Main Problems and the Line, Principles and Policies of Current Agricultural and Rural Reform and Development
I. Main Problems
(1) The cost of grain is getting higher and higher, the relative price of grain is getting lower and lower, land is seriously shifting away from grain production, and the security crisis of grain and other major agricultural products is becoming increasingly evident;
Both the national agricultural and statistical departments say: China's grain and other major agricultural products have achieved "ten consecutive increases," with total output exceeding 120 billion jin. Per capita possession of staple grain has reached 900 jin, setting a historic high. But at the same time, net imports of grain and related products have been growing at a double-digit rate, reaching 14 billion jin by 2013, also setting a historic high. The self-sufficiency rate for major agricultural products set by the state is 95%, while the actual self-sufficiency rate has already fallen below 90%.
Has China's grain really achieved "ten consecutive increases"? With per capita grain output at 900 jin, would net imports of grain and related products continuously grow at a double-digit rate? India's per capita grain is less than 400 jin, its grain output growth is slower than China's and its population growth is much faster than China's, yet India's grain imports are less than one-tenth of China's, and its import growth rate is far slower than ours.
Could the facts be exactly the opposite, that China's output of grain and other major agricultural products is actually at a relatively low ebb?
It is now elderly agriculture (producing grain), and this is an indisputable fact. Since 1990, China's grain purchase and storage prices have risen only 6-fold, while everything else has risen by N6-fold. Of course, only the left-behind elderly, who have labor but no market price, are engaged in grain production. The question of who will farm the land (grain) in the future also fills General Secretary Xi with deep concern.
Because of the worry that no one will engage in grain production, the government promotes land transfer, using fiscal funds to subsidize so-called leading agricultural enterprises or large-scale operators to transfer land from old farmers at high prices -- engaging in so-called intensive management. The average land transfer price is now 800 yuan/mu per year, while Russia's is only 2 yuan/mu per year, the United States' is below 100 yuan/mu per year, and Japan's is only between 100-150 yuan/mu per year. After China's leading agricultural enterprises or large-scale operators lease old farmers' land at high prices, will they produce grain?
The author has traveled throughout the country and seen countless production bases of leading agricultural enterprises, where scenes of hundreds of mu, thousands of mu of land, or dozens or hundreds of contiguous greenhouses growing weeds instead of crops can be found everywhere. The author visits hundreds of villages every year, where grain output has declined year after year yet what is reported is always consecutive annual increases.
I do not understand: no one believes that leading agricultural enterprises or large-scale operators, after obtaining land, would rather let it lie fallow than produce grain, so why do governments at all levels, citing food security as the reason, promote the concentration of farmland at high prices into the hands of leading agricultural enterprises and large-scale operators? Under the push of erroneous policies, the more the central government subsidizes and invests in agriculture, the more frantically local governments do such incomprehensible things. The final result is: consecutive grain output increases are fake, and continuous growth in net grain imports is inevitable!
(2) Errors in rural reform of the land system, the management system, and the grassroots government system, with grassroots organizations and governments becoming increasingly lax and rural governance becoming increasingly ineffective;
1. As farmers occupy land without paying rent ("if you don't occupy it, you lose out") and "the more you occupy, the more subsidy you get" (agricultural subsidies are determined based on occupied area, and those who occupy land without planting grain still enjoy grain, seed and other subsidies) and other unfair and unreasonable policies become "unchanged for a long time" and codified into law, the unequal and unfair state of land occupation within villages becomes policyized, legalized, and permanent, leading to an ever-increasing phenomenon of violent land occupation, and inducing unrestrained expansion of residential land and private plots, even inducing many people to begin attacking the legitimacy of the Communist Party's revolution and to produce land deeds from 65 years ago to demand "ancestral property." The land system is not only the root of agriculture, but also the root of the rural economy, the root of rural society, the root of rural politics, the root of rural ecology, and the root of rural culture. Fairness -- "land to the tiller," equalization of land rights, and public capture of appreciation -- is the most fundamental principle for constructing and perfecting the rural land system, and this principle has ceased to exist under the discourse of reform. This is the source of the proliferation of chaos in agriculture and rural areas.
