Four Major Changes to Next Year's Agricultural Subsidies: Broader Scope of Beneficiaries

The Notice on Adjusting and Improving Policies Related to Comprehensive Agricultural Development Supporting the Development of Agricultural Industrialization, issued by the National Comprehensive Agricultural Development Office, explains the changes to agricultural subsidies for 2016. Among them, what changes have been made to the application for agricultural subsidies? What benefits are there for agricultural business entities?

Change One——Large agricultural households can also apply for projects; independent legal person status is no longer required

The new policy stipulates that new types of agricultural business entities such as professional large households, family farms, and socialized service organizations recognized or registered by relevant departments can all be included in the support scope of industrialized operation projects, and are no longer subject to the restriction of independent legal person qualification.

The threshold for applying for agricultural subsidies has been further relaxed. For example, it does not matter if you have not registered with the industry and commerce department; it is enough to be registered with the relevant department. Large agricultural households and family farms can all apply for projects, and the state's support for new types of agricultural business entities will increase more and more.

Change Two——Applicants do not have to be “profitable for two consecutive years”

For farmers' cooperatives and leading enterprises, as long as they have been registered with the industry and commerce department for more than 1 year and have sustainable operating capacity, they can apply for industrialized operation projects. But in the past, many people reported that preparing the materials was really troublesome.

This policy stipulates that the application materials will cancel provisions such as “more than 70% from the enterprise's place of registration, profitable for two consecutive years, asset-liability ratio, bank credit rating, ‘three no-owes’, and net value of fixed assets”. In other words, the application materials are simpler, and agricultural business entities can free up more energy to make projects more refined and solid.

Change Three——For the investment of fiscal funds, farmers can also hold shares

This policy clearly states: part of the fiscal fund investment is encouraged, with farmers, or farmers through cooperatives, holding shares in leading enterprises.

Generally speaking, the state's agricultural industrialization operations adopt organizational forms such as “leading enterprise + farmers” and “leading enterprise + specialized cooperative economic organization + farmers”. Now farmers and enterprises are integrated, but the roles of holding shares and not holding shares are very different. If farmers can hold shares in the invested funds, it means they can enjoy dividends. If the enterprise is run well, farmers can both receive wages and dividends, and the returns will certainly be much better than just working for the enterprise.

Change Four——Encourage all provinces to implement “build first, subsidize later” for funds

The new policy proposes that all provinces may implement “build first, subsidize later”, where after the project is approved, implementation comes first and reimbursement is reported later, and reimbursement is made only after the project is fully completed and passes acceptance inspection by the county-level fiscal department and agricultural development institution.

Agricultural economic organizations do not need to wait for the money before building; after a successful application, project construction can begin immediately, and as long as all kinds of receipts are kept, they will all be reimbursed when the project is settled. However, upfront costs such as project feasibility studies, preliminary design, and environmental assessment cannot be reimbursed.

Agricultural industrialization projects are generally specifically organized, managed, and implemented by the agriculture (agricultural economics) departments of each city and county or relevant provincial-level units, and the agriculture departments of each province (city, district) carry out supervision and inspection.