Lightening the Burden on Farmers

From: English Edition of Qiushi Journal Updated: 2011-09-19 19:28
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    In the mid and late 1980s, China put the work of lightening the burden on farmers high on the agenda of its work related to agriculture, rural areas, and farmers, and adopted a series of important measures. Through unremitting efforts over many years, desired results were achieved in the work of lightening the burden on farmers which gradually shifted from legislation and standardization to reduction of their burden and rectification of irregularities, and from reform of rural taxes and fees to comprehensive reform, as the burden on farmers continuously reduced and their incomes continuously increased.

 I. The Early Period: Agriculture Supports Industry (1978-1999)

    After the Third Plenary Session of the Eleventh Central Committee of the Communist Party of China (CPC), the household production contract system was practiced throughout the rural areas, stimulating the enthusiasm of farmers, greatly emancipating the productive forces of the rural areas, and promoting rapid development of rural economy and an increase of the incomes of farmers. In the mid and late 1980s, shifts in supply and demand and changes in the prices of farm produce were mainly responsible for hindering the increase of farmer incomes as the burden on farmers continuously grew. Particularly after 1990, when there was the serious problem of some local governments indiscriminately collecting fees, collecting money to build up funds, imposing fines and collecting unwarranted charges. These serious problems were known as the “three chaotic phenomena,” and they caused the burden on farmers to grow daily. The central government adopted a series of important measures to “reduce the burdens of the farmers and solve the irregularities.”

    In 1990 the State Council issued the Notice on Truly Lightening the Burden on Farmers, which pointed out, “with the township as the unit, the fees collected, retained and pooled by the collective per capita normally should be controlled within 5% of the per capita net income of the previous year.” In 1991 the State Council promulgated Regulations on the Expenses Borne by the Farmers and Labor Administration. These regulations stipulate that with the township as the unit, the fees collected and retained by the village and the fees pooled by the township for public service programs should not exceed 5% of the per capita net income of farmers in the previous year. At the Third Plenary Session of the Fifteenth CPC Central Committee in 1998, it was decided that the rational burden borne by the farmers should remain unchanged for three years. A proportional quota and a numerical quota would be implemented as a double control. Since 1999 the management method of keeping the retained and pooled fees unchanged for three years has been implemented throughout the country. 

    March 10, 2009, in Tai’erzhuang District of Zaozhuang, Shandong Province, overjoyed farmers hold their “golden keys” at a handover ceremony of the first lot of farm machinery and tools purchased through government subsidies. / Photo by Gao Qiming, supplied by Xinhua

    The country has launched a number of large-scale campaigns since 1990 to review the official documents and regulatory items affecting the burden on farmers. In 1990 review and rectification work involving fees collected from farmers was carried out, and the basic situation of fees collected from farmers was made clear. In 1993 the government reviewed and cancelled a large number of charges that had increased the burden on farmers imposed by both the central and local governments. The burden on farmers was reduced by more than 10 billion yuan during that year. After the CPC Central Committee and the State Council issued the Decisions on Successfully Lightening the Burden on Farmers, a total of 17,389 items increasing the burden on farmers were reviewed and 7,831 unreasonable charges were abolished, reducing the burden on farmers by 3.77 billion yuan.

    Beginning in 1992, the Joint Meeting of the Central Government for Lightening the Burden on Farmers dispatches examination teams every year to check up on the burden on farmers in different parts of the country. Local governments generally exercise examination of law enforcement twice a year. Through examinations and supervision, the money which should not have been collected from the farmers or which had been collected in excess of the amount due has been returned to the farmers and the persons who were responsible have been seriously dealt with, thus promoting proper implementation of the various policies and measures.

  II. The Exploratory Period: “Giving More,Taking Less and Relaxing Restrictions”(2000-2005)

    Practice of many years has shown that it is very difficult to fundamentally solve the problem of the heavy burden on farmers by working to reduce the burden and correcting irregularities. In order to ensure continued development of the rural economy and social stability, we adopted a policy of “giving more, taking less and relaxing restrictions.” The central government adopted resolute measures in the reform of rural taxes and charges and lightened the burden on farmers by standardizing and stabilizing charges and fees.

    In March 2000 the CPC Central Committee and the State Council issued the Notice Concerning Trial Reform of Rural Taxes and Charges, which clearly abolished administrative and institutional charges and collections for government funds and other funds collected from the farmers such as fees for unified management of township public service programs and funds collected for rural education. The Notice also abolished the animal slaughter tax, and the system of obligatory labor recruitment and required volunteer work fixed by the state on a nation-wide basis, adjusted the policies on agricultural taxes, adjusted the policy on taxation of special farm produce and reformed the methods for collecting and using the fees retained by villages. In 2003 trial reforms of rural taxes and charges were carried out across the country. The overall rate of agricultural taxes was reduced by 1% in 2004 and the special farm produce tax was abolished, with the exception of the tax on tobacco. In 2005 agricultural taxes were completely abolished in 28 provinces, autonomous regions and municipalities directly under the central government.

    In line with the policy of “giving more, taking less and relaxing restrictions,” the central government strengthened the policies designed to support and benefit farmers. In 2004 the central government began to give direct subsidies to farmers who grow grain in the main food grain producing areas and subsidized farmers for planting superior crop varieties and for the purchase of large-scale agricultural machinery and tools in some regions. The total expenditure for these three subsidies topped 14.95 billion yuan. In 2005 the expenditures for these three subsidies totaled 18.05 billion yuan. During this period, the problem of the heavy burden on the farmers made a fundamental turn for the better, effectively encouraging farmers to increase production and promoting an increase in agricultural production and an increase in the incomes of farmers. The rate of increase in the annual per capita net income of farmers rose from 2.1% in 2000 to 4.8% in 2003.

