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Promoting Theoretical and Institutional Innovation and Making Further Progress in Issues Relating to Agriculture, Rural Areas and Farmers


By Han Jun, Development Research Center of the State Council

Research Report No 210, 2012 (Total 4212)

I. The Golden Decade for Hundreds of Millions of Farmers

Since the 16th National Congress of the Communist Party of China, China has made remarkable progress in issues relating to agriculture, rural areas and farmers. China's overall agricultural productivity has increased substantially, farmers' living standards have been significantly raised, important headway has been made in modernizing agriculture and building socialist new rural areas, and the balance between urban and rural economic and social development has been greatly advanced. The past decade has witnessed a historical period in which agricultural development was at its best, rural areas took on a new look and farmers benefited most.

In summary, achievements relating to agriculture, rural areas and farmers are mainly demonstrated in the following five aspects:

1. Substantial increase of overall agricultural productivity

Since 2004, China's grain output has increased continuously for 9 years, and food security has been reliably ensured. In 2011, the grain output rapidly increased to 571.121 million tons. In 2012, the grain output reached another historical high. The outputs of cotton, oil, sugar, meat, eggs and milk have made a new breakthrough, and there were abundant supplies of various kinds of agricultural products.

2. Continual increase in farmers' income

Due to the combined effect of various factors, the income of Chinese farmers has realized a rapid growth for 9 years in a row. Since 2003, the average annual growth has exceeded 8%. Farmers' income structure experienced remarkable changes, with the sources of income growth further diversified and wage income becoming a major source of income. Migrant work has become an important means for farmers to increase their income. The proportion of wage income in farmers' per capita net income increased from 36% in 2005 to 41% in 2010; between 2005 and 2010, the average contribution of wage income to farmers' income growth reached 47.2%. Rural migrant workers' continuous wage income growth has played a significant role in reducing urban-rural income gap. Along with farmers' income growth and improvement in rural market circulation, and under the national policy to spur rural consumption, rural consumption demand rose significantly, and farmers' living standards improved continuously.

3. Rapid development of rural social services

Firstly, the 'two exemptions and one subsidy' policy (i.e. the policy to exempt rural students in compulsory education from poor families from paying tuition and miscellaneous fees, and to provide living subsidies for boarders) concerning rural compulsory education has been fully implemented and the rural compulsory education has made significant breakthroughs. Secondly, the three systems, namely the new rural cooperative medical system piloted in 2003, the minimum subsistence allowances system fully established in 2007 and the new rural pension scheme piloted in 2009, realized full coverage in 2012; other social security schemes such as rural five guarantees (i.e. the five guaranteed forms of support including food, clothing, housing, medical care and burial expenses for old, weak, orphaned, widowed or disabled rural residents who are unable to work and have no family support.) also rapidly developed and advanced; with the implementation of government responsibility in rural residents' social security, the rural social security framework was basically formed. Chinese farmers' wishes over the past thousands of years, i.e., 'being provided for at old age', 'being properly treated when ill', and 'being assisted while in difficult circumstances', have indeed come true. Thirdly, notable progress is made in construction of water, electricity, roads, gas and Internet infrastructure in the rural areas.

4. Continuous reinforcement of the policy of strengthening agriculture, benefiting farmers, and enriching rural areas

Firstly, in order to guarantee food market supplies and secure grain growers'' benefits, the State has implemented the minimum purchase price policy for rice and wheat since 2004. The State gradually and substantially raised the minimum grain purchase price over the years. In 2008, in response to the price decrease and 'difficult sale' of certain agricultural products, temporary procurement and storage measures have been taken for corn, soybean, rapeseeds and so on in the major producing areas. Secondly, various agricultural subsidy systems have been gradually established. In 2002, the State launched the subsidies pilot policy for improved soybean varieties. At present, subsidy categories have extended to paddy rice, wheat, corn, rape, cotton, potatoes, peanuts, highland barley, pigs, dairy cattle and so on. Among them, subsidies for growing improved varieties of paddy rice, wheat, corn and cotton have realized full coverage. In 2004, in order to accelerate agricultural mechanization, subsidies for purchase of agricultural machinery and tools were established, farmers who purchased advanced agricultural machinery and tools would be granted subsidies, and categories of subsidized agricultural machinery and tools kept increasing, and the amount of subsidies also increased. In the same year, the central government took a portion of the Grain Risk Fund to subsidize grain growers directly. In order to relieve the impact on grain production caused by price increase of agricultural capital goods such as fertilizer and diesel, in 2006, the central government launched the integrated subsidies policy for agricultural capital goods. These four direct subsidy measures for farmers became a crucial component of China's current agricultural subsidy policy. In 2011, the central finance spent RMB140.6 billion yuan on the above mentioned direct subsidies. Since 2007, agricultural insurance premiums subsidies have been implemented. Various direct subsidy policies, which played a significant role in mobilizing farmers' initiative to grow grains and in promoting continual annual increase in grain production and farmers' income, were wholeheartedly welcomed by farmers across the country.

5. Major progress in rural reform

Firstly, from the pilot measures made in 2000 to overall implementation in 2003 and then to the complete abolishment of agricultural tax in 2006, it took 6 years for the agricultural tax reform to terminate the 2600-year-old practice of 'paying grain tax to the government'. Concomitant reforms of town and township government bodies, rural compulsory education, county and township financial management system, and the like were steadily advanced. The state-owned farm tax reform, rural debt dissolution, educational debt dissolution and the like were launched. Secondly, in 2004, grain purchase and sales markets were fully opened with price control relaxed. Thirdly, the reform in tenure of collective forests made major breakthroughs, and the reform goals of clearly defining the property rights and implementing the household contracting system were basically achieved. Fourthly, rural financial reform made certain progress. Signified by the full transfer of management and risk responsibility to provincial governments, the first stage of management system reform went through successfully for rural credit cooperatives, and new strides were made in the reform of their property rights system. Agricultural Development Bank provided loans for a wide range of rural economic sectors, including farming, forestry, livestock husbandry, side-occupation, fishery, their related productions, processing and commercialization activities, agricultural science and technology and so on. Reform of the Agriculture Bank of China was carried out, and the Bank oriented its service towards agriculture. Experiments were made on a new type of rural financial institutions. Some places began to explore ways to build a rural credit guarantee mechanism supported by the government and participated by enterprises and banks. Fifthly, significant progress was made in protecting rural migrant workers' legitimate rights. Since 2006, major laws and regulations, including Guidelines of the State Council on Solving Migrant Workers Problems, Employment Promotion Law of the People's Republic of China, Labor Contract Law, Social Insurance Law, Labor Disputes Mediation and Arbitration Law and so on, have been successively promulgated, and amendments have been made to Regulations on Work-related Injury Insurance, so that a proper legal framework was formed to address rural migrant workers' problems. The problem of delayed wage payment to migrant workers was gradually solved, and migrant workers' labor management was regulated in accordance with the law. Migrant workers' access to vocational skill training, employment guidance, social security, and such services as education of their children, family planning, disease prevention and so on have been significantly improved.

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