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Background Information on Stable Growth in Agriculture and Sustained Increase of Farmer’s Income

DATE:2011-12-27       SOURCE:

The Central Committee of the Communist Party and the State Council have attached great importance to the work of agricultural issues. Since 2004, No. 1 document by the Central Committee which gives guidance to the work of agriculture and rural areas has been released for the past 6 years in a row. The Third Plenary Session of the 17th Party Congress has made in-depth research and overall programming on promoting the reform in rural areas under the new situation, and gave priority to the strengthening of agriculture while dealing with financial crises, increasing domestic demand and ensuring the growth. The local governments and departments concerned of various places have earnestly implemented the stated policy for agriculture. They have made concerted efforts and carried out concrete work, and successfully responded to chandelles such as drastic changes of international and domestic economic environment, the turbulence of world agri-produce markets, big increase of agri-material prices, the occurrence of natural disasters and emergencies. Agriculture and rural areas have achieved sustained growth with remarkable progress being made, and modern agriculture and the building of new countryside have been preceded with new achievements.


I. Summary of agricultural growth and increase of farmer’s income in 2008


1. The overall and unit yield of grain have surpassed the historical level. It is estimated that the total yield of grain in 2008 reached 528.5 million tons, an increase of 5.4% to 26.9 billion kg, and 3.2% higher than the historical level of 1998. We have realized the yield increase of 5 consecutive years for the first time over the past 40 years with unit yield surpassing 330 kg, 15kg higher than the 2007 level in history. This has been the first time in terms of the unit yield of reaching historical high level over the past 5 years in a row since the founding of the People’s Republic of China. The growth of unit yield has made contribution of over 80% to the total increase of production, which has been the highest level in 5 years. 13 grain producing provinces (regions) has contributed more than 80% to the total increase. An overall harvest has been obtained in terms of summer crop, early rice, and increase of seasonal crops, rice, wheat, corn as well as soybean.


2. Ample supply of major agriculture products has been achieved. The production of oil bearing crop has rebounded significantly. The annual supply of edible oil has reached 9.7 million tons, improving China’s self-sufficiency of edible oil by 2.2% and reversing the sliding production since 2000. Meanwhile, the pig production recovered quickly. The pig production reached 463 million at the end of 2008, up by 5.2% over the previous year. 608 million pigs were delivered to slaughter houses, up by 7.6% over the previous year. Poultry, egg and dairy production continued to grow while beef and mutton production remained approximately the same as the previous year. The output of fishery products, cotton, sugar, vegetables, fruits, tea, silkworm cocoons, floral products, and forestry products grew steadily, providing sufficient supply to the market. Besides, the quality and safety of agricultural produce improved steadily.


3. Farmers’ income has maintained a relatively high growth for 5 years in a row. The per capita net income among farmers in 2008 reached 4761 RMB, achieving an increase of 621 RMB or a real growth of 8% over the previous year. Their income from sale of agricultural products, salary, property and government transfer program continued to grow. The annual growth of farmers’ income remained higher than 6% for 5 years in a row, which has not occurred for more than 20 years in the past. The increase of the per capita income of farmers for the late 5 years totaled 2000 RMB, averaging an annual growth of 400 RMB. There has not been a precedent of such growth in China’s history.


4. Agricultural infrastructure construction progressed steadily. A number of important agricultural projects are being carried out smoothly, including the building of large commercial grain production bases, high-quality grain industry project, variety improvement for crop and animal production, animal and plant protection project and so forth. Efforts were intensified in land preparation, transformation of low and medium-yield land, and construction of high-standard farms and irrigation works. The agricultural mechanization picked up speed. The total mechanical power for agriculture reached 800 million Megawatt, up by 4% over the previous year. Plowing, sowing and harvesting operations on 45% of all farms have been mechanized. The innovation, application, and extension of technology have accelerated, and the project to extend agricultural technology to farm households is being carried out extensively. The rural market system and agricultural information system kept improving. The implementation of “Village and Township Market Project” was in full swing in 2008.


