Tremendous Change in China’s Agriculture and Rural Areas

From: English Edition of Qiushi Journal Updated: 2011-09-19 23:57
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    Profound institutional changes have taken place in China’s agriculture and rural areas accompanied by tremendous progress in development during the 60 years since the founding of New China. In contrast, agricultural production was sluggish, the rural economy stagnated and the peasants, who comprised the great majority of the Chinese population, lived in dire poverty at the start of the contemporary period. This same situation was mirrored throughout the country and the Chinese nation was on the brink of extinction. Beginning in the 1840s, numerous people with lofty ideals ceaselessly struggled to rejuvenate the Chinese nation. But this ideal was only able to be realized under the leadership of the Communist Party of China, and the country’s agriculture and rural areas have seen earthshaking changes under the Party’s leadership.

    I. Great achievements have been made in the development of China’s agriculture and rural areas over the past 60 years.

    Total Chinese grain output was 113.18 million tons in 1949, an average of only 209 kilos per capita, far from adequate to meet the basic needs of the Chinese people. After the founding of New China, the CPC and the Chinese government attached great importance to developing agriculture. They launched the agrarian reform to realize the aspiration of generations of peasants by giving them land to farm, which greatly encouraged hundreds of millions of peasants to engage in production, resulting in a rapid increase in the output of major farm products. By 1952, the total output of China’s grain, cotton, edible oil and sugar had increased by 44.8%, 193.7%, 63.5%, and 168.1% respectively, while the per capita share of these farm products had gone up by 37.9%, 179.3%, 55.8%, and 155.3% than that in 1949. From then on, China’s agriculture and rural economy entered a period of rapid development, which was particularly evident following the implementation of the reform and opening up policy. Total Chinese output of grain, cotton, edible oil, and sugar rose by 73.5%, 245.6%, 465.9%, and 463.4% respectively in 2008 over 1978, representing an average per capita increase of 25.2%, 151.1%, 308.4% and 306.7%. Agricultural development has not only greatly improved the peasants’ lives but also provided an important material foundation for making historical progress toward the goal of building a moderately prosperous society in all respects and carrying out socialist modernization.

    In addition to agriculture, profound changes have also taken place in the entire rural economy. First, the structure of agricultural production has become more rational. The proportions of farming, forestry, animal husbandry and fishery in the total agricultural output value shifted from 80%, 3.44%, 14.98% and 1.58% in 1978 to 48.35%, 3.71%, 35.49% and 8.97% in 2008. Second, non-agriculture economic sectors have also witnessed rapid development in rural areas. Town and township enterprises have developed from a non-existent base to reach an added value of 8.4 trillion yuan in 2008, equivalent to nearly 28% of China’s GDP for that year. Third, profound changes have taken place in the employment structure in the countryside. The proportion of the labor force in the countryside employed in farming, forestry, animal husbandry and fishery dropped from 92.4% in 1978 to 64.8% in 2008. Nearly 100 million rural workers are now employed in non-farming work in their own towns and townships and an even greater number of rural residents are working or doing business away from their home areas. This has not only increased employment opportunities and improved channels for increasing the income of rural residents but also greatly promoted industrialization and urbanization. Fourth, marked progress has been made in poverty alleviation through development in the rural areas. In the period between 1978 and 2007 the total number of rural poor was reduced by more than 235 million and the poverty rate was reduced from 30.7% to 1.6%. In 2008, China introduced a new poverty line and instituted a poverty alleviation policy aimed at the low-income population in the rural areas. The poor population in rural China by the new poverty line was 40.07 million and the poverty rate was 4.6%. Fifth, the income and consumer spending of rural residents increased significantly. The annual per capita income of China’s rural residents was only 134 yuan in 1978; it rose to 4,761 yuan in 2008. Adjusted for inflation, the average annual increase in real terms over the past 30 years was 7.1%. By 2008, the Engel coefficient for rural residents had dropped to an average of 43.7%. In addition, under the new sunshine policy for public finance, government programs in the fields of culture, education, health care and social security in rural areas made considerable progress. Rural China is now advancing towards its goals of developed production, well-to-do life, civilized local customs, clean and tidy villages and democratic administration.

