What is the real reason for the poverty of Chinese farmers?
In recent times, I have mainly been traveling around some nationally designated poverty-stricken counties in the southwest region. Having visited some poor places, I found that poverty is not as simple as we imagine: poverty is simply because farmers are low in quality, uneducated, ignorant, and the natural environmental conditions are poor, and so on. We attribute the causes of poverty to the poor themselves, as if poverty had little to do with the government, the system, or mainstream society. That is not so! To a great extent, poverty stems from a lack of rights, and poverty stems from unreasonable systems designed by mainstream society.
Let me start with a story. I went to a township in a certain region. That township had 14,000 people, and had tin mines, lead mines, and coal mines. Every day, the value of the ore hauled out of this township was about 400,000. The mines were opened by “big bosses” from Zhejiang, Sichuan, and Yunnan. They provided the township government with less than 500,000 in taxes each year, but the ore trucks coming and going damaged the road surface, and the funds used for repairs each year were no less than 1.5 million. The mines were opened, the environment was destroyed, the resources were gone, and the mines were toxic. The miners had no labor protection at all. Each miner could only work in the mine for three months and then could not work anymore; over time there was a risk to life. For such labor, each miner's wages were less than 300 yuan/month. If you went to the mine and saw those miners, your first impression would be that these miners were not much different from livestock. People who do not live in such an environment find it very hard to understand the real choice of “rather die of exhaustion than die of hunger.”
The second story: in a poverty-stricken county I visited, the old-growth forests there had been logged since the 1990s. When the trees were cut, there was no compensation at all, because people in mainstream society said the forests belonged to the state, so naturally the logging of forests had nothing to do with local people. Before the forests were logged, local people mainly lived by hunting, supplemented by simple farming, and life was still relatively comfortable. After the trees were cut, local people had to shift from a hunting life to an farming life, and with immense hardship they built terraced fields. In recent years, saying they wanted to protect the environment and prevent soil erosion, the government forced local people to return farmland to forest. The forests were cut, with no compensation; the terraced fields they had opened with such hardship, with one document, were to be compensated with 300 jin of grain per year, given for 5—8 years and that was the end of it. When I was there in person, I felt incomparably ashamed. Many people show boundless kindness and compassion when talking about protecting the environment, yet toward their disadvantaged compatriots they are so unjust!
When I walked into the depths of poverty and faced poverty, I truly had no reason to blame the people struggling in poverty. They were not wrong! After long reflection, I gained a clearer understanding of poverty. There are at least a dozen major unreasonable systems that restrict the rights of the poor and lead to poverty, and they require us to reexamine them: the property rights system.
The two stories above are both related to the property rights system. Mineral resources belong to the state. Who is the state? Whoever has the power to approve mineral resource development represents the state. Some may say, the citizens share in the taxes, right? Who collects taxes on behalf of the state? Of course, it is a matter for a few people. The tax on one ton of coal is 35 yuan—50 yuan, but a truck carrying 10 tons is counted as only 5 tons. By day, 10 truckloads are taxed; by night, 100 truckloads are not taxed. Even if taxes are collected, how can local ordinary people realize their right to share in the benefits of tax revenue?
If forests and mineral resources are said to belong to the state, and the poor cannot share in the benefits, so be it, but even property that originally belonged to the poor, the “state” also wants to possess. For example, roads, bridges, water conservancy facilities, and so on built with funds raised by farmers, their property rights do not belong to the farmers. Since they were built with funds raised by farmers, why do farmers not have property rights income? If farmers were allowed to share in the property rights and income of infrastructure such as electricity, transportation, energy, and communications invested in by farmers, farmers would not be so bitter and so poor.
Not only that, by the late 1980s, the state encouraged farmers to set up grain processing plants. One processing plant required an investment of hundreds of thousands or millions. By the 1990s, with one document from the state, farmers were no longer allowed to operate grain businesses, and farmers suffered heavy losses! The state bore no responsibility at all. In the 1980s, the government encouraged farmers to trade and slaughter pigs. In the 1990s, “designated slaughtering” was required. The whole pig “one-stop” operations run by farmers collapsed, and no one compensated them. In the late 1980s, farmers were allowed to operate seeds, pesticides, and chemical fertilizers. In the 1990s, the supply and marketing cooperatives regained monopoly operation, and this harmed farmers bitterly. The debts farmers incurred because of this could not be repaid in one generation or even two. If an urban enterprise goes bankrupt, it goes bankrupt. If farmers' enterprises are forced into bankruptcy, the money still has to be repaid. How could farmers not be poor!
The fiscal system: rural electricity and telephones were built with funds raised by farmers themselves, while urban electricity and telephones were invested in by the state, and the electricity and telephones used by urban people were cheaper than in the countryside. Rural schools were built with funds raised by farmers themselves, and rural teachers' salaries were paid by farmers themselves. Urban schools were built by the state, and urban teachers' salaries were paid by state finance. Urban roads were built by the state, with one kilometer costing several million or even ten million, while rural roads were mainly built by farmers themselves. Almost all infrastructure construction in rural areas was funded by farmers themselves. Of course the state also provided fiscal support, but that was a drop in the bucket. All are Chinese citizens, yet in terms of access to fiscal resources, the standards are different.