5. Rural reforms have been furthered. The rural comprehensive reforms have been pushed forward. The reform of collective forest rights has been launched and other reforms have all achieved certain success. Currently, systems for agriculture subsidies, agricultural price-support programs and compensation for requisition of land have been improved; public finance system that cover both urban and rural areas, social security system and an employment system that grants equal rights to urban and rural laborers are now under way. Rural reforms have entered a new stage featured by major institutional changes and improvement. 


6. Public services in rural areas developed quickly. As the central government has included the full cost of compulsory education in rural areas in its budget, rural students are now able to receive compulsory education and teaching books for free. A number of projects have been carried out to grant access to broadcast and television to every village, and build movie stations, township cultural centers and farmers’ libraries. The new rural cooperative medical care system has now covered the whole nation. This goal was reached 2 years ahead of the original plan. Minimum living standard guarantee system has been established, and new progress has been made in social security system for farmers affected by government land requisition. Infrastructure construction including water, electricity, roads, and gas facilities has picked up speed, and remarkable changes have taken place in village landscape. New achievements have been made in poverty alleviation through development. Administrative organization, democracy and legal system at the grass-root level have been improved, resulting in harmony and stability in rural areas.


7. Distinct success has been obtained in prevention and control of major animal diseases. Due to frequent outbreaks of animal diseases in neighboring countries, virus mutation in certain affected areas, and natural disasters, China had to meet greater challenges in prevention and control of major animal diseases than those in the past. However, in spite of all these, China had a vaccination density higher than 95% against foot and mouth disease, avian influenza, PRRS, and swine fever. 85% of the vaccinations produced effective post-vaccination antibody. Both figures reached record-high level. The number of PRRS cases has dropped by 97.5% while the number of avian influenza cases has dropped by 60.9%, on a yearly basis, to the lowest level in past several years.


The good situation in agriculture and rural areas in 2008 became an outstanding point in social and economical development, which provided important support to the Party and government in terms of successfully carrying out big events, appropriately dealing with difficulties, effectively countering against financial crisis and maintaining stable and rapid growth of national economy, and made great contributions to overall society and economic progress. The achievements in agricultural and rural development were hard-earning. Last year, intensified efforts were made mainly in the following areas: First, enhance the support to policies in relation to strengthening and benefiting farmers. It is estimated that financial expenditures by the Central Government related to agriculture, rural areas and farmers totaled 595,55billion yuan, a year-on-year increase of 163,75 billion, up by 37.9%. The increased amount and rate both ranked a historical high; with the lowest purchasing price of wheat and rice was raised three times and the temporary policy for major agricultural product collection and storage adopted. Second, unswervingly put emphasis on the production of grain and other major agricultural products, practically conduct inspiring activities to promote grain yield, continue the implementation of key projects such as quality grain industrialization, foster the production of oil-bearing crops and continuously support the recovered growth of pig farming. As a result, production of grain and “vegetable basket” gained stable growth. Third, response to emergencies effectively. When countering low-temperature, sleet and frost disaster, emphasize was put on rape field management and rush seeding and compensation seeding of vegetable; when countering Wenchuan earthquake, emphasize was placed on rush harvest and seeding in disaster-stricken areas, particularly safe handling of dead animals and control of animal disease; when dealing with baby milk powder issue, emphasize was placed on feed regulation, dairy station rectification and support to dairy industry so as to minimize the losses. Fourth, do every thing possible to develop more channels to increase farmers’ income, explore the potential of value-added agriculture production, encourage industrialized agriculture operation and enhance the link between production and marketing; proactively develop the secondary and tertiary industry in rural areas, and assist the transformation and upgrading of town and village enterprises; carry out farmer’s training programs on large scale, protect the legal rights for rural migrant workers and support migrant workers who will start their own business after returning to countryside; adopt new poverty alleviation polices and intensify poverty alleviation efforts through development. Fifth, accelerate the progress of ago-technology and promote the transformation of agriculture development mode. Sixthly, further push forward rural reform and speed up the innovation of rural institution and mechanism.


II. Difficulties and challenges


After 30 years of reform and development, agriculture and rural economy is positioned at a new historical point with unprecedented opportunities. However, agriculture is still the most vulnerable sector in national economy, developing rural areas is still an arduous task in building an overall well-off society, and farmers are still the group of people requiring much care and support. It is a significant mission to realize sound and rapid development of rural society and economy, and there is a long way to go. Particularly, at present, the international financial crisis has kept expanding and world economy has witnessed an obvious slowing down, which also produces impact on our agriculture and rural economy. Therefore, it will be more difficult to maintain stable growth in agriculture and realize the sustained increase of farmers’ income.


