2016 Direct Grain Subsidy to Be Paid Before June 30

The Ministry of Agriculture issued the Notice on Comprehensively Rolling Out the Reform of the Agricultural "Three Subsidies": Starting in 2016, the reform of the agricultural "Three Subsidies" will be comprehensively rolled out nationwide, i.e., the agricultural "Three Subsidies" will be merged into the Agricultural Support and Protection Subsidy, and the policy objectives will be adjusted to supporting the protection of cultivated land fertility and appropriately scaled grain operations.

1. Advantages of the Reform of the Agricultural "Three Subsidies"

First, it helps improve the targeting, precision and effectiveness of the policy;

Second, it helps promote appropriately scaled grain operations;

Third, it helps accelerate the development of rural finance.

The notice proposes that starting in 2016, the reform of the agricultural "Three Subsidies" will be comprehensively rolled out nationwide, i.e., the agricultural "Three Subsidies" will be merged into the Agricultural Support and Protection Subsidy, and the policy objectives will be adjusted to supporting the protection of cultivated land fertility and appropriately scaled grain operations.

2. Main Contents of the Agricultural "Three Subsidies"

Strengthen the protection of cultivated land fertility. For subsidy funds used for the protection of cultivated land fertility, the subsidy recipients are in principle grain-growing farmers who hold contracted rights to cultivated land.

Subsidy basis: This may be the area of cultivated land under the second round of contracting, the area of cultivated land for tax purposes, the area of confirmed cultivated land rights, or the grain planting area, etc. The specific type or types of area to be used shall be determined by the provincial-level people's governments in light of local realities.

Subsidy standard: This shall be determined by local authorities through comprehensive calculation based on the total amount of subsidy funds and the determined subsidy basis. No subsidies shall be given to cultivated land that has already been used as livestock and poultry farms, forest land, contiguous grain fields converted to facility agriculture land, cultivated land requisitioned (occupied) for non-agricultural purposes and other cultivated land whose use has been changed, as well as long-term abandoned land, and cultivated land in the "compensation" area under the balance of occupation and compensation whose quality does not meet farming conditions. Localities are encouraged to innovate methods and approaches, take green ecology as the guide, improve the comprehensive utilization level of crop straw, guide farmers to comprehensively adopt measures such as returning straw to the field, deep loosening and land preparation, reducing the use of chemical fertilizers and pesticides, and applying organic fertilizers, so as to effectively strengthen the protection of agricultural ecological resources and consciously improve cultivated land fertility.

Promote appropriately scaled grain operations. For subsidy funds used for appropriately scaled grain operations, the 2016 scale shall in principle be taken as the base, and funds shall be allocated each year from the Agricultural Support and Protection Subsidy funds; in subsequent years, adjustments shall be made in the same proportion according to the budget arrangements for the Agricultural Support and Protection Subsidy, and support shall be focused on new-type business entities such as large grain-growing households, family farms, farmer cooperatives and agricultural socialized service organizations, reflecting the principle of "whoever grows more grain gets priority support".

Adapt measures to local conditions. All localities should adhere to the principles of adapting measures to local conditions, being simple and easy to implement, and balancing efficiency and fairness, further optimize resource allocation, and improve agricultural production efficiency, land output efficiency and resource utilization efficiency.

Adjust models. Localities are encouraged to innovate support methods for new-type business entities, adopt methods such as loan interest discounts and subsidies for major technology promotion and services to support new-type business entities in developing various forms of appropriately scaled grain operations; direct cash subsidies to new-type business entities are not encouraged.

Subsidy conditions. For loan interest discounts for new-type business entities, subsidies may be given at no more than 50% of the loan interest. For subsidies for major technology promotion and services, methods such as "service first, subsidy later" and the provision of materialized subsidies may be adopted. It is necessary to accelerate the construction of the agricultural socialized service system, and in areas such as trusteeship services for grain production, unified prevention and control of pests and diseases, resource utilization of agricultural waste, and prevention and control of agricultural non-point source pollution, actively adopt methods such as government purchase of services to support qualified operational service organizations in carrying out public-benefit services, and actively explore the conversion of assets formed by fiscal funds into shares quantified to organization members.

3. Specific Requirements for the Agricultural "Three Subsidies"

Strengthen organizational leadership. The reform of the agricultural "Three Subsidies" shall be under the overall responsibility of the provincial-level people's governments, with local finance departments and agriculture departments at all levels responsible for specific organization and implementation. It is necessary to establish and improve working mechanisms, clarify the division of responsibilities, maintain close departmental cooperation, and ensure implementation. It is necessary to promptly formulate implementation plans in light of local realities and be sure to pay out the subsidy funds that need to be delivered to farmers before June 30, so that farmers can have a "reassurance".

Strengthen fund management. Central fiscal Agricultural Support and Protection Subsidy funds shall be allocated to provincial finance departments in blocks based on factors such as cultivated land area, grain output, and the development of appropriately scaled operations, and each province shall determine subsidy recipients, subsidy methods and subsidy standards in light of local realities. Acts of fraudulently obtaining, illegally obtaining, embezzling, misappropriating or diverting Agricultural Support and Protection Subsidy funds, or illegally issuing subsidy funds, shall be seriously handled in accordance with laws and regulations.

Strengthen supervision and assessment. Provincial finance and agriculture departments shall closely track the work of the reform of the agricultural "Three Subsidies", strengthen information communication, and report major issues promptly to the Ministry of Finance and the Ministry of Agriculture.