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Agriculture in China III

DATE:2017-03-01       SOURCE:MOA

4. Agricultural Policies in China


4.1 Policies and Guidelines


Since the beginning of the 21st century, China has been viewing its agriculture and rural development from the perspective of national economic development agenda. In a view to adapting itself in the middle of industrialization and in a changing environment of agriculture and rural community, China has adopted a series of policies that strengthen agriculture, deliver benefits to rural communities and enrich farmers. These policies are put in place to consolidate  the role of agriculture as the foundation of the national economy, increase farmers’ income and promote comprehensive rural development. Thus a policy system that supports agriculture in the new era has gradually taken shape.

The central government has issued for 13 years in a row  theNo.1 Document which guides its work on agriculture, rural community and farmers. The No.1 Document lays out strategic arrangements in the following areas, increasing farmers' income, comprehensive agricultural productivity, construction of new countryside, modern agriculture, the base of agriculture , steady development of agriculture and sustainable increase of farmers' income, overall planning of urban and rural development, farmland water system, agricultural science and technology,vigor of rural development, agricultural modernization and the realization of a moderately better-off  society.


4.2 Major Policy and Measures


4.2.1 Ensuring Food Supply


China adhers to the fundamental principle of ensuring food supply with domestic production. China has been implementing the medium and long-term plan for national food security and the plan to increase grain production capacity by 50 billion kg. First, enhancing productivity, in which efforts will be made to strictly protect cultivated land and improve the grain per unit yield.. Second, complete the mechanism of a grain market. Efforts will be made to build a stronger grain market system, while giving full play to the role of the market in resources allocation. Third, strengthen the macro regulation on food supply. It means that policies on grain subsidies and pricing of agricultural products will be further completed. Grain reserve system will be strengthened with greater adjustment on food import and export. Fourth, establish the food security accountability system. We stick to the practice that provincial governors are responsible for food security. Meanwhile the regions of sales will be given greater responsibilities to ensure food security.


4.2.2 Administration of Rural Farmland


China sticks to the most stringent farmland protection system. The responsibilities of protecting farmland is partitioned and allocated to each and every rural household, who is held accountable for the protection of basic farmland. The aim is to ensure that areas of basic farmland do not reduce, the farmland is not used for other purposes and the farmland enjoys greater quality.


4.2.3 Agricultural Subsidies


China has established a basic policy framework for agricultural subsidy that conforms to WTO rules and the context of the situation in China. The core of the framework is “the Four Subsidies”. The first is the direct subsidy for grain producers. Since 2004, it replaced the previous grain marketing subsidy. Altogether 162.25 billion yuan of direct grain subsidy were granted from 2005 to 2015. Second is subsidy for superior crop varieties. So far, 176.12 billion yuan have been allocated for this subsidy, currently covering 10 major crops such as rice, wheat and maize. The subsidy for improved breeds of livestock and poultry was initiated in 2005, covering dairy cattle, live pig, beef cattle, sheep and goat. The third type is subsidy for the purchase of advanced farm tools and machinery. From 2004 to 2015, central budget has subsidized 143.5 billion yuan in this regard. The fourth is the general subsidy for agricultural input, which has totaled 778.1 billion yuan by now.To increase subsidy efficiency, the government started the "three subsidies reform” in 2015, combining grain direct subsidy, superior seed variety subsidy and general input subsidy into "protective agricultural subsidy"aiming to protect farmland productivity and support appropriate food production scale.


4.2.4 Rural Finance and Insurance Policies


In recent years, China's rural financial reform has been deepening, which makes the financial sector increasingly supportive of agriculture. Financial services have covered most rural areas. The framework of rural financial supporting policy is gradually improving and a new pattern of the coexistence and coordinated development of commercial finance, cooperative finance, and policy finance, has taken shape.


Agricultural insurance is an important means to protect and support agriculture. In 2007, the central government initiated the pilot program of subsidizing agricultural insurance premium. At present, the premium subsidized by the central budget covers all provinces for 15 varieties/breeds, including corn, rice and dairy cattle.


4.2.5 Agricultural Cooperative Organization


The Law on Specialized Farmers’ Cooperativescame into effect on July 1st, 2007, granting the cooperatives the status of independent legal body, providing legal safeguards for their development. In addition, supporting documents like Specialized Farmers’ Cooperatives Protocols, Specialized Farmers’ Cooperatives Registration Regulations, and Accounting Rules for Specialized Farmers’ Cooperatives (Trial) provide more specific standards to provide guidance on the development of specialized cooperatives.


