In the protection of cultivated land, it is important to define the boundary between government and market to improve the performance of the cultivated land protection policies and realize coordination between food safety, new industrialization, and new urbanization with low economic and social costs. Yet, it remains controversial whether cultivated land protection should merely rely on government, or market, or the combination. In addition, it remains unknown what kind of institutional arrangements will generate higher policy performance. There is no unique optimal provision model for any public service, which depends on the nature of the item. According to the characteristics of production and consumption, food security can be divided into different hierarchies. The institutional arrangements for cultivated land protection should be made according to the different hierarchies of food security and their production and consumption characteristics. It is difficult to determine whether government or market is better to provide public services as the advantages and disadvantages of both maybe mutually transformed under certain conditions. This study investigates different hierarchies of food security hierarchy and relevant production and consumption characteristics. According to the nature of food security at each hierarchy, the study defines the rational boundary between government and market by considering the needs of control and efficiency. In addition, this study also examines the applicability of centralized and decentralized governance models in cultivated land protection, and then puts forward the management system of cultivated land protection at the concrete operation level. This system facilitates to realize comprehensive cultivated land protection in terms of quantity, quality, and ecology and reduce implementation cost of ensuring food security and cultivated land protection. Due to low demand elasticity and low supply elasticity of ration and grain in domestic and foreign markets, ensuring the absolute safety of ration and the basic self-sufficiency of grain at the first hierarchy obviously has the nature of public goods. Therefore, strict control should be placed on cultivated land for ration and grain security. The central government should convert the existing intimate relationship management model into the alienated relationship management model, allot high quality and pollution-free cultivated land into the permanent basic farmland protection zone. Close monitoring should be conducted to ensure the quality and ecology of cultivated land assigned to the permanent basic farmland protection zone. After allotting, incentive mechanisms should be used to stimulate the enthusiasm of the local governments and farmers to manage and maintain permanent basic farmland. Under these circumstances, the productivity of permanent basic farmland can be continuously improved to effectively protect the absolute safety of ration and the basic self-sufficiency of grain. After ensuring the absolute safety of ration and the basic self-sufficiency of grain, food (e.g., beans, potatoes) security has the nature of quasi-public goods. When protecting cultivated land for food security at the second hierarchy, market can be properly used to improve the efficiency of resource allocation. Through developing a unified national farmland development rights transfer(FDRT) market, local governments can purchase sufficient amount of cultivated land protection in such a FDRT market while improving land use efficiency. The efficiency and legitimacy mechanisms can therefore complement each other and then under the economic incentive, political promotion incentive and ″triple supervision (which means comprehensive supervision from procurator authority, government, and NPC Standing Committee),″ it is possible to truly realize the quality and ecology balance of farmland occupation and supplement with appropriate economic incentive, political promotion incentive and ″triple supervision.″ After ensuring food (beans, potatoes) security, agricultural product (vegetables, fruits, animal products, etc.) security at the third hierarchy has the nature of private good, whereas market can play a fundamental role according to their production and consumption characteristics. The cultivated land with poor quality grade and the marginal cultivated land can be converted into other agricultural land without restrictions. It should be noticed that conversion from agricultural land to construction land should still follow the existing regulations. If meeting requirements of land use planning, construction land should also be allocated based on the market. Such a practice can improve the land use efficiency and further reduce the burden of cultivated land protection. This mechanism is a useful supplement to FDRT market and help to realize food security and sustainable economic development at a low cost. The central government strictly controls the permanent basic farmland to protect a certain amount of high quality and pollution-free cultivated land. The local government utilizes the FDRT market to realize the quantity, quality and ecology balance of farmland occupation and supplement. Marginal land and construction land are allocated through market to improve efficiency. Governments at all levels and market complement each other to ensure the absolute safety of ration, basic self-sufficiency of grain, food security and effective supply of agricultural products at low economic and social costs.