    Ma Haifu, a 58 year-old grain farmer from Ningxia said, “I have benefited from good government policy. First the requirement to turn over a portion of my harvest was eliminated, then in the past two years the agricultural tax was rescinded and now there is also a subsidy for growing grain. There are six people in my family and we farm 42 mu of land, which now produces about 20% more net income per mu than it did several years ago.” / Photo supplied by Xinhua

    II. Deepening reforms and making innovations in systems provides an inexhaustible force for driving rural economic and social development.

    The CPC directed the agrarian reform shortly before and after the founding of New China, making the peasants masters of the land and relieving them of the obligation to supply more than 30 million tons of grains as rent. This ignited the enthusiasm of the hundreds of millions of peasants for production and laid an important political and institutional foundation for rural economic and social development. In transforming agriculture in the mid-1950s by setting up rural cooperatives, the hasty demand for the transformation of individual peasant households, the rough work, rapid changes and excessively simple forms became serious problems. Furthermore, the system of the people’s communes exacerbated these problems and made them permanent, damaging the legitimate rights and interests of peasants and discouraging production. The Third Plenary Session of the Eleventh CPC Central Committee resumed the ideological line of seeking truth from facts and made the historical choice to institute a policy of reform and opening up, introducing reforms first of all in the rural areas.

    Reforms in rural China began with the agricultural management system. A two-tier management system based on contracted management by household and combining centralization with decentralization rapidly replaced the management system of the people’s communes. Full play was given to the initiative of individual households in management without changing the collective ownership of land, and the benefits of production were directly linked to the labor of those who worked the land. This solved the intractable problem of people working in large groups but accomplishing little and everyone sharing equally in the results of their labor, a situation that had persisted for a long time, and emancipated the productive force of the rural areas once again, allowing agricultural production and the rural economy to achieve rapid development. Reform of the system of monopolized government purchase and purchase by state quotas for farm produce was continuously deepened, gradually raising the state purchase prices of farm produce while gradually expanding the proportion of farm produce subject to autonomous circulation and market pricing. This resulted in the gradual formation of a system and mechanisms for regulating agricultural production in accordance with market demand and determining prices of farm products according to supply and demand under government macroeconomic control. This allowed a free flow and recombination of the factors of production and brought about profound changes in the economic structure of rural areas. When the system of the people’s communes was abolished and townships were set up to replace them, the CPC and the Chinese government promptly introduced a system of autonomy for villagers. The people in the countryside can now exercise rights such as democratic election, democratic policy making, democratic management and democratic supervision in accordance with the law, and a dynamic mechanism for villager autonomy with the Party organization of the village at the core is now taking shape.

    The Chinese people achieved the objective of meeting the basic requirements for a moderately prosperous society as a whole at the end of last century and have now begun to advance toward building a moderately prosperous society in all respects. In view of the new requirements for the Chinese economy and Chinese society in the new stage, the CPC Central Committee introduced the important concept and strategic objective for development of balancing urban and rural economic and social development and making solution of the problems of agriculture, rural areas and farmers the key focus of the work of the whole Party. The Central Committee adopted a policy of industry stimulating agricultural development and urban areas supporting the countryside and giving more to and taking less from rural residents and relaxing control over them, and introduced a series of important measures to deepen reform and promote development in rural areas:   

    One, rural taxes and fees were reformed. In 2006, China announced a complete abolition of the general agricultural tax, the tax on special farm products, the tax on animal husbandry and the slaughter tax, lightening the burden of peasants by a total of about 125 billion yuan, including “the three withdrawn and retained fees and the five general planned fees” (note) that were abolished in the course of carrying out earlier trials. The system of agricultural taxes (traditionally referred to as “the emperor’s grain and state tax”) levied on peasants, in force for 2,600 years, has finally been eliminated. This has great importance not only because it has lightened the burden on farmers but also because it has helped improve the distribution pattern of the entire national economy.

