the FOA in 2000–2010 decreased from 46.13% to 37.61%, The development model shifts and farmland policies implementation are the chief driving factors behind AFOS changes. The TDBF policy and the main function zoning project should continue to play an effective role in balancing the farmland system.