4.2.6 Policies on Agri-Products Price Protection


A series of policies and measures have been issued to promote the market-oriented reform for major agricultural products such as grain, while liberalizing agri-product market and pricing, and establishing the system of minimum purchase price for grain and temporary collection and reserve of major agricultural products. The minimum purchase price policy has been adopted for wheat, rice and other major crops in the main producing areas since 2004. The temporary collection and reserve policy has been implemented for food crops like corn and soybean, and other major agricultural products like cotton, rapeseed and sugar, which are not covered by the minimum purchase price policy. In 2014, the government started the target price reform pilot program for soybeans in the Northeast, Inner Mongolia, and the pilot program for cotton in Xinjiang. In 2016, the government started the agricultural supply structural reform and promoted the planting structural adjustment, scaling down the grain production in uncompetitive regions.


4.2.7 Training for Farmers and the Movement of Migrant Workers


The “Sunshine Project”, funded by of government public finance, has been taken up to train the rural labor force and prepare them for jobs. Farmers’ technical skills accreditation subsidy system has been established and unreasonable restricts on farmer’s employment in the city have been abolished. Migrant workers’ working conditions are being improved and an employment mechanism of equal opportunity for urban and rural residents is being formulated. 


5. China’s Agricultural Internationalization


5.1 Multilateral and BilateralCooperation Mechanisms


China plays an active and constructive role on major agricultural multilateral platforms, such as the Food and Agriculture Organization (FAO) of the United Nations, the World Food Program (WFP), the World Organization for Animal Health (OIE), the Consultative Group on International Agricultural Research (CGIAR), the Group of 20 Major Economies (G20), the Asia-Pacific Economic Cooperation (APEC), the Association of Southeast Asian Nations (ASEAN), ASEAN plus China, Japan and Korea (10+3) and the Shanghai Cooperation Organization (SCO).


5.2 Agricultural Trade Promotion


In December 2001, China joined WTO and opened its agricultural product market to the rest of the world.


China plays a leading role in regional cooperation and cooperation with emerging economies, and free trade zone main vehicle for regional economic cooperation. By the end of 2014, China has signed bilateral/regional free trade agreements with ASEAN, Pakistan, Singapore, Chile, Peru, Costa Rica, New Zealand, Iceland and Switzerland. Mainland China has signed the Closer Economic Partnership Arrangement (CEPA) with Hong Kong and Macao, and the Economic Cooperation Framework Agreement (ECFA) with Taiwan. China is also negotiating for free trade agreements with Australia, Switzerland, the Gulf Cooperation Council, Iceland, Norway, and Southern Africa Customs Union.


5.3 Agricultural Go-Global Strategy

Agricultural Go-Global strategy includes four aspects: First, participate in global agricultural market competition and improve the competitive edge of China's agricultural enterprises. Second, make full use of foreign agricultural resources and enhance the control of agricultural imports that are in short domestic supply. Third, expand agricultural technology export and improve grain production capacity in developing countries. Fourth, promote trade with stronger investment and make sure that grain is circulated internationally in a two-way direction with large amount of import and export. In 2015, China's direct agricultural investment to foreign countries amounted to $2.05 billion, and 40 leading enterprises took part in the Go-Global strategy. The investment covers over 30 countries and regions across 5 continents.


5.4 Deepening Cooperation in Agriculture with Countries along the Silk Road Economic Belt and the 21st Century Maritime Silk Road


The initiative of developing agriculture cooperation with countries along the Belt and Road region has been favored and the agricultural cooperation has gradually gone deep. In Vietnam, Laos, Myanmar, Indonesia, Cambodia, China experimented high quality and high yield agricultural technologies on rice, corn and vegetables, which were praised by local governments and farmers. Progress has been made in the cooperation of natural rubber breeding, cultivation, processing with Malaysia, Cambodia and other countries. Laos’ animal disease control laboratory and China-Laos Animal Quarantine Station were established. China Cambodia agricultural technology promotion center was set up. Also, we practice regional management for China-Mongolia cross-border animal disease control. China joined efforts with Vietnam to monitor Vietnamese rice planthoppers and with Kazakhstan to deal with their locusts.


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