  III. The Current Period: Master Plans for Urban and Rural Development(2006 and beyond)

    In 2006 China abolished the agricultural tax across the country, putting an end to “the Emperor’s grain and state tax,” which had a history of 2,600 years in China. However, the ma jor problems of weak infrastructure in agriculture, the poor progress in social programs in the rural areas, and the widening gap between the incomes of urban and rural residents remained to be solved. These are deep-rooted social factors adding to the burden on the farmers. The CPC Central Committee and the State Council clearly pointed out in A Number of Suggestions for Promoting the Development of a New Socialist Countryside that in order to change this state of affairs as soon as possible we will need to combine planning for the economic and social development of urban and rural areas and establish a permanent mechanism of industry promoting agriculture and urban areas helping rural areas.

    Funding for the three types of subsidies granted to farmers reached 19.64 billion yuan in 2006, accounting for an increase of 8.9% over that of 2005. In addition, 12.5 billion yuan was added for the first time to provide farmers with general direct subsidies for buying agricultural production supplies and 2.89 billion yuan was set aside for subsidizing fuel oil for the fishery industry. In 2007 a total of 51.27 billion yuan was earmarked in the central budget for direct subsidies to grain producers, general subsidies for agricultural production supplies, subsidies for planting superior crop varieties, and subsidies for the purchase of agricultural machinery, an increase of 20.32 billion yuan over the amount for 2006. In 2008 the central government increased spending for agriculture, increasing total investment to 587.81 billion yuan, up 36.1% over the 431.8 billion yuan of 2007. 

    In September 2006 the central government convened a national working meeting on comprehensive rural reform and promptly formulated a general blueprint for the reform. The blueprint was designed to promote reform of town and township government departments, with the focus on changing the way the government functions. By the end of November of 2007, the number of towns and townships across the country participating in the trial reform reached 18,047, accounting for 52.4% of all towns and townships. Progress was made in the reform of the compulsory education system in rural areas, with the focus on setting up a mechanism to ensure funding for compulsory education. By the end of 2007, a total of 92.6 billion yuan from central and local budgets had been spent on the reform. Nearly 150 million secondary and primary school students in rural areas were exempted from paying tuition and other education fees. The government provided free textbooks for 38 million students from poverty stricken families, and granted subsidies to 7.8 million students who come from poverty stricken families and stay in school dormitories. The reform of financial management for counties and townships made progress, ensuring stronger guarantees for funding of education at the local level.

    In June 2006 the General Office of the State Council issued Opinions on How to Ensure Success in Efforts to Lighten the Burden on Farmers, which clearly defined the general requirements for lightening the burden on farmers following cancellation of agricultural taxes and identified the focus of efforts of supervision and management of the burden on farmers. First, the management of administrative and institutional charges contributing to the burden on farmers needs to be standardized, the examination and approval process for documents contributing to the burden on farmers needs to be tightened up and the system of examination and approval of public notices for projects needs to be strengthened. Second, supervision and management needs to be strengthened for pricing of agricultural production necessities and charges levied by village collectives. Third, we need to improve the supervision on the method known as “discussing matters singularly”* for making decisions on local public works projects requiring the contribution of local capital and labor. Management of collected funds and funds for labor and special subsidies needs to be tightened to improve the performance of such funds. Fourth, supervision and management should be set up to curb arbitrary charges and assessment imposed on special economic cooperative organizations of farmers. Fifth, we must ensure effective supervision and management of funds used to pay subsidies and compensation to farmers and funds used to grant subsidies to village-level public finance, and subject issues that cause strong resentment among the farmers involving rights and interests of farmers such as compensation for the requisition of land.

    Thanks to years of effort, China has achieved marked results in lightening the burden on farmers. The total burden on farmers nationwide was 28.28 billion yuan in 2006, down 97.68 billion or 77.6% from the level of 2000, and the burden per capita was 30.95 yuan, down 110.47 yuan or 78.1% from that of 2000. Agriculture and the rural economy in China entered a period of fast growth during this time, and the rate of increase of farmer incomes reached 7.4% in 2006, and 7.5% in 2007. Growth in grain production remained steady for five consecutive years and efforts to build a new socialist countryside entered a new period of progress.


Note: Wan Baorui is the former Vice Minister of the Ministry of Agriculture of the People's Republic of China

    *The system of “discussing matters singularly” when requiring contributions of capital and labor from local farmers is a type of institutional arrangement developed as part of the reform in rural taxes and fees. After the central government eliminated fees charged for unified management of township public service programs and reformed the system of retaining fees by the village, different means had to be found to raise the capital and labor required to carry out public service programs that directly benefit the collective working and living conditions of village residents. The development of such projects must now follow a policy of respecting the wishes of villagers, directly benefiting villagers, not exceeding the capacity of villagers, following democratic procedures in decision-making and setting reasonable limits, with decisions reached through “discussing matters singularly.” Now that the new system is basically in place and in operation, it has shown its effectiveness in promoting development of public service programs that directly benefit the collective working and living conditions of local residents. Time has also shown that it is in conformity with the actual conditions in rural areas and in line with the common desires of farmers all across China. It has proven to be an effective measure for developing democratic politics at the village level, improving the ability of villagers to govern themselves and increasing their enthusiasm in general.

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