Grain Moderate-Scale Operations Receive Preferential Support Through Three Subsidies
The Ministry of Finance and the Ministry of Agriculture decided that starting from 2015, they would adjust and improve three subsidy policies - the crop improved seed subsidy, the direct subsidy to grain farmers, and the comprehensive agricultural input subsidy (hereinafter referred to as the agricultural “three subsidies”).
To actively and steadily advance this work, the Ministry of Finance and the Ministry of Agriculture proposed guiding opinions including adjusting 20% of the comprehensive agricultural input subsidy funds nationwide to support moderate-scale grain operations, selecting some regions to carry out pilot reform of the agricultural “three subsidies,” and effectively carrying out all work related to adjusting and improving the agricultural “three subsidies” policy.
Since 2004, the state has successively implemented the agricultural “three subsidies” policy, which played a positive role in promoting grain production and increasing farmers' incomes and in advancing agricultural and rural development. However, as profound changes have taken place in the agricultural and rural development situation, the policy effects of the agricultural “three subsidies” have diminished, and the policy effectiveness has gradually decreased, making adjustment and improvement urgently necessary.
Adjusting and improving the agricultural “three subsidies” policy is an urgent need for transforming the agricultural development model and for improving the effectiveness of agricultural subsidy policy. It helps China comply with World Trade Organization rules and further increase support for agriculture and rural areas through “green box policy” measures.
The purpose of this adjustment and improvement is to enhance the targeting, precision, and effectiveness of the policy, improve policy effectiveness, and, on the premise that the state's overall level of support for farmers is not reduced, promote the transformation of the agricultural development model, advance moderate-scale grain operations, promote sustainable agricultural development, and improve agricultural productivity and the market competitiveness of agricultural products. The principles to be followed are: effectively safeguarding the basic interests of the broad masses of farmers; strengthening support for moderate-scale grain operations; effectively promoting sustainable agricultural development; and maintaining the continuity and stability of subsidy policy.
The main content of this adjustment and improvement is divided into two aspects: first, adjusting 20% of the comprehensive agricultural input subsidy funds nationwide to support moderate-scale grain operations; second, selecting some regions to carry out pilot reform of the agricultural “three subsidies.”
In supporting moderate-scale grain operations, in light of falling prices of agricultural production materials, each province, autonomous region, municipality directly under the Central Government, and municipality with independent planning status shall adjust 20% of the funds from the comprehensive agricultural input subsidy allocated and issued by the central finance, plus pilot funds for subsidies to large grain-growing households and incremental funds from the agricultural “three subsidies,” to be used in a coordinated way to support moderate-scale grain operations. The support targets are moderate-scale production and operation entities of major grain crops, with priority given to new types of operating entities such as large grain-growing households, family farms, farmers' cooperatives, and agricultural social service organizations.
Moderate-scale grain operations take many forms, including moderate-scale land operations formed through orderly land transfer, as well as moderate-scale grain operations achieved through share cooperation, joint operations, contract farming, and the provision of social services. Therefore, all localities should adopt active and effective support methods to promote moderate-scale grain operations.
First, focus on supporting the establishment and improvement of the agricultural credit guarantee system. Through agricultural credit guarantees, credit guarantees shall be provided for loans to moderate-scale grain operation entities, striving to solve the problems of “difficult financing” and “expensive financing” faced by new types of operating entities in moderate-scale grain operations. Subsidy funds supporting moderate-scale grain operations shall mainly be used to support all localities, especially major grain-producing provinces, in establishing an agricultural credit guarantee system, promoting the formation of a nationwide agricultural credit guarantee system, gradually building an agricultural credit guarantee network covering major grain-producing areas and major agricultural counties, strengthening the bank-guarantee cooperation mechanism, and supporting moderate-scale grain operations.
Second, loan interest subsidies, direct cash subsidies, and subsidies for major technology promotion and services may also be adopted to support moderate-scale grain operations. Appropriate subsidies may also be given for loan interest of moderate-scale grain operation entities (not exceeding 50% of loan interest). Direct cash subsidies may also be adopted, but they must be linked to the planting area of major grain crops or the area of technology promotion services, and a reasonable upper limit on subsidy scale must be set for individual households to prevent “building up large households.” Methods such as “service first, subsidy later” and the provision of in-kind subsidies may also be adopted to provide subsidies for major technology promotion and services for moderate-scale grain operations.
In carrying out pilot reform of the agricultural “three subsidies,” in 2015, the Ministry of Finance and the Ministry of Agriculture selected 5 provinces, including Anhui, Shandong, Hunan, Sichuan, and Zhejiang, and the provinces selected some counties and cities to carry out pilot reform of the agricultural “three subsidies.” The main content of the pilot is to merge the agricultural “three subsidies” into the “agricultural support and protection subsidy,” with policy objectives adjusted to support farmland fertility protection and moderate-scale grain operations.
Among these, 80% of the existing funds of the comprehensive agricultural input subsidy, plus the direct subsidy to grain farmers and the crop improved seed subsidy funds, shall be used for farmland fertility protection. In 2016, the reform of the agricultural “three subsidies” will be rolled out nationwide on the basis of summarizing pilot experience and further improving policy measures.
Adjusting and improving the agricultural “three subsidies” policy concerns the interests of the broad masses of farmers and the overall situation of agricultural and rural development, as well as the overall situation of national food security and sustainable agricultural development. In terms of specific organization and implementation, the Ministry of Finance and the Ministry of Agriculture require all localities to truly strengthen organizational leadership; carefully formulate specific implementation plans; promptly implement the agricultural “three subsidies” policy; truly strengthen supervision of the allocation and use of agricultural “three subsidies” funds; closely track work progress and developments; and do a good job in policy publicity and explanation.