Firstly, it is a rather arduous task to maintain stable agricultural and grain production. The major agro produce including grain has kept growing every year and the cardinal number of output has risen constantly. However, the foundation to develop agriculture remains vulnerable and problems are getting more serious, such as reduced farmland, shortage of fresh water, backward water conservation facilities, and outflow of agricultural resources’ elements like funding and labor, etc. Beginning from the latter half of 2008, prices of agro products went downward and the trend seemed to be continued, which negatively affected farmers’ enthusiasm by a large extent. Meanwhile, since late October, 2008, wheat planting areas in north China has experienced continuous dry weather with rare rainfall. The drought disaster, which has lasted for a long period of time, affected wide-ranging areas and brought serious harms, is rarely seen in history and has jeopardized the winter survival and growth of wheat, and also threatened summer grain production for 2009.


Secondly, the employment outlook for migrant workers remains grim. The international financial crisis has hit heavily on the Chinese enterprises, particularly labor-intensive and export-oriented medium and small-scale enterprises, leading to big number of flow of migrant workers returning to countryside. Based on the investigation by the national rural affairs observation sites, the total number of rural labors being employed in urban areas in 2008 has increased 4.78 million, an increase of 3.6%, but a 2.4% slowdown than previous year, which is the slowest growth since the new century. Currently more than 20 million migrant workers are facing the difficulties of employment. 


Thirdly, it has become more difficult to further increase farmers’ incomes. Despite of fast growth of farmer’s income for 5 consecutive years, absolute income gap between urban and rural residents has exceeded 10,000 yuan with ever widening urban-rural income ratio. Price trend of agricultural products and the employment outlook for migrant workers can not be optimistic for the future, which will exacerbate the difficulty than ever to keep rural income growing.


Fourthly, quality and safety of farm-produce is facing new challenges. In recent years, quality and safety of farm-produce have been improved steadily in China.  Farm-produce on the whole is safe. However experiencing a special transition shifting from traditional farming to modern farming, it’s very difficult to put standard production and regulation in place, and much more efforts are needed due to small-scale and dispersed operation, multi-links concerning pre, during and post-production, as well as preliminary stage for construction of regulation over farm-produce quality and safety.


While estimating fully the difficulties and challenges ahead, we should also be aware of many favorable conditions and positive forces for agricultural and rural development. Adhering to the work related to agriculture, rural areas and farmers, a top priority has been given to the work by the Party.  The Central Economic Work Conference and Central Rural Work Conference have made further programming for agricultural and rural development in 2009 after the 3rd Plenary Session of 17th Central Committee of the CPC which mapped out an overall plan to advance rural reform and opening-up. Recently, the CPC Central Committee and the State Council jointly issued decisions on promoting stable development in agriculture and ensuring the continued growth of income of farmers for 2009 (No.1 document in 2009), thus  intensifying efforts in further supporting and protecting agricultural and rural development. The sustained and rapid development of agriculture and rural economy over the past 3 decades since rural reform, especially since 16th National Congress of CPC, has also laid a solid foundation in meeting various challenges effectively. 


III. Plan for Major Work in 20093. Expand channels for income generation, and promote steady increase of farmers’ income. 


It is of special significance to have good performance in maintaining steady agricultural development and keeping the incomes of farmers increasing. Rural areas have the greatest potential for expanding domestic demand; agriculture is the foundation of a faster growth of economy; and the focus for securing a better livelihood of the people is on farmers, and the difficulty in doing so is also with farmers as well. In 2009, to maintain a steady and relatively rapid agricultural and rural economic growth is taken as the priority task for government work related to agriculture and rural areas. Led by stabilizing grain production, raising farmers’ income, strengthening agriculture as the foundation of the economy and placing people’s livelihood as a top priority, and by further improving policy measures to support and benefit agriculture, strengthening scientific support, increasing investment, upgrading industrial structure, and advancing reform and innovation, the government will try all possible means and ways to maintain national food security and effective supply of major farm produces, and work all out to promote a sustained growth of farmers’ income in order to provide strong support to achieve a sound and fast social and economic development.