2. For a fairly long period, land reform, agricultural industrial policy, and adjustment of rural economic policy have not evolved in the direction of consolidating farmers' village community and its autonomy, but in the completely opposite direction. In particular, while abolishing the agricultural tax, the right of the village collective (community) to collect land contract fees by virtue of its land ownership was also abolished, causing the democratic self-governance system of the village community under the leadership of the Party branch to lose the support of the property rights system and economic foundation and increasingly exist in name only. Party leadership in rural areas has increasingly weakened, and the trend toward mafiaization of rural society has become increasingly obvious, and this trend continues to spread.
3. Since reform, the authority of township governments has been continuously weakened, and they basically have no command authority over the various functional departments (vertical lines) under their jurisdiction. Coupled with the gradual disintegration of rural villagers' village communities, township Party committees and governments can hardly legally or normally and effectively exercise governance authority -- the large number of illegal survival practices we see among township governments is in fact the result of being forced into a corner. The daily work of the vast majority of township governments today generally consists of only the "four big items": compiling data, preventing and blocking farmers' petitions, dealing with family planning inspections, and chasing projects. And the vast majority of township Party committees and governments share one common feature in completing these "four big items," which is "faking." It is extremely rare for township economic data, family planning data, fiscal revenue and expenditure data, and data on the use of central transfer payment project funds not to be fabricated. "Faking" is a "necessity" for grassroots Party committees and governments to cope with superiors or maintain their own existence. The level of "faking" represents the work level of grassroots Party committees and governments. "Faking" is the greatest seeking truth from facts for grassroots Party committees and governments.
(3) The opening of the agricultural industry to the outside world is out of control, endangering national security;
Under the background of globalization, the United States and other countries, relying on their agricultural technological advantages and capital strength and using free trade as a weapon, strive to seize the market share of other countries' agricultural products and contend for pricing power -- pursuing stable market share returns and pricing power returns, that is, implementing the strategy of "weaponizing" agricultural products to exercise "control" over the economic, political, and social security of other countries. This is both an inevitable strategic choice of the third stage of agricultural development in developed countries and an inevitable strategic choice of dominant countries under the background of globalization.
Under the background of globalization, a developing country with a large population like China must ensure the autonomy of its own agricultural industry in order to safeguard its own security. However, after joining the WTO, China opened up agriculture without precaution. Whether in technology or seeds, its autonomy has increasingly weakened; whether in the overseas market share and pricing power of labor-intensive agricultural products, or the domestic market share and pricing power of land-intensive agricultural products, its autonomy has increasingly weakened; whether in the production, purchase and storage, processing, or logistics and retail commerce of agricultural products and related products, foreign capital entry is unobstructed, and quite a few local governments have even handed over the grain purchase and sales system to foreign capital. If such a trend continues, it will inevitably endanger national security.
(4) Agricultural modernization is divorced from farmer urbanization, causing the social risk of modernization transformation to become higher and higher.
In the early period of reform, China's rural registered population was more than 700 million. After more than 30 years of high-speed development through reform and opening up, China's rural registered population increased to more than 900 million. In all the early-developing countries and regions before Asia's "Four Little Dragons," under the modernization background of implementing industrialization and urbanization strategies, when per capita GDP reached 4,500 US dollars, the rural population was basically urbanized -- leaving less than 15% agricultural and rural population. China's industrialization is nearly at its end, per capita GDP has exceeded 7,000 US dollars, and the rural farmer registered population, instead of declining from 700 million at the beginning of reform and opening up, has increased to more than 900 million now. This has no precedent in the modernization process of all early-developing countries and regions in the world. The author's explanation for this phenomenon is: after the gradient transfer of general manufacturing to China, a "China inflection point" appeared -- global general manufacturing reversed from a minority producing for the majority to the majority producing for the minority -- general manufacturing became excessive, and the low wages of Chinese migrant workers cannot support the high cost of their urbanization. China's export-oriented industrialization under the background of reform and opening up -- developing general manufacturing -- has merely created 200-300 million urban floating people, without creating 200-300 million urban citizens and families.