    Two, direct subsidies have been granted to agricultural producers. In 2004, China introduced the important policy of granting direct subsidies to agricultural producers. Subsidies to farmers for growing grain crops, planting superior crop varieties and purchasing agricultural machinery and general subsidies for agricultural production supplies were increased from the original 14.5 billion yuan to 123 billion yuan in 2008, greatly helping to increase rural incomes, reduce expenditures and stimulate agricultural production.

    Three, the magnitude and scope of government spending related to the countryside was greatly expanded. After the Sixteenth CPC National Congress, the CPC Central Committee clearly expressed its intention to shift the focus of infrastructure development efforts and social programs to the rural areas. Greater emphasis was placed on construction of infrastructure facilities such as drinking water purification systems, power grids, roads and methane plants. As of the end of 2008, China had solved the problem of inadequate safe water supplies for 154 million rural residents, extended coverage of major power grids to more than 95% of the rural population, connected 88.7% of all towns and townships by asphalt or cement roads and supplied more than 30 million rural households with methane. Continued progress was made in carrying out social programs in education, medical care and social security in rural areas. In the country side, tuition and other education-related fees were rescinded, textbooks were supplied without cost, and subsidies were granted to cover living expenses for students from poor families living on campus while receiving compulsory education. Later was extended to urban areas. Standards of public expenditures on rural education and the level of government assistance and subsidies for the maintenance and improvement of rural school buildings and dormitories in the central and western regions of the country were raised. Steady progress was made in setting up a new type of rural cooperative medical system. The number of people participating in the new rural cooperative medical system has now reached 830 million, basically covering the entire rural population of China. A system for granting cost of living allowances to poverty stricken rural residents to ensure minimum standards of living has been set up to cover most rural areas. More than 44.72 million rural residents were covered by the system as of the first half of 2009. Because of these new systems, many farmers now say they are finally living the good life they have dreamed of for so long, “tilling the land without having to pay taxes, sending their children to school without having to pay tuition, receiving medical care at a reasonable cost and not worrying about how to support themselves in retirement.” 

    The Third Plenary Session of the Seventeenth Central Committee of the CPC, held in the 30th year of rural reform, focused on the study of a number of important issues related to carrying out rural reform and development in the new situation. The Decision of the CPC Central Committee Concerning a Number of Important Issues Related to Rural Reform and Development, passed at the Third Plenary Session, pointed out that in spite of the fact that China had made achievements in developing agriculture and rural areas that attracted the attention of the world, the foundation of agriculture was still weak and urgently needed to be strengthened. Rural development was still lagging behind development in other areas and needed more support than other areas. The Decision further pointed out that there were still many difficulties facing efforts to increase rural incomes and that efforts urgently needed to be intensified. We must be prepared for danger in times of peace. In accordance with the plan for rural reform and development for the next 12 years contained in the Decision, we need to accelerate efforts to work out major measures for rural reform and development under the new situation to address the new conditions and problems currently affecting agriculture and rural areas. We need to devote more effort to properly resolve the major general problems plaguing agriculture and rural areas, simultaneously work to promote both urbanization and the development of a new socialist countryside, stabilize and improve the basic management system of rural areas, strengthen government support and protection for agriculture, ensure a lasting balance of supply and demand for major farm products and continuously work to consolidate and develop the good situation in the countryside.

(From Qiushi in Chinese No.19 2009)

Note: Author: Director of the Office of the Leading Group for Rural Work of the CPC Central Committee

“The three withdrawn and retained fees and the five general planned fees” refer to public accumulation funds, public welfare funds and managerial fees withdrawn and retained by the village as well as the five general planned fees, including fees for running education in the rural areas, building roads, implementing the program of family planning, giving special care to disabled servicemen and to family members of revolutionary martyrs and servicemen, and militia training, in the hands of the township.

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