1. Intensify policy support and increase investment. In 2009, the central government will continue to increased allocations for agriculture, rural areas and farmers. Farm subsidies will go up. The direct subsidy to grain farmers and the comprehensive input subsidy will be raised, where RMB 86.7 billion yuan have already been allocated in advance by now. Subsidies for improved varieties will cover all improved varieties of rice, wheat, corn and cotton, and the subsidy scope will be expanded in rapeseed and soybean. The subsidy for farm machinery purchasing will go up to a mount of 13 billion, registering a rise of 9 billion yuan over last year. The minimum grain-purchasing price will continue to be increased by about 16% for rice. The national reserves for grain, cotton, food oil and pork will be expanded, and temporary purchase and storage of major agricultural produces will be use when it is needed. The share agriculture and rural areas takes up in the budgetary fixed asset investment will be bigger, the fund from the sale of newly issued treasury bonds will be in favor of agriculture and rural areas, incremental revenue coming from the raised arable land use tax rate will be allocated to agriculture, and the increased revenue from urban maintenance and construction tax will mainly be used in rural development planning as well as infrastructure development and maintenance. The counterpart funding at or below county level will be forgiven for public construction programmes such as risk-removing and reinforcement of reservoirs that are in danger in the central and western regions, eco-conservation, access to safe drinking water in rural areas and facility revamping in large and medium size irrigation areas; and efforts will be sped up to abolish match fund practices for risk management fund in major grain producing regions. Rural financial services will be strengthened, new deposits in financial institutions of the county territory banking system will be mainly used in providing loans to the locals, and development of policy-supported agricultural insurance will be accelerated.


2. Strive for steadily development of grain and agricultural production to ensure effective supply of major farm produce. We will firmly implement the guideline of the mid- and long-term national plan for food security, and will give high priority to grain production with unrelenting efforts. We will implement the strictest possible systems for protecting farmland and saving and intensive use of land, and try to keep the grain acreage at around 1.6 billion mu. We will materialize the national program for capacity building to increase grain output of 50 billion kg, and intensify efforts to carry out major programs such as the quality grain production programme, plant protection programme and seed programme. We will step up governor’s accountability in delivering sufficient food, and gradually establish effective monitoring, inspection and performance appraisal system for food security. We will promote the production of oil-bearing crops and endeavor to raise the self-sufficiency rate of edible vegetable oil by over one percentage point. We will continue to press for establishment of competitive and special farm produce belts. We will make up efforts to promote standardized animal farming of scale, strengthen the breeding system, and follow the Guidelines for Invigorating Dairy Industry for a sound development of livestock industry. We will promote healthy aquatic farming practices across the country, and expand the scale of multiplication and restock. At the present stage, every effort is exerted to spring field management with drought alleviation at the core. Our determination is made to win the tough battle against the severe drought and promote spring field management for good harvest; and strive for minimum decrease of production in heavily affected regions, no decrease in lightly affected regions, and maximum increase in drought-free regions, and ensure land preparation and spring plough for a sustained growth of grain production of the whole year.


3. Expand channels for income generation, and promote steady increase of farmers’ income. To this endeavor, we should do the following: properly implement the minimum grain purchase prices; increase reserves of major agricultural products; guide the movement of market prices; facilitate coordination in the production and sales of farm produce; ensure smooth distribution channels; reduce and exempt distribution costs; improve profit-sharing mechanism for production, processing and distribution; improve trade regulation and steadily expand export of competitive agricultural products. We should also speed up development of processing industry of agricultural products; guide township enterprises to concentrate in small towns; and help county economies grow; expedite development of projects in agriculture and rural areas for boosting domestic demand, and organize farmers into rural infrastructure construction projects through schemes of rewards for subsidies and food for work so as to increase job opportunities for farmers. We should fully implement the “Circular by the General Office of the State Council for Addressing the Issues Related to Migrant Workers”, and take various measures in order to facilitate employment of migrant workers.