However, China's agricultural modernization path and policy arrangements are based on the "early-developing experience" of more than 85% of the rural population becoming urban citizens. After the emergence of the "China inflection point" in global general manufacturing, this "early-developing experience" has in fact become a fallacy. If agricultural modernization and farmer urbanization are not planned in a coordinated way at the same time -- agricultural modernization wants smallholders' land but not smallholders (people), and industrial modernization and urbanization want migrant workers' labor but not migrant workers (people) -- the social risk of China's modernization transformation may cause China's modernization cause to fail at the final hurdle.
II. On the Choice of Path, Principles and Policies
First, on the path of agricultural and rural development.
If one faces squarely the objective existence of the "China inflection point" in global general manufacturing and its impact, and if one faces squarely the reality that, against the background of more than 30 years of high-speed development through reform and opening up, the rural population has increased by 200 million instead of declining, then one must reconsider the path issue of China's rural and agricultural modernization.
On the path issue of China's rural and agricultural modernization, the essence is the issue of the organizational model of farmers and agriculture, which can be highly summarized as two paths: one is to take the path of agricultural and rural modernization in which the government allies with the new bourgeoisie to eliminate smallholders, and the other is to take the path of agricultural and rural modernization in which the government supports village communities to transform traditional smallholders into organized modern smallholders. The former is the "Philippine path," proven to be a failed path; the latter is the path of Japan, South Korea, and China's Taiwan, proven to be a successful path. At a time when industrialization is nearly at its end, economic growth has slowed down, and there are still more than 900 million rural registered residents, how can the government choose the path of agricultural and rural modernization in which it allies with the new bourgeoisie to eliminate smallholders? Rapidly transforming the rural farmer problem into the urban migrant worker problem is not only more difficult to solve, but also dangerous. Solving the farmer problem in China may take longer than in the early-developing countries and regions before Asia's "Four Little Dragons," and the rural population may have to move back and forth between cities and rural areas for several generations of "free choice" before stabilizing. Therefore, the erroneous practice of supporting leading enterprises to annex smallholders must be stopped and corrected. For a fairly long historical period, the government must take supporting the construction and development of smallholder village communities and relying on them to lead agricultural and rural modernization as the fundamental starting point and focus of guidelines and policies.
Second, on the three basic systems of agriculture, rural areas, and farmers. If for a fairly long historical period it is still necessary to rely on village communities to lead agricultural and rural modernization -- development, construction, and governance -- then it must be confirmed that the village (villagers') community under the leadership of the Party branch is the basic organizational system for farmers, that the "two-tier management system combining unified and separate management" within the village (villagers') community is the basic management system of agriculture and the rural economy, and that the village (villagers') democratic self-governance system is the basic governance system of rural areas. The basic organizational system, the basic management system, and the basic governance system are an integral whole. The "basic management system" of the "two-tier management system combining unified and separate management" has already been written into the Constitution, and the other two basic systems should also be written into the Constitution and adhered to for the long term. As for the three basic systems being a complete system, the author has a special discussion in the book "Tell the Premier the Truth Again," so I will not be verbose here. What needs special mention is that the three basic systems exist on the foundation of collective ownership of rural land by the village community (members); shaking the collective ownership of rural land shakes the foundation of the development, construction, and governance of agriculture, rural areas, and farmers. The central government's emphasis that rural and agricultural reform cannot touch the bottom line of collective land ownership is completely correct, and this bottom line must be upheld unwaveringly. Only when the "three basics" are determined will policy-making not waver and change frequently, will transfer payments have a foothold, will policy implementation have a handle, will agriculture, rural areas, and farmers have subjectivity in development, and can the majority of people share the fruits of reform and development.
