Agricultural subsidy reform during the 13th Five-Year Plan focuses on supporting arable land and grain
China Securities Journal Online News It is understood that in response to current problems such as the obvious inversion of domestic and international prices of some major agricultural products, huge agricultural product inventories, and low returns for farmers from farming, the state will carry out a series of reforms of the subsidy system and the way agricultural-related fiscal funds are invested during the 13th Five-Year Plan period.
China Securities Journal Online News It is understood that in response to current problems such as the obvious inversion of domestic and international prices of some major agricultural products, huge agricultural product inventories, and low returns for farmers from farming, the state will carry out a series of reforms of the subsidy system and the way agricultural-related fiscal funds are invested during the “13th Five-Year Plan” period.
According to a September 17 message from Economic Information Daily, regarding China's agricultural subsidy reform measures for the coming period, a number of experts revealed that the main approach will be to adjust government subsidies that distort production and trade (one type of “amber box” policy), and gradually expand the scale and scope of implementation of “green box” policies. The agricultural subsidy reform pilot recently launched is an important practice. Specifically, it merges the three subsidy policies that form the main body of China's current agricultural subsidies, namely the crop improved seed subsidy, the direct subsidy to grain farmers, and the comprehensive agricultural input subsidy, into an “agricultural support and protection subsidy,” with the policy goal adjusted to supporting arable land fertility protection and appropriately scaled grain operations.
As for the way agricultural-related fiscal funds are invested, the focus is on establishing a mechanism for stable growth of investment in agriculture and rural areas, but agricultural-related transfer payment funds that are “small, scattered, and chaotic” and whose effects are not obvious will be sorted out, agricultural-related special funds with similar goals and similar investment directions will be integrated, and expenditures for which local authorities have management information advantages will be included in general transfer payments and allocated in lump sums.
The agricultural subsidy reform pilot merges the three main agricultural subsidy policies that have already been implemented for 11 years into one. In this regard, an expert told reporters that at present in many places, some farmers can receive subsidies even if they do not grow grain. But large grain-growing households, family farms, farmers' cooperatives, and other new types of business entities that truly engage in grain production find it difficult to obtain subsidy support beyond the arable land they have contracted. After the three subsidy policies are combined, 20% of the existing funds from the comprehensive agricultural input subsidy will be used to support appropriately scaled grain operations, and the other 80%, plus the direct subsidy to farmers and the crop improved seed subsidy funds, will be used for arable land fertility protection. The subsidy recipients will be all farming farmers who hold contracted rights to arable land, which can truly achieve “whoever grows grain benefits.”
Regarding reform of the way agricultural-related fiscal funds are invested, Wang Dehua, associate researcher at the National Academy of Economic Strategy of the Chinese Academy of Social Sciences, said: “Cleaning up, integrating, and standardizing agricultural-related transfer payments is closely linked to the reform of our country's overall fiscal transfer payment system. Our country's special transfer payments are too numerous and too excessive, which has long been criticized by all sectors.” Wang Dehua said that cleaning up and integrating special transfer payments is a key point of our country's fiscal and tax reform. In fact, many problems with special transfer payments are concentrated in agricultural fiscal subsidies, while the main problem with agricultural fund investment is multi-channel investment. “For the grassroots, doing one thing often involves funds from multiple ministries and commissions. The phenomenon of being small, scattered, chaotic, and fragmented is serious.”
Analysts at Qilu Securities said that agricultural informatization is the key to promoting the development of modern agriculture and achieving improved agricultural efficiency. As land transfers accelerate and large growers rise, the prospects for comprehensive agricultural input service platforms and agricultural informatization are clear, and the transformation of modern agriculture is accelerating. Among A-share listed companies, Noposion, Kingenta, Batian, and other listed companies are mainly involved in businesses related to agricultural informatization.
According to a September 17 message from Economic Information Daily, regarding China's agricultural subsidy reform measures for the coming period, a number of experts revealed that the main approach will be to adjust government subsidies that distort production and trade (one type of “amber box” policy), and gradually expand the scale and scope of implementation of “green box” policies. The agricultural subsidy reform pilot recently launched is an important practice. Specifically, it merges the three subsidy policies that form the main body of China's current agricultural subsidies, namely the crop improved seed subsidy, the direct subsidy to grain farmers, and the comprehensive agricultural input subsidy, into an “agricultural support and protection subsidy,” with the policy goal adjusted to supporting arable land fertility protection and appropriately scaled grain operations.
As for the way agricultural-related fiscal funds are invested, the focus is on establishing a mechanism for stable growth of investment in agriculture and rural areas, but agricultural-related transfer payment funds that are “small, scattered, and chaotic” and whose effects are not obvious will be sorted out, agricultural-related special funds with similar goals and similar investment directions will be integrated, and expenditures for which local authorities have management information advantages will be included in general transfer payments and allocated in lump sums.
The agricultural subsidy reform pilot merges the three main agricultural subsidy policies that have already been implemented for 11 years into one. In this regard, an expert told reporters that at present in many places, some farmers can receive subsidies even if they do not grow grain. But large grain-growing households, family farms, farmers' cooperatives, and other new types of business entities that truly engage in grain production find it difficult to obtain subsidy support beyond the arable land they have contracted. After the three subsidy policies are combined, 20% of the existing funds from the comprehensive agricultural input subsidy will be used to support appropriately scaled grain operations, and the other 80%, plus the direct subsidy to farmers and the crop improved seed subsidy funds, will be used for arable land fertility protection. The subsidy recipients will be all farming farmers who hold contracted rights to arable land, which can truly achieve “whoever grows grain benefits.”
Regarding reform of the way agricultural-related fiscal funds are invested, Wang Dehua, associate researcher at the National Academy of Economic Strategy of the Chinese Academy of Social Sciences, said: “Cleaning up, integrating, and standardizing agricultural-related transfer payments is closely linked to the reform of our country's overall fiscal transfer payment system. Our country's special transfer payments are too numerous and too excessive, which has long been criticized by all sectors.” Wang Dehua said that cleaning up and integrating special transfer payments is a key point of our country's fiscal and tax reform. In fact, many problems with special transfer payments are concentrated in agricultural fiscal subsidies, while the main problem with agricultural fund investment is multi-channel investment. “For the grassroots, doing one thing often involves funds from multiple ministries and commissions. The phenomenon of being small, scattered, chaotic, and fragmented is serious.”
Analysts at Qilu Securities said that agricultural informatization is the key to promoting the development of modern agriculture and achieving improved agricultural efficiency. As land transfers accelerate and large growers rise, the prospects for comprehensive agricultural input service platforms and agricultural informatization are clear, and the transformation of modern agriculture is accelerating. Among A-share listed companies, Noposion, Kingenta, Batian, and other listed companies are mainly involved in businesses related to agricultural informatization.