4. Step up monitoring from farm to table so as to upgrade the quality and safety of agricultural products. The supervision of the quality and safety of agricultural products should be placed higher on our agenda so as to upgrade supervision and put an end to major food incidents. The Ministry of Agriculture will soon launch a nationwide campaign for law enforcement year to ensure steady improvement of the quality and safety of agricultural products. In addition, risk assessment, inspection and testing, standardization and accountability should all be reinforced and the prevention and control of major animal diseases should be carried out in a down-to-earth manner.


5. Prepare better conditions for modern agriculture and accelerate development of agricultural support systems. To develop modern agriculture, we should reinforce the middle-small water conservancy works, transform middle-low yield farmland, prevent and control pests and diseases, and vigorously develop water-saving irrigation. As regard to agricultural science and technology, we should accelerate innovation; properly implement major breeding programs for new GMO varieties and for R&D of hybrid technology for major agricultural products; and build an industrial technology system for modern agriculture. According to the arrangement made by the 3rd Plenary Session of the 17th CPC Central Committee, we should intensify efforts to improve nationwide public service institutions including township or regional agricultural technology extension, the prevention and control of plant and animal diseases and the supervision of the quality and safety of agricultural products in three years. To this end, we should formulate plans and programs for implementation. We should do the following: promote projects for developing rural commercial information service and improve farm produce information release system; build distribution infrastructure for wholesale and farmers’ markets in major producing areas and distribution places; implement and improve in the long run the Green Passages for fresh and live farm produce; and introduce toll-free status to grant trucks fully and legally loaded with fresh and live agricultural products; continue with the key programs for sources control of sandstorms in Beijing and Tianjin areas; expand the coverage of grain for green programs, and launch compensation pilot programs for protection of ecological systems including grassland, wetland, and soil and water conservation.


6. Promote innovation and reform to revitalize agriculture and rural areas.  We should stabilize and improve rural basic operation systems; ensure the follow-ups to extension of farmland contract, and properly handle leftover problems concerning such extension; study and improve legal system relating to the problem that “the use right of contracted farmland remains unchanged for a long time”; strengthen management and service concerning the transfer of land use right; and establish step by step urban-rural integrated construction land markets. Meanwhile, we should pay special attention to and properly settle disputes that may arise from land contracting and transfer of use right after migrant workers return from cities. In addition, we should stabilize and improve the grassland contract and operation system. Land expropriation and requisition system should be reformed with strictly defined construction land for public and non-public purposes, and land requisition scaled back; and improve compensation for land requisition. Efforts should be made to deepen the comprehensive rural reform, and promote reform in the rural banking system. We should push forward the reform of collective forest rights, and expand the experimental reform of property right system in state-owned forests and state key forest areas. Besides we should promote reform of water control project management and rural water control systems; accelerate development of specialized farmers’ cooperatives, improve profit sharing mechanism between leading enterprises and farmers, and push forward restructuring of land reclamation and state farms sector and animal health management system.


7. Improve people’s livelihood in rural areas and promote integrated socio-economic development in urban and rural areas.  Improvement of the people’s livelihood in rural areas should be taken as an important measure to boost domestic demand and a top priority for arranging newly increased government investment; and accelerate implementation through readjusting plans and arrangements. Rural key cultural undertakings should be promoted for sharing of cultural resources and information. Future improve funding systems to ensure rural compulsory education, intensify efforts for repair and renovation of rural primary and secondary school buildings, and accelerate development of rural secondary vocational education. Employment pilot coverage in urban and rural areas should be expanded in a well-planned way to establish a mechanism that ensures equal employment opportunities for both urban and rural residents. Reinforce the new type of rural cooperative medical scheme and medical aid system. Raise standard for rural subsistence allowance and its level, push forward pilot programs for setting up an old-age insurance in rural areas. Launch a nationwide campaign to bring home electrical appliances to the countryside for sale. We should speed up construction of rural infrastructure with focus on ensuring water, power and gas supply as well as access to road and affordable houses; gradually improve work and living conditions for farmers. According to tentative schedule for 2009, additional 60 million people will have access to safe drinking water, and five million rural households will have access to biogas supply. We will adhere to the principle of development for poverty alleviation and redouble our efforts in this regard.


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