On Promoting Increases in Farmers' Income

On February 8, 2004, the Central Government of China announced its No.1 Central Document for that year. The document called for an adjustment in agricultural structure, expansion of employment opportunities for farmers, acceleration of technological progress, deepening of rural reforms, increased investment in agriculture, strengthened support and protection for agriculture, striving for a rapid increase in farmers' incomes, and promptly reversing the trend of widening income disparities between urban and rural residents.

Concentrated efforts to support the development of staple food industries in major production areas and increase income for grain farmers.

Strengthen the staple food production capacity in major production areas. Mobilise farmers' enthusiasm for grain cultivation, implement high-quality grain industry projects, and concentrate on building a batch of national high-quality special grain bases. Efforts should be made to support key construction of fields in main production areas, especially in central grain production areas, that can ensure yields regardless of droughts or floods. Expand the fertile soil project and continuously improve the quality of arable land.

Support major production areas in grain transformation and processing. The main production areas should strengthen the grain industry; increase grain value through the development of animal husbandry; guide the rational layout of agricultural product processing industries according to national industrial policies, supporting the development of agricultural product processing industries that mainly use grain as raw materials, with a focus on deep processing.

Increase investment in major grain production areas. Existing agricultural fixed asset investments, agricultural comprehensive development funds, and land reclamation funds should be relatively concentrated and biased towards major production areas.

Advance agricultural structural adjustments and tap into the potential for increasing agricultural income.

Comprehensive improvement in the quality and safety of agricultural products. Further strengthen agricultural standardisation. Perfect inspection, safety monitoring, and quality certification systems for agricultural products; promote the origin labelling system for agricultural products, implement mandatory product certifications for agricultural inputs, expand the production and supply of non-polluting food, green food, and organic food. Accelerate the development of agricultural industrialisation. Financial subsidies can be provided to leading enterprises that offer training, marketing services, R&D of new varieties and technologies, base construction, and pollution control for farmers. Create conditions and improve value-added tax policies for agricultural product processing.

Strengthen agricultural research and technological promotion. Substantially increase budgetary investments in agricultural research. Continue to allocate funds for introducing advanced foreign agricultural technologies. Increase funding for the transformation of agricultural scientific and technological achievements. Support the pilot and large-scale promotion of existing scientific achievements. Deepen the reform of the agricultural technological promotion system and accelerate the development of a complementary agricultural technology promotion system consisting of national promotion institutions and other ownership-based promotion organisations.

Develop secondary and tertiary industries in rural areas to broaden channels for increasing farmers' income.

Advance the reform and adjustment of township enterprises. Adjust the development strategies and modes of township enterprises, focusing on the development of agricultural product processing, service industry, and labour-intensive enterprises.

Vigorously develop non-public economies in rural areas such as individual and private businesses.

Revitalise the economy of small towns. Guide more farmers to enter small towns, enhancing the ability of small towns to absorb rural population and drive rural development.

Improve the environment for farmers to seek employment in cities, increasing the income from migrant work.

Protect the legitimate rights and interests of migrant workers in cities. Protect the rights and interests of migrant workers in cities according to the law. Advance the reform of household registration systems in medium and large cities, relaxing the conditions for farmers to seek employment and settle in cities.

Strengthen vocational skills training for rural labour. Mobilise all sectors of society to actively participate in vocational skills training for farmers, encouraging all types of educational and training institutions and employers to provide vocational skills training for farmers.

Harness the market mechanism to invigorate the circulation of agricultural products.

Cultivate marketing entities for agricultural products. Encourage the development of professional agricultural product cooperative organisations, major buyers and sellers, and farmer brokers. Accelerate the development of agricultural product chains, supermarkets, and distribution operations; encourage eligible places to transform urban agricultural markets into supermarkets, support leading agricultural enterprises in opening supermarkets in cities, and gradually extend the network to urban communities. Further strengthen the construction of wholesale markets in production and sales areas, create conditions for the development of modern logistics, and further improve the circulation environment for agricultural products.

Expand exports of advantageous agricultural products. Relevant departments should provide information services for agricultural product export enterprises. Strengthen foreign negotiations, creating a favourable environment for the export of our country's agricultural products. Adapt to the new situation of international agricultural product trade and accelerate the establishment and improvement of industry and commodity associations for key export agricultural products such as poultry, vegetables, and fruits.

Strengthen rural infrastructure construction to create conditions for farmers to increase their income.

Continue to increase fiscal inputs for agricultural and rural development. Implement policies specifying that additional funds for education, health, and culture primarily benefit rural areas, and conduct special inspections on their implementation each year.

Further strengthen the construction of agricultural and rural infrastructure. Develop the "Six Small Projects", which include water-saving irrigation, drinking water for humans and livestock, rural roads, biogas in rural areas, rural hydroelectricity, and pasture fencing. Undertake various small-scale infrastructure projects suited to local conditions, such as rainwater harvesting, river channel management, water conservancy in pastoral areas, small watershed management, water sanitation improvements, and straw gasification.

Deepen rural reforms to provide institutional guarantees for increasing farmers' income and reducing their burden

Accelerate the reform of the land requisition system. Improve the land requisition procedure and compensation mechanism, raise compensation standards, improve distribution methods, properly resettle farmers who lose their land, and provide them with social security.

Deepen reforms of the food circulation system. Starting from 2004, China will fully liberalise the grain procurement and sales market, implementing multi-channel operations for buying and selling. To protect the interests of grain farmers, a direct subsidy system for farmers will be established. In 2004, the state allocated a portion of the grain risk fund for direct subsidies to grain farmers in major production areas.

Continue to promote rural tax and fee reforms. Consolidate and develop the results of tax and fee reforms, further reduce the tax and fee burden on farmers, and create conditions for the eventual unification of urban and rural taxation systems. Gradually reduce the agricultural tax rate; in 2004, the overall agricultural tax rate was reduced by one percentage point, and special agricultural taxes on all commodities except tobacco were abolished.

Reform and innovate the rural financial system. Commercial banks such as the Agricultural Bank should innovate financial products and service methods and expand credit channels to support agriculture. Policy banks like the Agricultural Development Bank should adjust their roles, have a rational division of labour, and expand their service range in agriculture and rural areas. Continue to expand small credit loans for farming households and joint guarantee loans for farmers. Accelerate the establishment of a policy-based agricultural insurance system and initiate pilot schemes for selected products and regions.

Focus on poverty alleviation and address the difficulties in production and living conditions of the rural poor.

Improve the poverty alleviation mechanism. Continue to increase investments in poverty alleviation. For impoverished populations that have not yet achieved basic subsistence, targeted assistance should be provided down to the village and household level. For the severely impoverished who are incapacitated, social relief measures should be implemented with an appropriately raised relief standard. For impoverished populations in areas lacking basic living conditions, proactive and prudent measures such as ecological migration and relocation-based assistance should be adopted. For the low-income impoverished, industries with unique characteristics should be developed to open up channels for increasing income and to prevent relapse into poverty. The mechanism for investments in poverty alleviation should be perfected, financial management strengthened, and the effectiveness of use enhanced to genuinely benefit impoverished households.

Editor's Notes: English versions of reports and other files are for reference only; official Chinese version shall prevail in case of inconsistency. The WFP-China South-South Cooperation Knowledge Sharing Platform shall not be liable for any problems or difficulties that arise from the direct or indirect use, reproduction, or retransmission of the information contained in English versions. 

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