The social security system: China's social security system does not cover farmers. To talk about the social security system is still too luxurious for farmers. This enormous inequality is useless to speak of, so it is just as well not to speak of it. But it must not destroy farmers' own security system, that is, it must not deprive farmers of the right to own land. Those farmers living in poverty-stricken areas, once they lose their land, how will they live? What kind of social security have we provided for these people who have lost their land?
The financial system: urban people can use their ID cards to get bank loans to buy houses, rural people cannot. Urban people can use houses as collateral for loans. Farmers' houses are also houses, so why can't they use their houses and land as collateral for loans? Farmers' wealth is also part of national wealth and also part of the foundation of the renminbi, so why do China's banks not recognize it? If our farmers' mountains, farmers' land, and farmers' houses could also be mortgaged in banks, then rural areas would not lack investment, and farmers would also have money to develop. Now, when farmers borrow money to produce agricultural products for urban people to enjoy, borrowing is still so difficult, and interest rates are several times higher than in the city. Foreign banks do not go to the countryside, and China's banks have also entered the city, while the state does not allow rural private finance to exist. Is rural areas supposed to rely on astronauts to provide financial services!
The tax system: farmers' per capita income is (annually) more than 2,000 yuan, not disposable income, and this income still includes seeds and the grain eaten by themselves and their livestock. The state collects agricultural tax at 8.4 percent of farmers' agricultural output, but if the portion farmers consume themselves and invest in production is excluded, then the tax rate must be more than 20 percent or higher. If the tax rates in the grain processing and circulation links are also included, the tax rate for agriculture may be more than 30 percent. A farmer's annual disposable income is only a few hundred yuan, and taxes must still be paid; urban people have several hundred yuan a month in social security. If urban people lose money in business, they can choose not to do it. If farmers lose money farming, can they choose not to farm? If they do not farm, can they choose not to pay taxes? No, even if they do not farm, they still pay taxes as usual. Agriculture is the weakest industry, and farmers are the most disadvantaged group, yet they face the least favorable tax policies. How could farmers not be poor?
The resource allocation system: let us talk about the resource allocation system for poverty alleviation. The state's poverty alleviation resources are money that belongs to the poor. Who allocates these resources? Cadres allocate them. Whoever runs for the “money” and whoever runs diligently gets it. Running after poverty alleviation resources costs money, and when resources are allocated level by level, each level takes a cut. When these resources reach the project site and the community, how should they be used? The poor still have no voice, and it is still the state cadres who decide. In many poverty-stricken areas, project bidding is conducted. Who presides? Cadres. Who has the right to participate in bidding? A very small number of rich people. Where are the poor? The 99% poor are excluded. If the legal system allocated poverty alleviation resources, it would certainly be more effective than allocation by cadre power. If resources reached the community and ordinary people led the use of resources, a very small amount of money could accomplish very big things, because rural China has a surplus of labor. But in many places, poverty alleviation resources and public resource allocation have become a transactional game of power with power, and power with capital.
The education system, the medical system: these two systems are about the same, so let us only talk about education. People seem to universally recognize: “education changes destiny.” Can education in the central and western regions change the destiny of the people in the central and western regions? I think it cannot; instead, it makes them suffer more and more. In my “Poverty Alleviation Diary,” I wrote about a high school student. To educate him, his parents borrowed debts all around. After graduating from high school, he went to the city to work, with monthly wages of 400 yuan, and it would take him more than ten years of work to repay the debt. He said that as long as he repaid the debt and saved up 2,000 yuan, he planned to return to his small mountain village to get married, and never come to work in the city again. By then he would probably be about 40 years old, and if he did not return to the mountains, urban people would not want him for work either. What is rural education now? Poor parents, carrying debts all around, paying enormous education costs, finally manage to educate a high school student. What return did the high school student give his parents? None! He gave the golden years from 20—40 to the city. What did he get? Nothing! By 40, when he is about to grow old, the city and developed regions do not want him, and the burden of old-age support is thrown back to the central and western regions, thrown back to the poor. Is education a water pump? Education continuously pumps resources from the central and western regions to developed areas, and continuously pumps resources from the poor to the rich! When I was in primary school, a few mao or one yuan paid for a year; in junior high school, two yuan a year; in high school, three or five yuan a year; in university, the state subsidized more than 20 yuan a month and 35 jin of grain coupons. Now what about my child's schooling? Primary school more than 100, middle school more than 1,000, and in the high school entrance examination the admission cutoff score is raised very high, with each point short costing 100 yuan, several hundred yuan, varying. Now when we attend university, the state gives a little money or even none, and more often the school collects money. I calculated that from 1985 to the present, the prices of agricultural products have risen by less than 7 times, equivalent to farmers' income (in price terms) increasing 7 times. But now farmers' education expenditures have risen by hundreds or even thousands of times. Tell me, how could farmers not be poor! The little money farmers can sell things for is sucked completely dry by our education. Farmers have to go into debt to educate their children, and moreover they are educating talent for developed places.