Ministry of Agriculture report shows absolute income gap between urban and rural residents is still widening

On the morning of December 23, the 12th session of the Standing Committee of the 12th National People's Congress held its second plenary meeting. Entrusted by the State Council, Minister of Agriculture Han Changfu delivered a report on the progress of advancing the construction of a new countryside (hereinafter referred to as the “report”).

Han Changfu admitted in the report that although the construction of a new countryside has made considerable progress in recent years, “agriculture is still the short leg in the ‘synchronization of the four modernizations’ (the synchronized development of new industrialization, informatization, urbanization and agricultural modernization), and the countryside is still the weak link in building a moderately prosperous society in all respects.”

It can be expected that for some time to come, a “tight balance” in the supply and demand of agricultural products will become the new normal, and the absolute value of the urban-rural gap will continue to widen; for decision-makers, deepening agricultural reform is held in high expectations and may help the construction of a new countryside.

“Weak link” and “short leg”

In the report, Han Changbin quoted a speech by the top leader during a recent inspection tour: in November 2014, General Secretary Xi Jinping stressed during an inspection tour in Fujian that in building a moderately prosperous society in all respects, the rural side must not be abandoned, and new steps must be taken in building a new countryside.

The reason the rural side must not be abandoned lies in the complexity of China's current rural and agricultural problems.

On the one hand, there are the many new changes in rural areas since October 2005, when the Fifth Plenary Session of the 16th Central Committee of the Communist Party of China formally proposed advancing the construction of a socialist new countryside.

The report devoted considerable space to comparisons. Data show that in 2014 the national grain output reached 1,214.2 billion jin, exceeding 1,100 billion jin for four consecutive years and achieving a historic “eleven consecutive increases”; and last year, the national per capita net income of farmers reached 8,896 yuan, and farmers' income growth also achieved the first “ten consecutive years of rapid growth” since reform and opening up, with the growth rate exceeding that of urban residents for four consecutive years, and the urban-rural resident income ratio narrowing from 3.33:1 in 2009 to 3.03:1 in 2013.

“In the first three quarters of this year, the per capita cash income of farmers was 8,527 yuan, a real increase of 9.7% year on year, 2.8 percentage points higher than that of urban residents.” Han Changfu said.

On the other hand, despite the good momentum of development, the lag in agricultural development and rural construction is beyond doubt. Han Changfu admitted that agriculture is currently the short leg in the synchronization of the four modernizations, and the countryside is still the weak link in building a moderately prosperous society in all respects.

Taking agricultural production as an example, Han Changfu said that in the future, as the total population and urban population increase, the rigid growth in consumer demand for agricultural products will continue for a long time, and a “tight balance” in the supply and demand of agricultural products will become the new normal.

At the same time, the situation of shrinking land and scarce water will persist, with agriculture facing an annual water shortage of 30 billion cubic meters; agricultural infrastructure is weak and there are many historical debts, the situation of relying on the weather for survival has not fundamentally changed, and low- and medium-yield farmland still accounts for 2/3 of the total cultivated land area.

In addition, the contradiction between rising agricultural production costs and declining comparative benefits has become more prominent.

“The prices of production factors such as land and labor continue to climb, especially the rapid rise in labor costs, squeezing the profit margin of agriculture,” Han Changfu said. “Some farmers say, ‘toiling to farm one mu of land is not as good as going out to work for two days.’”

The inversion of domestic and foreign price differences for agricultural products has become another “new normal” in the rural production sector. A set of data given in the report shows that in September this year alone, domestic prices of rice, corn, soybeans and cotton were respectively 34.2%, 58.1%, 35.9% and 16.9% per ton higher than the after-tax landed prices at major ports.

Looking at this from the perspective of farmers' income, although in recent years the relative ratios of urban and rural residents' income and of farmers' income in the eastern, central and western regions have gradually narrowed, the absolute gap is still widening.

In 2013, the absolute income gap between urban and rural residents reached 18,059 yuan, an increase of 10,821 yuan over 2005; the absolute gap between the per capita net income of farmers in the western region and that in the eastern region reached 5,218 yuan, an increase of 2,603 yuan over 2005; the income gap among farming households is also widening, and the situation in which averages conceal the majority deserves attention.

“The institutional mechanism for integrated urban-rural development is not yet sound, and relatively large gaps still exist between urban and rural areas in residents' income, infrastructure and basic public services.” Han Changfu said.

Confirming rights within five years

Faced with the many problems existing in agricultural and rural development, the decision-makers' approach is to pursue development and reform simultaneously.

“In accordance with the requirements of efficient output, safe products, resource conservation and environmental friendliness, we will continue to increase policy support for strengthening agriculture, benefiting farmers and enriching farmers, effectively transform the mode of agricultural development, and accelerate agricultural modernization, so as to lay a solid industrial foundation for the construction of a new countryside.” Han Changfu said in the report.

It is reported that in the next stage the Ministry of Agriculture will carry out large-scale construction of high-standard farmland, striving to build 800 million mu of concentrated, contiguous, drought- and flood-resistant high-standard farmland by 2020.

At the same time, it will also accelerate the development of agricultural mechanization and greatly raise production efficiency, “striving to basically achieve mechanization of field crops such as grain, cotton, oil and sugar by 2020.”

At the level of rural reform, further releasing the dividends of reform has become the focus of the agricultural department's work in the next stage. According to Han Changfu, some reform measures already piloted in recent years will be gradually promoted nationwide.

Taking the much-watched confirmation of land rights as an example, the report clearly stated that the competent departments will grasp solidly the work of confirming, registering and issuing certificates for rural land contractual management rights, and on the basis of steadily expanding pilot programs, basically complete it in about 5 years.

In addition, the Ministry of Agriculture will also cooperate with the Standing Committee of the National People's Congress to promptly revise the Land Contract Law, granting farmers the power to mortgage and guarantee land management rights, allowing farmers to use management rights as shares to develop industrialized agricultural operations, and ensuring the legality of reform at the legal level.

According to this newspaper's reporter, another key aspect of rural reform, the reform of the rural collective property rights system, will also be deepened.

According to Han Changfu, in the next step the Ministry of Agriculture will carry out “pilot reform for market entry of rural collective operating construction land” and launch pilot reform of the equity rights and powers of rural collective assets.

The report further proposed that decision-making departments will also deepen comprehensive rural reform at an appropriate time and “launch the second batch of rural reform pilot areas and pilot tasks, and advance rural reform pilot experiments” at an appropriate time.

Obviously, for some time to come, the construction of a new countryside will continue to travel on a fast track.