Third, on the improvement of the rural land finance system. At present, the mainstream people with discourse power generally believe that only after land (farmland) is privatized can farmland be mortgaged for loans at financial institutions, and only then will farmers' farmland be farmers' true property. This understanding is one-sided, even muddled. Vietnam's land has been privatized for more than 20 years, yet Vietnamese farmers' farmland still cannot be mortgaged for loans at financial institutions. The farmland of Japan, South Korea, and Taiwan also does not achieve mortgage loans in formal financial institutions, but in the internal finance of farmers' communities (township farmers' associations or agricultural cooperatives). The farmland of East Asian smallholders is completely different from the farmland of American large farmers, and they are also completely different farmers. The contiguous farmland of American large farmers can be mortgaged for loans at formal financial institutions, or in other words, American farmland property rights and formal finance are matched. But the farmland of East Asian smallholders cannot become collateral for formal financial institutions. In China, it is not that the land system does not adapt to the financial system, but that the financial system does not adapt to the land system (the author has a special chapter discussing this in the book "Tell the Premier the Truth Again," so I will not repeat it here). The author calls the mutual-aid cooperative finance within farmers' organizations (village communities) "built-in finance," and has conducted a large number of village community "built-in finance" experiments. The experiments prove that as long as mutual-aid cooperative finance is established within the village community, the contracted land and collective membership rights of village community members can be mortgaged for loans in "built-in finance." Under collective ownership of rural land, as long as members' contract rights and share ownership rights are matched by "built-in finance," the liquidity of their land rights and the right to exit membership can be realized. The farmland of East Asian smallholders is different from the farmland of American large farmers and can only realize mortgage loan rights in "built-in finance." In China, it is not that the farmland system does not adapt to the financial system, but that the financial system does not adapt to the farmland system. If this issue is not explained clearly, a minority wanting to carry out privatization will cause the majority to muddle-headedly follow along and make a fuss. In fact, under the conditions of a market economy, collective ownership of land within a village community is not public ownership in the traditional sense; it is people's ownership, and it is also a form of existence of private rights. This kind of community members' "share private ownership (special shareholding system)" needs the support of the community's "built-in finance" to be fully implemented.
Chinese rural areas have maintained smallholder agriculture and smallholder society for thousands of years without being able to upgrade, and the most fundamental reason is ineffective financial supply and ineffective organizational supply. The most fundamental reason for ineffective financial supply is the failure to develop village community "built-in finance." Ineffective organizational supply is also highly correlated with ineffective financial supply. When village community "built-in finance" becomes strong, the effectiveness of the village community (organization) will be greatly improved. China's rural financial reform and improvement of land property rights must be considered in a coordinated way with the choice of the modernization path for agriculture, rural areas, and farmers and the construction of the "three basics." Japan, South Korea, and China's Taiwan, for more than a hundred years, have only permitted rural areas to develop farmers' organizations (farmers' associations or agricultural cooperatives) "built-in finance" and restricted the development of other finance, which is worth learning from. A determination must be made to correct the directional errors of rural financial reform in recent decades, and the central finance must focus on supporting the development of village community "built-in finance." At present, direct fiscal input into rural agriculture is not small and is growing rapidly, and the crowding-out effect cannot be ignored. Fiscal funds should spend more on supporting the development of "built-in finance."
Fourth, break through the ideological obstacles to rural reform and development, and carry out reform according to law. In his later years, Deng Xiaoping positioned the "contract system" as a "transitional" model for solving food and clothing problems, and he emphasized that common prosperity must undergo a "second leap" -- developing the collective economy. Chairman Xi emphasizes that the two thirty-year periods cannot be set against each other, that rural and agricultural reform must uphold the bottom line of collective land ownership, and that the collective economy must be developed and common prosperity realized. This is completely in line with China's reality and the people's aspirations. However, in China's universities and research institutions, in virtual worlds such as online media, in legal circles, in financial circles, and among private entrepreneurs, there is always another reform ideology influencing rural reform and development: if you advocate collective ownership of land, they attack it as "unclear property rights" and label you as anti-reform; if you emphasize the collective economy and "common prosperity," they attack it as "egalitarianism" and label you as "reform regression"; if you advocate rebuilding village communities, they attack it as reviving the "people's communes" and label you as "leftist"; if you emphasize the core role of the Party branch, they attack it as "one-party dictatorship" and label you as opposing democratic self-governance; if you emphasize food security, they attack it as reviving the "planned economy" and label you as "anti-market economy." The reform goal in the hearts of this group is economic privatization and political multi-party system. Although they are not many in number, their discourse power is very great. After their interpretation, any resolution of the central government is completely no longer the central government's resolution. Therefore, reform must be brought into the track of legalization, an ideology of reforming according to law must be established, reform must be carried out according to law, and illegal reform must be prosecuted.