Grain subsidies should directly benefit grain growers
“Since 2004, the state has successively introduced agricultural subsidy policies benefiting farmers, such as direct grain subsidies. These policies have played a positive role in encouraging farmers to expand grain planting areas and ensuring national food security, but in the process of implementation, some problems and contradictions have gradually emerged. Improving agricultural subsidy policies is an urgent task.” Yang Yucheng, member of the National Committee of the Chinese People's Political Consultative Conference and director of the Agriculture Committee of the Hebei Provincial Committee of the Chinese People's Political Consultative Conference, said, “Although grain prices have risen in recent years, the comparative returns from agriculture are low, and grain prices cannot keep up with the rise in agricultural input prices. Grain growers hope for ‘grain prices a little higher, subsidies a little more, and agricultural inputs a little more stable.’” Many committee members also agreed with his view. “If we still respond to the current ‘three rural issues’ in the traditional agricultural way, there is no way out.” Ke Bingsheng, member of the National Committee of the Chinese People's Political Consultative Conference and president of China Agricultural University, hit the nail on the head.
Make the incentive effect of agricultural subsidy policies more prominent
Yang Yucheng said: “China has initially formed a comprehensive grain subsidy policy system that combines comprehensive income subsidies mainly consisting of direct grain subsidies and comprehensive direct subsidies for agricultural inputs, special production subsidies mainly consisting of improved seed subsidies, agricultural machinery purchase subsidies, and subsidies for raising breeding sows, and price support policies such as minimum grain purchase prices.”
“Due to problems such as low grain subsidy standards, small scale of agricultural machinery purchase subsidy funds, multi-department management, unclear subsidy policy objectives, unclear regulatory responsibilities, and imperfect feedback mechanisms, the incentive effect of agricultural subsidy policies has been seriously affected, and their effectiveness in increasing agricultural production and farmers' incomes has gradually weakened.” Guo Cengcheng, member of the National Committee of the Chinese People's Political Consultative Conference and chairman of the Gansu Provincial Committee of the Revolutionary Committee of the Chinese Kuomintang, called for strengthening the incentive effect of agricultural subsidy policies so that they can truly play their due role.
“All countries subsidize agriculture, and China is no exception.” Ke Bingsheng introduced that since 2003, China has established a policy system of four types of agricultural product subsidies and price support, but as income from working outside the home continues to increase, the role of subsidies in mobilizing farmers' enthusiasm has weakened significantly; at the same time, the prices of China's major agricultural products are comprehensively higher than the prices of imported products. “The direct consequence is a large amount of imports, while domestic products are difficult to sell, and national stocks have increased substantially, reaching the highest level in history. This in turn has led to a substantial increase in national stock subsidies, making them unbearable.” he said.
Grain subsidies should go to those who grow grain
“As long as grain-growing farmers have contracted land, no matter what they plant, how much they plant, or even if they do not plant at all, they can enjoy grain subsidies. This approach will make farmers think that subsidy funds are compensation from the government for farmers' interests and a universal-benefit policy for contracted land.” Tao Xiaxin, member of the National Committee of the Chinese People's Political Consultative Conference and vice chairman of the Heilongjiang Provincial Committee of the Chinese People's Political Consultative Conference, stated clearly, “In one sentence, the direct beneficiaries of grain subsidies should be grain-growing farmers. Those who grow more grain get more subsidies, those who grow less grain get fewer subsidies, and those who do not grow grain get no subsidies, so as to encourage farming households to expand scaled grain operations, promote the rapid development of grain industrialization, and realize the scale benefits of grain production and operation.”
“Change the current practice of ‘subsidizing by land.’ Direct grain subsidies and comprehensive agricultural input subsidies should be linked to planting area as soon as possible to ensure that the policy is consistent with the incentive goal of developing grain production. Through special inspections, regular supervision, and other forms, carry out regular supervision and inspection of the implementation of various policies benefiting farmers, grasp the situation in a timely manner, correct and solve problems promptly when found, and ensure that agricultural subsidies are truly used effectively.” Guo Cengcheng suggested.
“In addition, support for major grain-producing counties should be increased. There should be a certain policy bias in favor of major grain-producing counties, so that major grain-producing counties suffer less or do not suffer losses, and the enthusiasm of all parties for grain production is protected.” Yang Yucheng suggested.
“Separate subsidies from prices”
“At present, there are many problems in China's agricultural subsidy field. The reasons are manifold, but they are not unrelated to the serious lag in agricultural subsidy legislation. So far, China's agricultural subsidies are still in a situation where there are no laws to follow. Agricultural subsidy legislation should be actively carried out, drawing on the practices of developed countries, and a basic law on agricultural subsidies should be formulated to ensure the standardized and effective operation of agricultural subsidy policies and to control and prevent problems in agricultural subsidies at the source.” Yang Yucheng believed.
“In 2014, China began to reform the price subsidy method, piloting a target price system for soybeans and cotton. The government no longer directly purchases, letting prices follow the market, and then subsidizes the price difference to farmers.” Ke Bingsheng believed, “Whether it is the market-supporting purchase that is now the main body of policy, or the target price subsidy that is the direction of reform, both change price relationships through administrative means, making resource allocation unreasonable. Such policies are in fact a replica of the planned economy and cannot achieve rational resource allocation. To improve the price formation mechanism for agricultural products, attention should be paid to giving play to the role of the market in forming prices, and subsidies should be separated from prices.”
Ke Bingsheng said that subsidizing by land area not only has high subsidy efficiency, but can also let market price signals guide farmers to adjust the structure of agricultural product trade more scientifically and rationally. China's land area is scarce, and a reasonable agricultural product trade structure is to import land-intensive products, such as soybeans and rapeseed, and produce other products with high per-mu yields or high added value, such as corn, vegetables, and fruits.
Optimize the structure of agricultural subsidies and enhance the momentum for modern agricultural development
The committee members believed that in the current structure of agricultural subsidies, there are more circulation subsidies and fewer production subsidies. Due to limited financial resources, as price subsidies for agricultural products continue to increase, subsidies for agricultural infrastructure construction and other aspects must be reduced, and these aspects are precisely the key to transforming traditional agriculture and enhancing the momentum for agricultural development.
“Increase the amount of agricultural machinery subsidies, further promote mechanized agricultural production, narrow the scope of subsidized machinery, focus subsidies on technologically advanced, energy-saving and environmentally friendly, safe and reliable medium and large machinery, and at the same time authorize each implementing county and district to determine the list of agricultural machinery within the central and provincial subsidy scope according to local industrial development needs.” Guo Cengcheng suggested.
Ke Bingsheng suggested retaining the agricultural machinery purchase subsidy while merging all other subsidies together to establish a land area subsidy, that is, the subsidy each farming household receives is linked only to the area of contracted land operated, and has nothing to do with the products planted or prices. Such a subsidy policy provides income support to farmers, does not distort the market, conforms to World Trade Organization rules, and is extremely simple and easy to operate.
“Agricultural infrastructure construction focusing on water conservancy should be further strengthened, vigorous support should be given to the transformation of low- and medium-yield farmland, green agriculture, organic agriculture, circular agriculture, and water-saving agriculture should be actively developed, an investment system led by the state should be established, matching funds should be reduced or exempted for poor areas, and the enthusiasm of farmers, collectives, and society to participate in investment and construction of rural infrastructure should be mobilized. A comprehensive agricultural insurance subsidy system should be established.” Yang Yucheng suggested.