China saves farms from brink of collapse
Subsidies, land zoning and special agricultural funds help lift grain production and raise rural income
BEIJING - Farmer Lu Shoutang in China's central Hebei province has many reasons to be pleased. This year's summer harvest was better than in previous years.
When the family was busy cutting wheat, news came that the government had reduced the agricultural tax by half, from 4 per cent to 2 per cent, and raised the selling price of grain by 60 per cent, to 1.5 yuan (S$0.30) per kilogram.
Advertisement
'Just from the summer harvest, we made a few hundred yuan in extra income,' said Mr Lu.
The Lu family lives in a village called Liujia on the North China Plain, one of China's 'bread baskets'.
Most households there live on growing two crops a year, customarily wheat for summer and maize for autumn.
Like the Lu family, they are benefiting from government incentives which are meant, above all, to ensure food security for the most populous country in the world.
Back in the late 1970s, China's rural population started a sweeping reform, which made them independent producers for the first time since agricultural collectivisation in the mid-1950s.
As the rural reform developed in scope and depth, China's grain production increased steadily and, in the mid-1980s, the government was able to do away with the food rationing imposed since the 1950s.
From 1994 to 1998, China reaped good harvests for five successive years, and its grain output reached an all-time high of 540 million tonnes.
Happy officials told the world that China had become essentially self-sufficient in food supply, with a surplus in good crop years.
The good times, however, did not last long. Beginning in 2000, grain production dropped year after year, to 431 million tonnes last year.
The whole country was worried. It is true that China has built a foreign exchange reserve amounting to several hundred billion US dollars, with which it could buy grain from overseas markets.
But what country can supply so much as to feed a population of 1.3 billion?
Even if China can find suppliers big enough to help ensure its food security, what would the consequences be when world grain prices are driven high by massive Chinese imports?
Officials and experts believe a variety of factors account for the threat to China's food security.
One of these is too slow an increase in rural incomes compared with those of urban residents.
According to the National Bureau of Statistics, net income for the rural population increased by 69.7 per cent from 1990 to 2002, averaging 4.45 per cent annually, in comparison to 138.3 per cent, or 7.5 per cent yearly for the urban population.
The income gap between China's urban and rural population has kept widening.
In 1985, disposal incomes for the urban population were 1.89 times that for the rural population. By last year, the disparity had increased to 3.1 times.
This state of affairs was certainly detrimental to China's agricultural development, food production in particular.
Cost of agricultural production kept rising, while prices dropped for grain.
In Sichuan, one of China's largest agricultural provinces, a typical farmer made no more than 114 yuan in gross income by growing rice on 0.1 ha of land in 2002.
The net income, however, was a mere 12 yuan after production cost was deducted.
As Mr Lu Shoutang in Hebei Province puts it: 'Who would grow crops when you have nothing to gain, or even worse, you lose money?'
The Chinese authorities lost no time in taking up the challenge. It has made raising rural income a top policy priority.
It calls for direct subsidies to grain producers in 13 major grain-producing regions, averaging 300 yuan per hectare.
Moreover, beginning this year, the agricultural tax will be reduced by one percentage point every year and, in five years, it will be revoked completely.
With tobacco as the only exception, 'special agricultural products' like fruit and mushrooms are now all tax-free.
The central government has earmarked a special fund to make up for possible shortfalls in local government revenues, through what is known in China's official terminology as 'transfer payments'.
The result has been immediate.
On July 16, when the summer harvest ended in most parts of China, the State Bureau of Statistics announced that grain production had begun picking up and the year's grain output would reach 455 million tonnes, 24 million tonnes more than last year's output.
The bureau also reported that net incomes increased 7.8 per cent year-on-year for China's rural population in the first six months of this year, the fastest growth in the most recent two decades.
Dwindling acreage sown to crops was one more factor that caused China's grain production to drop.
According to a senior official in the Leading Group for Economic and Finance Affairs, under the Chinese Communist Party Central Committee, China used to have about 113 million ha of arable land which, by 2002, had shrunk to 99 million ha.
'This is a big problem for China,' said Mr Chen Xiwen, deputy director of the group's General Affairs Office.
'The country has limited land resources, relative to its population.'
He and other officials interviewed attributed the problem to excess requisition of farm land by local governments for capital construction projects, particularly for 'development zones' which, according to a popular saying, are now 'as many as ox hair'.
'Development zones have played an important role in attracting foreign capital,' Mr Chen said. 'The problem is that local governments seemed too enthusiastic about them.
'Lots of the so-called development zones exist only in name and large tracts of farmland were laid waste because no company, foreign or Chinese, came to invest.'
The central government reacted.
After checks, it revoked the development zone status of 4,735 tracts, more than 75 per cent of 6,741 pieces inspected, covering 37,500 sq km, which make up more than the combined area of all urban centres in China. The land is to be returned to crop farming as far as possible.
In a related development, the central government has also become tougher in handling cases involving illegal requisition and trading of land. More than 32,500 such cases are being investigated, which together involve 21,700 hectares of land, including more than 13,300 hectares of farmland.
Mr Lu, the Hebei farmer, may not be familiar with terms like 'food security' but he does know that, thanks to the latest policy measures, grain production is now profitable and will be more so in the coming years.
'Folks here are expanding the acreage sown to wheat, maize and other food crops,' he said.
'Crops are now grown even on the village's flood land.' -- Xinhua
straitstimes.asia1.com.sg |
