Guaranteeing grain farmers' income, not letting farmers lose out
General Secretary Xi Jinping stressed at the rural reform symposium that deepening rural reform requires improving the agricultural support and protection system. At present, a number of major pilot programs for deepening rural reform have been rolled out nationwide. A relevant official of the Ministry of Finance stated that to advance rural reform, it is necessary to improve the price formation mechanism and the purchase and storage system for agricultural products, so that grain farmers do not lose out economically and major grain-producing counties do not lose out.
Supporting the pilot reform of target prices for cotton and soybeans, with increased central government subsidies
The Ministry of Finance conscientiously implements the decisions and arrangements of the Party Central Committee and the State Council, and vigorously supports the reform of the price formation mechanism and the purchase and storage system for agricultural products such as corn, soybeans and cotton. "Compared with 2015, in 2016 the central government's total subsidies and subsidy levels for the target prices of cotton and soybeans were both further increased, and fiscal subsidy funds were pre-allocated to pilot provinces in advance, effectively safeguarding farmers' interests and promoting coordinated development along the upstream and downstream of the industrial chain," said a relevant official of the Ministry of Finance.
The target price policy is an agricultural support policy that, on the basis of agricultural product prices being formed by the market, releases price signals to guide market expectations and protects producers' interests through price-difference subsidies. The fiscal subsidy mechanism is that when the market price is lower than the target price, the central government arranges subsidy funds based on the price difference between the target price and the market price, as well as the soybean and cotton output of the pilot provinces (regions) surveyed by the National Bureau of Statistics, and provincial governments are responsible for paying the subsidy funds to growers. Since the implementation of the target price reform pilot, the central government has actively optimized the structure of fiscal expenditure, effectively increased fiscal funding input, fully guaranteed subsidy funds for the target price reform, and guided local governments to continuously improve subsidy methods and simplify operating procedures. Regions such as ** have done a great deal of work in paying out subsidy funds.
The official explained that the reform results are mainly manifested in two aspects. First, prices have reasonably returned to the market, and market supply and sales activities for soybeans and cotton have tended to become more active, especially enhancing the competitiveness of cotton textile enterprises, with cotton inventory sales notably accelerating. Second, the state's fiscal subsidies to growers have further increased, farmers' basic income has been guaranteed, and the stable development of agriculture has been promoted.
Establishing a corn producer subsidy system to ensure that planting income in advantageous production areas remains basically stable
The State Council decided to establish a corn producer subsidy system in the three northeastern provinces and the Inner Mongolia Autonomous Region. This is an important policy measure by the state to guarantee farmers' basic income from grain planting, promote the implementation of agricultural supply-side structural reform, and promote the improvement of the quality and efficiency of agricultural development, against the background of advancing the reform of the price formation mechanism and the purchase and storage system for agricultural products.
"Establishing the corn producer subsidy system means that, on the basis of corn prices being formed by the market, the state maintains a consistent per-mu subsidy level across all provinces and regions, and the subsidy base period also remains unchanged within a certain number of years." A relevant official of the Ministry of Finance stated that this will help give full play to the regulating and guiding role of prices on production, reflect high quality at a high price, promote the adjustment of planting structure, and improve the quality and efficiency of agricultural development.
A major feature of the subsidy system is the implementation of "market pricing, separation of price and subsidy." That is, corn prices are formed by the market, while the central government will provide certain subsidies to the three northeastern provinces and the Inner Mongolia Autonomous Region, and encourage local governments to concentrate subsidy funds in advantageous production areas, ensuring that corn planting income in advantageous production areas remains basically stable.
According to relevant State Council decisions, the central government will allocate a certain amount of subsidy funds to provincial-level finance and grant local governments autonomy, with each province and region formulating specific subsidy implementation plans and determining the subsidy scope, subsidy recipients, subsidy basis, subsidy standards, etc. for its own province or region. Subsidy operations should adhere to openness and transparency. Local governments should make full use of the previous work foundation of direct grain subsidies when allocating subsidy funds, consciously accept supervision from relevant sectors of society, and effectively strengthen organization and implementation to ensure that state fiscal subsidy funds are paid to corn producers. The governments of the three northeastern provinces and the Inner Mongolia Autonomous Region have now initially formulated corn producer subsidy plans for their own provinces and regions.
This year the central government allocated 39.4 billion yuan to reward major grain-producing counties and promote increases in farmers' income
"Agricultural subsidies are an important component of the state's policy to strengthen agriculture, benefit farmers and enrich farmers. How to improve grain production efficiency and increase farmers' income from grain planting is a major factor that policy must consider." A relevant official of the Ministry of Finance introduced that, with the approval of the State Council, last year the Ministry of Finance and the Ministry of Agriculture launched pilot work to adjust and improve the agricultural "three subsidies" policy in 5 provinces: Anhui, Shandong, Hunan, Sichuan and Zhejiang. On the basis of the pilot achieving notable results, this reform has been rolled out nationwide this year.
The main content of the reform is to merge the crop improved seed subsidy, the direct subsidy to grain farmers and the comprehensive agricultural input subsidy into an "agricultural support and protection subsidy," supporting the protection of cultivated land fertility and appropriately scaled grain operations. The subsidy recipients for cultivated land fertility protection are all farming households that hold contracted rights to cultivated land, and farmers receiving subsidies must ensure that cultivated land is not left fallow and that land fertility is not reduced. Subsidy funds used for appropriately scaled grain operations should be tilted toward new types of business entities such as large grain growers, family farms, farmers' cooperatives and specialized agricultural cooperatives, reflecting that whoever grows more grain receives priority support, so that grain farmers do not lose out.
In order to mobilize the enthusiasm of major grain-producing counties for agricultural production, in 2016 the central government allocated 39.4 billion yuan in reward funds for major grain-producing counties, an increase of 2.2 billion yuan over last year. The reward funds are further tilted toward major commercial grain provinces and major grain and oil transfer-out counties, and additional funding arrangements were made for the corn-producing areas of the Huang-Huai-Hai region, encouraging local governments to increase support for new types of business entities, protect enthusiasm for grain planting, and promote the adjustment of planting structures such as corn, so as to better advance the goal of reforming the purchase and storage system for agricultural products.