Central Document No. 1 Sets Out Seven Areas of Agricultural Reform

The 2015 Central Document No. 1, "Several Opinions on Stepping Up Reform and Innovation and Accelerating Agricultural Modernization," was issued recently. The document states that this year's agriculture and rural work must follow the overall requirements of stabilizing grain production and increasing incomes, improving quality and efficiency, and pursuing innovation-driven development, and must continue to comprehensively deepen rural reform. The document put forward seven reform tasks: accelerating the building of a new type of agricultural operating system, advancing reform of the rural collective property rights system, steadily advancing pilot reform of the rural land system, advancing reform of the rural financial system, deepening reform of water conservancy and forestry, accelerating reform and development of supply and marketing cooperatives and state farms, and innovating and improving rural governance mechanisms.

Experts analyze that the reason Central Document No. 1 makes raising production efficiency the top priority is that problems such as the price gap between domestic and imported goods and subsidy constraints have already become very severe. To achieve the goal of advancing agricultural modernization and complete the seven reform tasks proposed in Document No. 1, the most important work this year will be implementing the ten major plans previously formulated, including the "three plots of land reform."

An authoritative person responsible for drafting Document No. 1 told an Economic Information Daily reporter that in recent years continuous increases in agricultural output, the gradual strengthening of agricultural product market prices, and the gradual raising of minimum purchase prices and temporary storage prices all played a key role, stimulating farmers' enthusiasm for production. However, China's agricultural development has now reached a point this year where it has no choice but to make every effort to improve quality and efficiency and to save costs and reduce consumption, because the contradiction between the "two ceilings" and the "one floor" has become irreconcilable.

The "two ceilings" refer respectively to the fact that the prices of major domestic agricultural products have exceeded import prices, so further price increases have hit a "ceiling," and to the "ceiling" encountered by production subsidies due to WTO rules. It is understood that many of China's current agricultural production subsidies fall within the "amber box" under WTO rules, which is subject to upper limits: according to commitments made upon WTO accession, the aggregate measure of support under the "amber box" must not exceed 8.5% of total agricultural output value, and support for a specific agricultural product must not exceed 8.5% of that product's output value. However, state production subsidy support for major agricultural products such as wheat and corn is now approaching the committed upper limits.

The "one floor" problem refers to the continuously rising cost of agricultural production. Therefore, under the situation where prices are not raised, subsidies are not increased, and costs are rising, the only way to stimulate enthusiasm for production and ensure food supply is to rely on every effort to advance agricultural modernization and deepen reform of the rural system. The above-mentioned authoritative person responsible for drafting Document No. 1 told an Economic Information Daily reporter that, in order to complete the seven reform tasks proposed in Document No. 1, China's main agriculture and rural work in 2015 is to carefully organize and implement a series of reform plans and pilot programs that have already been issued or will soon be issued.

The above-mentioned authoritative person stated that, in addition to the pilot reform for land registration and certification and the pilot reform of the target price system for agricultural products, which have already begun operation, the government has also devoted much effort to formulating ten major reform plans and pilot programs, including reform of rural land expropriation, market entry of collective operational construction land, pilot reform of the homestead system, opinions on steadily advancing reform of the rural collective property rights system, pilot reform to develop farmer shareholding cooperation and empower collective asset shares, guiding opinions on the rural property rights transfer and trading market, reform plans and guiding opinions for state-owned forest farms and forest areas, a pilot plan for water rights registration and certification, reform of supply and marketing cooperatives, and reform of state farms.

"If the focus of agricultural work in 2014 was the central government improving top-level design and making great efforts to issue a series of reform documents in succession, then the first priority of China's agricultural work in 2015 is to put these documents into practice," an official from the Ministry of Agriculture told a reporter. The government has an overall approach to implementing these reform plans, namely, while piloting first, promptly summarizing experience to see whether replicable and promotable reform results can be formed. In other words, regulators still hold a wait-and-see attitude toward how much these series of reforms can promote the development of agricultural modernization, but now they must try first.

Among the ten rural reform plans to be implemented in 2015, the three land system reforms involving rural land expropriation, market entry of operational construction land, and homesteads are the most eye-catching. In addition to the "Opinions on Pilot Work for Reform of Rural Land Expropriation, Market Entry of Collective Operational Construction Land, and the Homestead System" jointly issued by the General Offices of the CPC Central Committee and the State Council, Article 23 of Central Document No. 1 also makes unified arrangements for the reform of these "three plots of land": formulate measures to narrow the scope of land expropriation; grant rural collective operational construction land that complies with planning and use controls the functions of transfer, lease, and equity participation; protect farmers' homestead rights and interests in accordance with the law, reform the method by which farmers obtain residential land, and explore new mechanisms for farmers' housing security. According to Jiang Daming, Minister of Land and Resources, this reform adheres to small-scale piloting, mainly arranged within comprehensive pilot programs for a new type of urbanization and rural reform pilot zones, selecting a number of counties or county-level cities with a foundation and the necessary conditions to carry it out, operating in a closed manner, ensuring controllable risks, and completing the pilot work by the end of 2017.

As for rural property rights reform, in addition to the guiding opinions on the rural property rights transfer and trading market recently issued by the State Council General Office, the opinions on steadily advancing reform of the rural collective property rights system and the pilot plan for developing and empowering farmers with collective asset share rights will also be launched soon. According to Chen Xiaohua, Vice Minister of Agriculture, an important purpose of this reform is to develop farmer shareholding cooperation, and its core task is to grant farmers six rights over collective asset shares, including possession, income, paid exit, mortgage, guarantee, and inheritance, and to solve various problems caused in the past by unclear ownership of collective assets and lax management.

In addition, four other reform plans will also be issued: reform of state-owned forest farms and forest areas, the pilot for water rights registration and certification, reform of supply and marketing cooperatives, and reform of state farms. Among them, reform of the supply and marketing cooperative and state farm systems is written into Central Document No. 1 for the first time in history. The reporter learned that, around these tasks, the central government will also amend and revise a series of laws and regulations to clear theoretical obstacles for reform; for example, with regard to forestry reform, revision of the "Forest Law" and the "Seed Law" has already been placed on the agenda.